ORIENT CABLE (NBO)(603606) 群益证券·2025-01-20 07:34Investment Rating - The report assigns a "Buy" rating for the company, indicating a potential upside in the stock price [8][12]. Core Insights - The company is expected to benefit significantly from the acceleration of offshore wind power projects in both domestic and European markets, with a strong order backlog and ongoing capacity expansion [8]. - The company has established itself as a leading supplier of cable systems in China, with 70% of its net profit derived from submarine cable business, which is primarily used in offshore wind projects [8]. - The report forecasts net profits for 2024, 2025, and 2026 to reach RMB 12 billion, RMB 19.6 billion, and RMB 24.9 billion respectively, with year-over-year growth rates of 20.3%, 63.3%, and 26.6% [8][11]. Company Overview - The company operates in the electrical equipment industry, with a current stock price of RMB 54.12 as of January 17, 2025, and a market capitalization of RMB 37.22 billion [3]. - Major shareholder is Ningbo Dongfang Group Co., Ltd., holding 31.63% of shares [3]. - The company has a price-to-book ratio of 5.39 and a net asset value per share of RMB 10.05 [3]. Financial Projections - Revenue is projected to grow from RMB 7.01 billion in 2022 to RMB 17.89 billion in 2026, with a significant increase in operating profit and net profit over the same period [11][14]. - The earnings per share (EPS) are expected to rise from RMB 1.225 in 2022 to RMB 3.617 in 2026, reflecting strong growth potential [11][14]. - The company’s price-to-earnings (P/E) ratio is projected to decrease from 44.06 in 2022 to 14.92 in 2026, indicating an attractive valuation as earnings grow [11][14]. Market Position - The company holds a dominant position in the domestic submarine cable market, with a market share of nearly 80% among the top three competitors [8]. - The gross margin for submarine cable products is reported at 40%, highlighting the profitability of this segment [8]. - The company has successfully entered the European supply chain, securing significant contracts in the UK and the Netherlands, totaling approximately RMB 2 billion [8]. Capacity Expansion - The company is actively expanding its production capacity, with new facilities planned in Guangxi Beihai and Guangdong Yangjiang, expected to add significant annual output value [9]. - The investment in Guangxi is approximately RMB 2 billion, aimed at enhancing capabilities for deep-sea transmission equipment [9]. Order Backlog - The company has a robust order backlog, with cumulative orders for submarine cables amounting to approximately RMB 7.3 billion for 2024, representing a threefold increase compared to 2023 [8]. - The anticipated domestic offshore wind installation capacity is expected to double in 2025, further supporting the company's growth trajectory [8].