QIFAN(SH:605222) ZHONGTAI SECURITIES·2025-05-15 07:45Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected relative performance increase of over 15% in the next 6 to 12 months compared to the benchmark index [4][25]. Core Views - The company's traditional land cable business is expected to show stable growth, while the submarine cable segment is anticipated to contribute to new growth due to technological breakthroughs and production capacity enhancements [5][20]. - The company has a comprehensive product range in land cables, with over 50,000 specifications, and is the largest cable manufacturer in the Shanghai area, which positions it well for market expansion [5][10]. - The submarine cable business is rapidly developing, with the company having completed the R&D of a full series of submarine cables and established production capabilities at its bases in Yichang and Pingtan [11][12]. Summary by Sections Financial Performance - In 2024, the company reported revenue of 22.764 billion, a year-on-year decrease of 2.5%, and a net profit of 136 million, down 68% year-on-year [5][18]. - For Q1 2025, revenue was 4.124 billion, a decline of 14.1% year-on-year, while net profit was 70 million, a decrease of 17.72% year-on-year [5][18]. - The company expects to achieve net profits of 385 million, 450 million, and 521 million for 2025, 2026, and 2027, respectively, with year-on-year growth rates of 184%, 17%, and 16% [5][20]. Business Segments - The land cable segment, which includes power cables and electrical installation cables, accounted for over 97% of total revenue in 2024, with respective revenue contributions of 66.3% and 31.6% [8][10]. - The submarine cable segment is projected to grow significantly, with expected revenues of 1 billion in 2025, 1.3 billion in 2026, and 1.565 billion in 2027, reflecting a strong growth trajectory [18][20]. Market Position and Strategy - The company has established strong partnerships with major state-owned enterprises, securing significant contracts in various sectors, including power grids and renewable energy [10][12]. - The strategic focus on high-end products and expanding into overseas markets is expected to enhance the company's competitive edge and revenue growth [5][10]. Future Outlook - The company anticipates a recovery in profitability due to improved gross margins and a strategic shift in operations, with a focus on higher-margin products [10][20]. - The completion of production facilities in Yichang and Pingtan is expected to enhance the company's capacity to meet growing demand in the offshore wind market, particularly in key regions like Fujian, Guangdong, and Zhejiang [12][15].