ZTT(SH:600522) CMS·2025-08-25 23:30Investment Rating - The report maintains a "Strong Buy" investment rating for the company [2][4]. Core Views - The company is a leading player in the domestic fiber optic communication and submarine cable sectors, with a strong position in sub-segments such as optical communication, renewable energy, and power systems. The transition from a "product supplier" to a "system integration service provider" in the energy sector positions the company as a global leader in energy network system solutions. The submarine cable business is expected to be a new growth driver in the coming years [2]. - The company is projected to achieve net profits of 3.43 billion yuan, 3.96 billion yuan, and 4.48 billion yuan for the years 2025 to 2027, representing growth rates of 21%, 16%, and 13% respectively. The corresponding price-to-earnings (PE) ratios are expected to be 15.8X, 13.7X, and 12.1X [2]. Financial Data and Valuation - The company reported total revenue of 45.065 billion yuan in 2023, with a year-on-year growth of 12%. The projected revenues for 2024, 2025, 2026, and 2027 are 48.055 billion yuan, 55.515 billion yuan, 61.525 billion yuan, and 67.081 billion yuan, respectively, with growth rates of 7%, 16%, 11%, and 9% [3][14]. - The net profit attributable to the parent company is forecasted to be 3.117 billion yuan in 2023, decreasing to 2.838 billion yuan in 2024, and then increasing to 3.426 billion yuan, 3.959 billion yuan, and 4.482 billion yuan in the following years, with corresponding growth rates of -3%, -9%, 21%, 16%, and 13% [3][14]. - The company’s current stock price is 15.85 yuan, with a total market capitalization of 54.1 billion yuan [4]. Business Growth Drivers - The renewable energy market is rapidly growing, contributing to steady performance improvements. In the second quarter of 2025, the company achieved revenue of 13.844 billion yuan, a year-on-year increase of 5.08%. The energy network sector is benefiting from national reforms in renewable energy pricing, leading to a surge in new installations [7]. - There is strong demand for submarine cables overseas, with the global market entering a new growth cycle. The company has secured significant projects and is expanding its global production capacity, including establishing a manufacturing base in Saudi Arabia [7]. - The company is enhancing its competitive edge in offshore engineering by developing advanced marine vessels and strengthening its capabilities across the entire industry chain, which includes construction, installation, and maintenance [7].