ZTT(600522) 天风证券·2024-03-10 16:00Investment Rating - The report maintains a "Buy" rating for the company with a target price of 19.71 CNY, reflecting a potential upside from the current price of 14.31 CNY [1][102]. Core Insights - The company is positioned as a leader in the submarine cable industry, capitalizing on opportunities in marine business development, particularly in offshore wind energy, supported by the national "dual carbon" goals [1][11]. - The company achieved significant revenue growth in 2022, with total revenue of 40.27 billion CNY and a net profit of 3.21 billion CNY, marking a substantial year-on-year increase [1][18]. - The offshore wind power sector in China has vast long-term potential, with only 1% penetration of the estimated 3000 GW capacity available along the coastline [1][30]. - The company is actively expanding its international presence, particularly in the European offshore wind market, where it has secured significant contracts [1][73]. Summary by Sections 1. Company Overview - The company has a diversified business model focusing on energy and communication networks, with a strong emphasis on marine business and submarine cables [7][10]. - It has a stable and diverse shareholding structure, with a management team experienced in the telecommunications and energy sectors [14][15]. 2. Financial Performance - In 2022, the company reported a revenue of 40.27 billion CNY, with a net profit of 3.21 billion CNY, reflecting a significant recovery from previous years [1][18]. - The gross margin improved to 18.28% in 2022, with a net margin of 8.48% [19][21]. 3. Market Potential - The offshore wind power market in China is expected to accelerate installation in the 2024-2025 period, driven by favorable policies and ongoing projects [1][42]. - The company is well-positioned to benefit from the growing demand for submarine cables, which are critical for offshore wind energy transmission [1][26]. 4. Competitive Advantages - The company has established high barriers to entry in the submarine cable industry, including technological and geographical advantages [1][76]. - It has a strong brand reputation and a proven track record in major projects, which enhances its competitive position [1][83]. 5. Future Outlook - The company is projected to achieve net profits of 3.6 billion CNY, 4.5 billion CNY, and 5.5 billion CNY for the years 2023 to 2025, respectively [1][102]. - The ongoing expansion into international markets, particularly in Europe, is expected to yield significant growth opportunities [1][72].