ORIENT CABLE (NBO)(SH:603606) Guohai Securities·2024-03-25 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's performance in 2023 met market expectations, with a net profit of 1 billion yuan, representing an 18.78% year-on-year increase. The gross margin for submarine cable business improved to 49.14%, up by 5.87 percentage points year-on-year, driven by the delivery of significant projects [2][3] - The company maintained a high profitability level in submarine cables and a leading market position. The inventory at the end of 2023 is expected to support revenue growth in Q1 2024, with a significant amount of projects pending confirmation [2][4] - The company has a strong order expectation due to the acceleration of offshore wind project approvals in Zhejiang and Guangdong, with a total order volume expected to exceed 15 billion yuan [2][4] Summary by Sections Financial Performance - In 2023, the company achieved a net profit of 1 billion yuan, with a gross margin of 49.14% for submarine cables, reflecting strong profitability [2] - The production volume of submarine cables reached 1,070 km, a year-on-year increase of 113%, while sales volume increased by 23.79% to 853 km [2] Market Position and Orders - As of March 15, 2024, the company had 3.16 billion yuan in hand orders for submarine cables, with an additional 998 million yuan in expected revenue from inventory [2][4] - The domestic approved offshore wind projects have reached 18 GW, with significant demand for submarine cables anticipated, leading to a positive outlook for the company's order book [2][4] Earnings Forecast - The company is expected to achieve net profits of 1.346 billion yuan and 1.688 billion yuan in 2024 and 2025, respectively, with corresponding P/E ratios of 24.05x and 19.17x [3][4] - Revenue is projected to grow at rates of 21% in 2025 and 10% in 2026, indicating a recovery in performance after a period of decline [5][6]