Summary of Ningbo Orient Wires & Cables Conference Call Company Overview - **Company**: Ningbo Orient Wires & Cables Co Ltd (603606.SS) - **Industry**: China Utilities - **Market Cap**: Rmb45,527 million - **Current Stock Price**: Rmb66.20 (as of October 24, 2025) - **Price Target**: Rmb69.63, indicating a 5% upside potential Key Financial Highlights - **9M25 Net Profit**: Rmb914 million, down 1.9% YoY - **9M25 Revenue**: Rmb7.5 billion, up 11.9% YoY - **3Q25 Net Profit**: Rmb441 million, up 53.1% YoY and 129.6% QoQ - **Gross Profit Margin (GPM)**: - 3Q25: 22.6%, up 0.9 percentage points YoY and 6.3 percentage points QoQ - Estimated GPM for submarine and high-voltage cables: 34-35% vs. 25% in 1H25 - **Order Backlog**: Rmb19.6 billion as of October 23, 2025, including: - Rmb11.7 billion in submarine and high-voltage cables - Rmb3.9 billion in marine engineering - Rmb3.9 billion in medium- and low-voltage land cables Revenue Breakdown - **Submarine and High-Voltage Cables**: - Revenue: Rmb1,592 million in 3Q25, up 109.4% QoQ - Key projects contributing to revenue: Qingzhou 5 and 7, Fanshi 1 and 2 in Guangdong - **Marine Equipment and Engineering**: Revenue decreased to Rmb78 million, down 63.2% QoQ - **Medium/Low Voltage Land Cables**: Revenue: Rmb1,343 million, up 0.5% QoQ with ~10% GPM Strategic Insights - The significant increase in net profit for 3Q25 is attributed to accelerated revenue recognition from high-margin offshore projects in Guangdong - The company has achieved 86% of the full-year earnings forecast for FY25, indicating potential upside risk to the forecast Valuation and Risks - **Valuation Methodology**: Discounted cash flow analysis with a WACC of 7.4% - **Risks to Upside**: - Increased offshore wind power installations in China - Higher average selling prices (ASPs) for submarine cables - Improved gross profit margins for both submarine and land cables - **Risks to Downside**: - Decrease in offshore wind power installations - Decline in ASPs for submarine cables - Unexpected increases in raw material costs Analyst Ratings - **Stock Rating**: Overweight - **Industry View**: Attractive Conclusion Ningbo Orient Wires & Cables has demonstrated strong financial performance in 3Q25, driven by key offshore projects and a substantial order backlog. The company is well-positioned for future growth, although it faces potential risks related to market conditions and raw material costs. The current stock rating reflects a positive outlook for the company within the utilities sector in China.

Summary of Earnings Preview for China Utilities Sector Industry Overview - The report focuses on the **China Utilities** sector, specifically highlighting the **Power, Renewables, and Power Grid** industries in the Asia Pacific region - The overall industry view is considered **Attractive** [4][6] Key Insights - **3Q25 Earnings Expectations**: - Continued margin recovery is anticipated for wind component and submarine cable players - Polysilicon earnings may see upside risks - Solar module producers are expected to maintain flat or show mild decline in losses quarter-over-quarter (QoQ) [1][6] - **Coal Prices and Power Tariffs**: - A slight weakening in unit profit is expected due to a small rise in coal prices and a persistently soft power tariff [6][8] - **Sector Performance**: - Wind sector is expected to see a sector-wide gross profit (GP) margin recovery, primarily driven by submarine cables with a favorable product mix in 3Q25 - Wind Turbine Generator (WTG) Original Equipment Manufacturers (OEMs) may experience a more muted recovery [6][8] Company-Specific Highlights - **CGN Power Co., Ltd (1816.HK)**: - On-grid power generation decreased by 3% year-over-year (YoY) in 3Q25 due to longer outage times - Estimated net profit of approximately **Rmb2.6 billion**, down 6% YoY [8][10] - **China Longyuan Power Group (0916.HK)**: - Forecasted net profit of **Rmb937 million** in 3Q25, down from **Rmb1,542 million** in 2Q25 - Net profit for 9M25 expected to be **Rmb4.5 billion**, down 22% YoY [8][10] - **Huaneng Power International Inc. (0902.HK)**: - Estimated net profit of **Rmb4.1 billion**, up approximately 38% YoY but down 5% QoQ - Unit fuel cost expected to decline by **Rmb0.036/kWh** (12% YoY) [8][10] - **Jiangsu Zhongtian Technology Co. Ltd. (600522.SS)**: - Forecasted net profit of **Rmb1.03 billion** for 3Q25, up 21.1% YoY and 9.6% QoQ [8][10] - **Goldwind (2208.HK)**: - Expected net profit of **Rmb953 million**, representing a 135.1% YoY increase [10][10] - **Tongwei Co. Ltd. (600438.SS)**: - Forecasted net loss of **Rmb2.2-2.4 billion** in 3Q25, with improvements in polysilicon business due to price rebounds [10][10] - **LONGi Green Energy Technology Co. Ltd. (601012.SS)**: - Expected loss of **Rmb1.0-1.3 billion** in 3Q25, with slight declines in wafer and module shipments [10][10] Additional Observations - **Polysilicon Players**: Potential earnings surprises are anticipated due to increases in shipments and average selling prices (ASP) in 3Q25 [6][8] - **Demand Outlook**: Weaker demand is expected in 4Q25 compared to 3Q25, particularly for solar products [6][8] This summary encapsulates the key points from the earnings preview for the China Utilities sector, highlighting both the overall industry outlook and specific company forecasts.