Dongfang Cable (603606) Matters Review: Submarine Cable Business with Slightly Better Performance Maintains High Prosperity
Matters: The company issued 厦门夜网 a 2019 performance forecast to achieve net profit attributable to mothers4.
About 5.5 billion, an annual increase of about 165%.
Ping An’s view: The performance exceeded expectations and the profit level in the fourth quarter further improved.
The company announced that net profit attributable to mothers will be about 4 in 2019.
5.5 billion US dollars, a year-on-year growth of about 165%; in 2019, the main business income increased by about 20%, the submarine cable system and offshore engineering industry accounted for more than 40%.
On the whole, the company’s revenue scale is in line with expectations, and net profit attributable to mothers exceeds market expectations.
It is estimated that the scale of revenue in the fourth quarter of 2019 is 1-10 billion, and the net profit attributable to the mother in the single quarter is about 1.
US $ 5.3 billion, the profit level increased further compared with the first three quarters, mainly due to the increase in the proportion of submarine cable and offshore engineering business revenue.
Submarine cable orders are plentiful, and growth in 2020 is guaranteed.
In 2019, the company’s new orders for submarine cables and laying were about US $ 2.3 billion, an increase of about 17% year-on-year. Until the end of 2019, it is estimated that the company’s relevant orders in hand reached more than 2.6 billion points. In 2020, the scale of submarine cable business is expected to grow further.
Taking into account the domestic offshore wind power rush installation factors, it is expected that 2020 will be a big year for submarine cable tendering. Submarine cable supply and demand are expected to further shrink. The company’s production capacity continues to expand and expand, and the submarine cable business will continue to grow steadily in the next two years.
Global offshore wind power is booming, and the mid-to-long-term prospects for submarine cable business are promising.
In recent years, through the rapid progress of technology, the cost of offshore wind power has fallen rapidly. The successful bidding price for the third round of CfD tenders for offshore wind power in the UK has been as low as about zero.
At 36 yuan / kWh, the high prosperity of offshore wind power has spilled from Europe and China to other parts of the world.
Domestically, more than 4GW of offshore wind power projects will be tendered through competitive bidding in 2019, which will provide project reserves after rush installation in 2021; Japan, Taiwan, South Korea, Vietnam and other neighboring countries and regions will accelerate the development of offshore wind power to provide domestic submarine cable companies.Incremental market opportunities, the company’s submarine cable business is expected to get more market opportunities.
Considering that the company’s profit level in 2019 is slightly higher than expected, the company’s profit forecast is raised, and it is expected that net profit will be returned to its mother in 2019-20204.
7.4 billion (original value of 4.
390,000 yuan), corresponding to EPS 0.
88 yuan, dynamic PE 16.
The company’s submarine cable business has outstanding competitiveness and better prospects for future development, maintaining 深圳桑拿网 the company’s “recommended” rating.
1. Offshore wind power is affected by policies. If future policies are adjusted, the increase in installed capacity may be less than expected.
2. The delivery cycle of submarine cable orders is shortened, and fluctuations in raw material prices may affect the profitability of submarine cables.
3. In general, the competition pattern of domestic submarine cables is more complete. In the future, it is not ruled out that the main outstanding performance is the expansion of production or the influx of new entrants, which will cause the competition pattern to deteriorate.