Zhongchao Cable (002471) is a joint stock limited company set up by Jiangsu Zhongchao Group Holdings. The company specializes in the research and development, production, sales and service of wires and cables. At present, the company's main products are 35kV and below wires and cables, including power cables, electrical spare wires and cables and bare wires, involving more than 500 models and more than 10000 specifications.
The company belongs to the wire and cable manufacturing industry, thanks to the rapid development of China's economy, the wire and cable industry has generally maintained a good growth momentum. The sales income of the whole wire and cable industry reached 256.466 billion yuan in 2005, 386.592 billion yuan in 2006, 457.503 billion yuan from January to November 2007, 552.192 billion yuan from January to November 2008, and 574.752 billion yuan from January to November 2009. Power cable production increased from 4.66 million km at the end of 2004 to 21.38 million km in 2009, an increase of 35.6% over the same period last year.
Relying on the competitive strategy of "value marketing", facing the market positioning of high-end customers such as power systems, large enterprises and key projects, and the product positioning of "high-quality cable suppliers", the company has a foothold in the market and develops rapidly. The market share in 2006, 2007, 2008 and 2009 was 0.27%, 0.32%, 0.32% and 0.32% respectively.
The 500kV environment-friendly flame retardant ultra-high voltage cross-linked cables and 500kV resource-saving aluminum alloy overhead lines to be invested are projects with high added value. It is expected that during the whole production period of the project, the average annual sales income will be increased by 847.6818 million yuan (including tax), the average annual net profit will be increased by 102.2549 million yuan, and the profitability of the company's main business will be greatly improved.
According to the average situation of companies in the industry, we think that we can give P/E30 times valuation in 2010 and 25 times in 11 years, and the reasonable price after listing is 17.1-18.50 yuan. The recent listing of small and medium-sized board cable companies have a good performance after the debut, we suggest that investors actively participate in the purchase.