Deeply involved in wires and cables, the global leader in flat electromagnetic wires
The company is a professional wire and cable manufacturer. It has been deeply involved in the cable industry for more than 70 years. Currently, the company has two flat electromagnetic wire production bases in Xiangtan and Wuxi, and five wire and cable production bases in Changsha, Hengyang, Wuhan, Chengdu and Nanchang.
The company's main products mainly include wire and cable and flat electromagnetic wire. Among them, flat electromagnetic wire products cover the two major application fields of transformers and motors, “enamel+film, enamel+peek”, and currently have an annual output of about 70,000 tons. In terms of cables, the company is a leading wire and cable enterprise in the central and western regions, and its “Jinbei”, “Flying Crane”, “Tower” and “Ganchang” wire and cable brands are all the number one brands in their province. Currently, the annual sales volume of wiring is about 2.7 million kilometers.
Construction of UHV projects is speeding up, and demand for flat electromagnetic wires for transformers is strong
The company's flat electromagnetic wire products are mainly used in the field of transformers and motors. Flat electromagnetic wires for transformers are mainly concentrated in the high voltage and UHV markets, and the company has a high market share of flat electromagnetic wires for UHV transformers. During the “14th Five-Year Plan” period, the State Grid planned a “24 transit 14 direct” line, and construction progress accelerated markedly starting in 2023. Since the fourth quarter of 2022, the company's orders for flat electromagnetic wires for transformers have increased significantly, and have continued to be booming. Currently, there are plenty of orders.
Production capacity continues to expand, and going overseas opens up room for growth
Currently, the company's theoretical production capacity of flat electromagnetic wire is 95,000 tons, of which the current theoretical production capacity of flat electromagnetic wire for new energy vehicle motors is 20,000 tons. The third phase of the 30,000 ton capacity expansion project for flat electromagnetic wires for new energy vehicle motors has now begun and is scheduled to be put into operation in 2025; production capacity for electromagnetic wires for transformers will also be increased through various methods such as technical reform, new construction and expansion, and mergers and acquisitions.
The company's export and delivery scale of flat electromagnetic wires in 2023 is about 6,000 tons. The products are exported to more than 10 countries including Europe, South America, Southeast Asia, and Japan. The main overseas customers include internationally renowned companies such as ABB (Hitachi Energy), Siemens Energy, GE and Toshiba. Overseas power grid transformation has spawned strong demand for transformers going overseas, which is expected to open up room for the company to grow.
Profit forecasting
We are optimistic that the company's flat transformer and electromagnetic wire business will continue to grow rapidly. We predict that the company's revenue for 2023-2025 will be 152, 174, and 20 billion yuan, respectively, and EPS will be 0.63, 0.74, and 0.86 yuan respectively. The current stock price corresponding to PE is 13.7, 11.7, and 10.0 times, respectively. This is the first coverage, giving it a “buy” investment rating.
Risk warning
The progress of UHV and HV construction falls short of expectations, the expansion of the international market falls short of expectations, the company's production capacity investment falls short of expectations, etc.