Revenue and profit increased steadily, and land cable delivery increased significantly. In the first half of 2024, the company achieved operating income of 4.068 billion yuan, an increase of 10.31% year on year, mainly due to a significant increase in land cable delivery; achieved net profit attributable to shareholders of listed companies of 0.644 billion yuan, an increase of 4.47% year on year; realized net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss of 0.548 billion yuan, a year-on-year decrease of 0.058 billion yuan, a year-on-year decrease of 9.50%. Revenue from submarine cable systems with high added value mainly in the product structure fell 10.34% year on year.

Sea Breeze deliveries declined slightly, and on-hand orders remained sufficient. In 2024, the company achieved a revenue of 1.769 billion yuan for submarine cable systems and offshore engineering (including 1.485 billion yuan for submarine cable systems and 0.284 billion yuan for offshore engineering), a year-on-year decrease of 5.01% and a decrease of 0.093 billion yuan, accounting for 43.54% of the company's main business revenue and 43.48% of the company's revenue. The company successively won bids for land cable systems such as China Southern Power Grid Corporation, Guangxi Guangzhou Investment, State Grid Hubei Electric Power Co., Ltd., Ningbo Railway Yongying Supply Chain, State Grid Zhejiang Electric Power, Shanghai Electric Power Company, State Grid Shaanxi Electric Power Company, etc.; it won about 2.3 billion yuan for submarine cable systems and marine engineering. As of August 12, 2024, the company had orders of 8.905 billion yuan, including 2,949 billion yuan for submarine cable systems, 4.523 billion yuan for land cable systems, and 1.433 billion yuan for marine engineering.

The internationalization strategy is advancing at an accelerated pace, and overseas orders have broken through once again. In July 2024, the company announced that it won about 1.8 billion yuan for InchCape Offshore's submarine cable and 0.15 billion yuan for British SSE's submarine cable; the order amount for Inch Cape reached a new high for the company's overseas orders, achieving another breakthrough in overseas orders. As of August 12, 2024, the company's international orders accounted for nearly 29% of the total number of orders in hand, accounting for a significant increase.

Investment advice: We expect the company to achieve revenue of 8.474/12.661/14.011 billion yuan in 2024-2026, net profit to mother of 1.281/2.409/2.9 billion yuan, EPS of 1.86/3.50/4.22 yuan respectively, and PE of 25.24/13.42/11.15 times, giving it a “recommended” rating.

Risk warning: Project construction progress falls short of expectations, overseas project investment risks, and increased market competition.