The company's main business continues to grow.

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, of which power cables are the main ones. Over the past three years, the company's power cable sales have grown at a compound growth rate of more than 47 percent. In the first half of this year, power cable sales totaled 404 million yuan, an increase of 40.24 percent over the same period last year.

The domestic market concentration of the industry is low and the competition is fierce.

Compared with the monopolistic competitive markets in Europe, the United States and Japan, the domestic market is lack of industry leaders. The number of small and medium-sized enterprises is large, and most of them are low-end products, so the homogenization competition is serious. The number of large enterprises accounts for only 0.31%, and their income accounts for less than 10%.

The company's fundraising project is worth paying attention to.

The company's development strategy is clear, focusing on ultra-high-pressure projects to get rid of the plight of vicious competition in low-end products. The fund-raising company will fully invest in 500kV environment-friendly flame retardant ultra-high voltage cross-linked cable and 500kV resource-saving aluminum alloy overhead line project. After the project reaches production, it is estimated that the annual increase in operating income will be 847.68 million yuan and the total profit will be 136.34 million yuan.

Profit forecast

We estimate that the company's EPS in 2010 and 2011 will be 0.47 yuan and 0.58 yuan respectively, and we will give 23-25 times PE in 2010, with a reasonable IPO valuation range of 10.81-11.75 yuan.

Risk hint

The company is mainly faced with the risk of intensified competition and fluctuation of raw material prices.