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On the evening of August 15, Oriental Cable (603606.SH), a core supplier of China's submarine and land cables, released its 2024 semi-annual report. The company achieved revenue of 4.068 billion yuan in the first half of the year, a year-on-year increase of 10.31%; net profit attributable to shareholders of the parent was 644 million yuan, a year-on-year increase of 4.47%; basic earnings per share was 0.94 yuan, a year-on-year increase of 4.44%.

Oriental Cable, which adheres to the development of its main business, drives development with innovation, deeply explores and releases new quality productivity. Under the guidance of the "dual carbon" strategy, offshore wind power construction is progressing in an orderly manner. With the continuous growth of global demand for submarine cables, Oriental Cable's operating performance has steadily improved, and the leading submarine cable company has once again demonstrated its power.

Seize the opportunities of offshore wind development and achieve steady growth in performance

In the "14th Five-Year Plan" outline, emphasis is placed on optimizing the domestic energy structure, increasing the proportion of new energy, and building smart grids and ultra-long-distance power transmission networks.

The "Action Plan for Accelerating the Construction of a New Electricity System (2024-2027)" jointly issued by the National Development and Reform Commission and other three departments recently proposed nine special actions, including power system stability guarantee action, large-scale and high-proportion new energy transmission action, and distribution network high-quality development action.

At present, my country's "dual carbon" strategy is advancing in an orderly manner, the new energy market has achieved explosive growth, and new infrastructure investment has gradually emerged, which will bring huge market opportunities for products such as new energy equipment cables, energy-saving and environmentally friendly cables, and special cables.

According to data from the National Energy Administration, in the first half of 2024, the country's newly added grid-connected wind power capacity was 25.84 million kilowatts, a year-on-year increase of 12%, of which 830,000 kilowatts were offshore wind power. In addition, favorable policies and continuous approval of offshore wind project bidding in various regions, including Shanghai, Zhejiang, Shandong, Liaoning, Hainan and other places, have all received good news, and the construction of domestic offshore wind power has been promoted in an orderly manner.

Overseas, Europe, the United States, Japan, South Korea and other countries have been simultaneously promoting the construction of offshore wind power projects since the beginning of this year. The GWEC report shows that the global offshore wind power installed capacity is expected to reach 17.8GW in 2024, a year-on-year increase of 63.9%. From 2024 to 2033, the total amount of new offshore wind power installed capacity will reach 422GW, and the share of offshore wind power will increase from 9% in 2023 to 25% in 2033.

Against this background, Oriental Cable actively seized development opportunities and achieved growth in both revenue and net profit. In the first half of 2024, Oriental Cable achieved revenue of 4.068 billion yuan, a year-on-year increase of 10.31%; net profit attributable to the parent company was 644 million yuan, a year-on-year increase of 4.47%. Both revenue and net profit in the first half of the year exceeded half of last year's full-year total.

From 2022 to 2023, the company's operating income was 7.009 billion yuan and 7.310 billion yuan respectively; net profit attributable to the parent company was 842 million yuan and 1.000 billion yuan respectively. It can be seen that in the past two years, Oriental Cable has also maintained a good growth trend.

Outstanding profitability and sufficient orders on hand

After more than 20 years of technological innovation and accumulation, Oriental Cable has become a core supplier of Chinese submarine and land cables integrating R&D, design, production, manufacturing, construction and laying. For many years, it has been in the leading position in the industry in terms of scientific and technological innovation, quality management, and core technology breakthroughs.

To date, Oriental Cable has the system R&D and production capabilities for 500kV and below AC submarine cables and land cables, ±535kV and below DC submarine cables and land cables, and also involves many products such as submarine optoelectronic composite cables, submarine optical cables, optical composite cables for smart grids, and communication cables.

In the first half of 2024, Oriental Cable's submarine cable system and marine engineering business brought the company 1.769 billion yuan in revenue (including 1.485 billion yuan from submarine cable systems and 284 million yuan from marine engineering). In addition, the company's terrestrial cable business data also performed well, bringing the company 2.294 billion yuan in revenue in the first half of the year, an increase of 25.91% over the same period last year.

The establishment of Dongfang Cable's competitive advantage is inseparable from the company's continuous R&D investment and technological innovation. The company has established a regular scientific research cooperation mechanism with well-known scientific research institutes, universities, and leading enterprises at home and abroad. Relying on the collaborative innovation model of industry, academia, research and application, it has achieved a number of key technological breakthroughs, promoted the launch of new products, and has maintained a strong innovation capability.

Based on its comprehensive strength in all aspects, Dongfang Cable has received a steady stream of orders and has also been recognized by customers at home and abroad. Dongfang Cable pointed out in its semi-annual report that from the reporting period to date, the company has successively won bids for land cable systems of about 2.6 billion yuan from China Southern Power Grid, Guangxi Guangtou, State Grid Hubei Electric Power Co., Ltd., Ningbo Rail Yongying Supply Chain, State Grid Zhejiang Electric Power, Shanghai Electric Power Company, State Grid Shaanxi Electric Power Company, etc.; and won bids for submarine cable systems and marine projects of about 2.3 billion yuan.

As of August 12, 2024, Oriental Cable has 8.905 billion yuan in orders on hand, 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. 220 kV and above submarine cables and umbilical cables account for approximately 22% of the total orders on hand, and international orders account for nearly 29% of the total orders on hand.

Faced with the wave of changes in the global energy structure, Oriental Cable has actively seized the opportunity, deeply participated in and led the construction of new power systems. While contributing to the sustainable development of the industry, it has achieved steady growth in its own performance. The future of the submarine cable leader is promising!