Optical Cables: Professional Cable Manufacturers Entering High-end Special Markets

Special cable product solution provider. The company has been focusing on the research and development of special cable technologies, especially in the fields of ultra-high and ultra-high voltage transmission cables, high-temperature cables for aerospace and high-frequency cables for communications, and has obvious technological advantages. The cable design concept is advanced and the company’s holding The shareholder is Tongguang Group, which holds 74.5% of the company's shares, and Mr. Zhang Qiang directly holds 33.72% of the shares of Tongguang Group and holds 28.41% of the shares of Tongguang Group through Haimen Tongguang Technology Park, which is the issuer’s actual Controller. In the period of 2008-1H2011, the company realized revenue of 291.9993 million yuan, 385,536,800 yuan, 491,018,800 yuan, 248,188,800 yuan, and the average growth rate was 29.68% in 2008-2010; the net profit was 12.46 million yuan, 21.75 million yuan, and 45.96 million yuan. Yuan, 2007.40 million, with an average growth rate of 92.06% in 2008-2010.

OPGW leads high-end products and provides guarantee for continuous growth. From 2008 to 2010, the company’s OPGW market share ranked second in three consecutive years. OPGW products have participated in the construction of 110 major and key projects, including 88 ultra-high voltage projects of more than 500 kV.

The development of aerospace provides a broad future for high-temperature cable products. In 2004, the company independently developed ethylene-tetrafluoroethylene copolymer cable, has applied for patent - high-strength high temperature space wire. The public is currently preparing for third-party AS9100 quality system certification.

Valuation and investment advice. We forecast that the company will realize revenue of 6.45/8.79/1,102 million yuan in 2011-2013, net profit of 0.40/0.79/97 million yuan, and diluted earnings per share of 0.31/0.62/0.76 yuan, respectively, and reasonable stock prices given by relative valuation method. It is 9.6-11.2 yuan, the median value is 10.4 yuan, DCF gives a price of 9.93 yuan, which is within the reasonable valuation range of relative valuation.