Orders on Hand Are Abundant; Orient Cable Invests 2 Billion Yuan to Expand Production | Quick Announcement Reading

Orders on hand are abundant. Orient Cable (603606.SH) is expected to sign an "Investment Agreement" with the Management Committee of Beihai Tieshan Port (Coastal) Industrial Zone, planning to invest 2 billion yuan in three phases to construct a deep-sea power transmission equipment project.

The company announced tonight that the fixed asset investment for the project is approximately 700 million yuan. The project is expected to be constructed in three phases, with the first phase planned to invest 300 million yuan, the second phase 700 million yuan, and the third phase 1 billion yuan. The project is proposed to be located in the Tieshan Port (Coastal) Industrial Zone, covering an area of approximately 210 mu.

Industry insiders stated that in the wind power industry chain, the submarine cable segment, especially high-voltage submarine cable products, has a favorable competitive landscape. A few companies, including Orient Cable, dominate the market, with sufficient orders and high gross margins, which is the confidence behind Orient Cable's significant capacity expansion.

It is reported that after the 2021 rush for installations, offshore wind power experienced a downturn, and Orient Cable's performance in the following two years was below that of 2021. However, since 2024, offshore wind power has progressed rapidly, with several projects such as Guangdong Fanshi, Qingzhou V and VII, and Zhanjiang Xuwen recently initiating tenders. The company has successively won bids for multiple projects, with abundant orders on hand.

On January 1, Orient Cable disclosed that it had confirmed winning bids for two projects, with a total bid amount of approximately 1.275 billion yuan. On November 21, 2024, the company announced that it had won bids for multiple projects, with a total bid amount of approximately 4 billion yuan.

The company previously stated that as of October 18, 2024, its orders on hand amounted to approximately 9.236 billion yuan.

If the above orders are combined, the company's current orders on hand amount to approximately 14.5 billion yuan, which is twice its 2023 revenue.

Capacity side, according to the company's 2024 semi-annual report, it has completed the construction and commenced operation of its future factory in Beilun, Ningbo, consolidating the original medium-voltage industrial base. This has formed an eastern (Beilun) base centered on high-voltage submarine cable, medium-voltage cable, special cable, and high-voltage cable divisions, as well as an offshore engineering base. The company is also building a southern industrial base centered in Yangjiang, Guangdong, and planning a northern industrial layout. In 2022, the company established a wholly-owned European subsidiary in Rotterdam, the Netherlands.