New Asia Cable Soars on First Day of Trading Q1 Net Profit Expected to Rise 7.26 to 18.54 YoY

On March 21, the well-known wire and cable enterprise in South China, Xinya Cable, made its debut on the Shenzhen Stock Exchange. The stock, issued at 7.4 yuan per share, opened significantly higher at 37 yuan per share. By around 14:20 on March 21, Xinya Cable was trading at 31 yuan per share, a surge of 318.9%.

(Xinya Cable's performance as of around 14:20 on March 21)

On the evening of March 20, Xinya Cable released a risk warning announcement for its first day of listing: With the approval of the Shenzhen Stock Exchange (Approval No. 222 [2025] of SSE), the initial public offering (IPO) of RMB ordinary shares of Guangdong Xinya Optical Cable Co., Ltd. was listed on the Shenzhen Stock Exchange, with the security abbreviation "Xinya Cable" and the security code "001382". All 62 million RMB ordinary shares offered in this IPO were newly issued, without any public sale of shares by existing shareholders. Starting from March 21, 2025, 60,139,493 RMB ordinary shares will be tradable on the Shenzhen Stock Exchange. The tradable time for the remaining shares will follow relevant laws, administrative regulations, CSRC rules, Shenzhen Stock Exchange business rules, and commitments from related shareholders. The company solemnly reminds investors: Investors should fully understand the risks associated with the stock market and the company, enhance their risk awareness, and avoid blindly following the trend to "chase new stocks" during the early stages of the IPO. They should make prudent decisions and invest rationally.

Xinya Cable also provided an overview of its financial data from the income statement and cash flow statement in the announcement:

In 2024, the company's revenue was 2.8336889 billion yuan, a decrease of 5.94% compared to the previous year, mainly due to a slight decline in the sales volume of wire and cable products. Operating profit was 178.7249 million yuan, down 18.22% from the previous year, primarily for the following reasons: First, there was some fluctuation in the fulfillment period of power grid orders, and more overhead conductors were delivered to power grid customers in 2023, leading to a significant change in the sales volume of wire and cable products in 2024; second, the rapid and substantial increase in the market prices of major raw materials such as copper and aluminum affected the sales volume of products to civilian customers; third, the rise in raw material market prices (SHFE copper increased by 11.59% and SHFE aluminum by 7.33% in 2024) led to a decline in the comprehensive gross margin to 9.90%. As a result, the company's total profit, net profit, net profit attributable to the parent company, and net profit attributable to the parent company after deducting non-recurring gains and losses all decreased compared to the previous year. In 2024, the net cash flow from operating activities was -43.2887 million yuan, up 72.03% YoY, mainly due to the following: First, the amount of non-6+9 bill discounting by the issuer was 69.9314 million yuan, a reduction of 100.5923 million yuan, leading to an increase in cash inflow from operating activities; second, the issuer strengthened customer receivables management and collection efforts, resulting in a decrease of 38.2293 million yuan in accounts receivable, which also contributed to an increase in cash inflow from operating activities.

Xinya Cable also announced its expected performance for the first quarter of 2025:

Based on actual operating conditions and orders on hand, the company's preliminary estimates for the first quarter of 2025 are as follows:

Xinya Cable expects: For the first quarter of 2025, the company is expected to achieve revenue between 580 million yuan and 606 million yuan, representing a YoY change of 1.13% to 5.66%; it is expected to achieve a net profit attributable to the parent company of 31.4 million yuan to 34.7 million yuan, up 7.26% to 18.54% YoY; It is expected to achieve a net profit attributable to the parent company, after deducting non-recurring gains and losses, of 31.05 million yuan to 34.35 million yuan, representing a YoY change of 16.14% to 28.49%.

A research report by Huajin Securities commented that Xinya Cable is a representative enterprise in the power cable sector for the power grid in South China, deeply tied to downstream leading enterprises such as China Southern Power Grid. The company has been focusing on the wire and cable industry in South China for over two decades, establishing a strong leading position in the power grid sector and forming long-term stable cooperative relationships with leading enterprises like China Southern Power Grid. It has gradually accumulated experience in several national key projects, including the "Ningxia-East ±660kV DC Demonstration Transmission Project" and the "Yunnan-Guangdong ±800kV UHV DC Transmission Project." China Southern Power Grid holds a monopoly in Guangdong, Guangxi, Yunnan, Guizhou, and Hainan provinces. Benefiting from the robust economic development in South China, its investment in power grid construction has continuously increased from 67.1 billion yuan in 2012 to 96.6 billion yuan in 2023. Since 2000, the company has established a partnership with China Southern Power Grid. In 2022, among nearly 350 winning cable companies nationwide, the company ranked in the top 5% in terms of winning bid amounts and was the first in South China. Its supply products cover three major categories: power cables, electrical equipment wires and cables, and overhead conductors, making it one of the most comprehensive product series in South China. During the reporting period, revenue from China Southern Power Grid accounted for approximately 40%, firmly placing it as the company's largest customer. Leveraging its cooperation with high-quality clients, the company has consistently been listed among the top 100 most competitive enterprises in the Chinese wire and cable industry, and in 2024, it was once again rated as one of the "Top 100 Most Competitive Enterprises in the Chinese Wire and Cable Industry." 2. The company actively strengthens the R&D and manufacturing of special wire and cable products and expands its product range to new application areas such as automobiles and robots. 1) Compared to traditional cables, special cables can meet complex usage requirements, including wear resistance, heat resistance, cold resistance, tensile strength, bend resistance, flame retardancy, radiation resistance, and electromagnetic compatibility. Guided by market demand, the company has increased its R&D reserves for special cable products. According to the prospectus, the company's ongoing R&D projects include "NS system flame-retardant and fire-resistant series cables," "cold-resistant wires and cables," and "corrosion-resistant high-conductivity steel-core aluminum stranded wire." Additionally, the company plans to implement the "wire and cable intelligent manufacturing fundraising project" to further expand the capacity and variety of low-smoke halogen-free cables, flame-retardant and fire-resistant cables, and mineral-insulated cables, thereby optimizing its product structure. 2) According to the prospectus, in the automotive field, the company intends to develop "electric vehicle charging cables," which are primarily used for connections between charging devices and power sources, as well as between battery packs. In the robotics field, the company's R&D robot cables, in addition to having superior electrical and weather resistance, can withstand prolonged bending and large-angle twisting while maintaining normal operation.

Xinya Cable reminded investors to pay attention to the risk of fluctuations in the prices of major raw materials. Xinya Cable stated: The wire and cable industry is a typical "material-intensive" industry. During the reporting period, raw materials accounted for over 90% of the company's main business costs, primarily including copper and aluminum. Fluctuations in their prices will affect the company's operating performance and working capital arrangements.

》Click to view SMM metal copper spot prices

》Order to view SMM metal spot historical price trends

In 2024, copper prices ended the year with an overall increase, with LME copper rising 2.6% and SHFE copper rising 6.96% for the year, and SMM #1 copper cathode increasing by 6.59% for the year. Although the final copper price increase was not as impressive as that of precious metals, the volatility of copper prices in 2024 was quite dramatic! Driven by macroeconomic tailwinds, growing expectations of tight copper ore supply, rising expectations of production cuts in copper cathode, increased expectations of copper consumption for AI, and COMEX copper squeeze, the futures prices of the three exchanges all hit record highs in May 2024! Taking the volatility of SHFE copper in 2024 as an example, it reached a high of 88,940 yuan/mt and a low of 67,380 yuan/mt, with a difference of 21,560 yuan/mt! Such intense volatility posed significant challenges to the operations of companies along the copper industry chain.

Since entering 2025, copper prices have continued to rise under the influence of mixed macroeconomic and fundamental factors. Previously, concerns about the US imposing additional tariffs on copper, combined with the sentiment that the US was "siphoning" global copper, causing supply tightness in other regions, pushed COMEX copper to a high of $5.1485/oz on March 20, LME copper to a high of $10,046.5/mt on March 20, and SHFE copper to a high of 81,810 yuan/mt on March 21. However, on March 21, due to the rebound of the US dollar and the partial profit-taking, copper prices on the three exchanges experienced a slight correction. For the future trend of copper prices, attention should be paid to changes in the price spread between the New York and London markets. If the spread continues to widen, it may further drive up copper prices; conversely, if the spread narrows, the impact of arbitrage on copper prices will weaken. Future developments in the fundamentals also need to be monitored. Currently, concerns about tight copper ore supply have not eased. Attention should be given to whether the relaxation of export policies for copper concentrates in Indonesia and Panama can alleviate these concerns. After the continuous rise in copper prices, the "fear of heights" sentiment has suppressed resilient downstream consumption. In a situation of weak supply and demand, attention should be paid to whether increased exports and reduced imports can continue to drive destocking in China. If destocking is sustained, it may provide support for copper prices. Additionally, vigilance is needed regarding the potential impact of recurring geopolitical conflicts on market risk appetite and the possible re-emergence of concerns about a "stagflation" in the US economy, which could suppress the market performance of copper prices.

》Click to view SMM aluminum product spot quotes

Furthermore, looking at the historical trend of SMM A00 aluminum spot average prices: The average price on December 19, 2023, was 19,570 yuan/mt, and on December 31, 2024, it was 19,770 yuan/mt, an increase of 1.02% in 2024. On March 21, the average price of SMM A00 aluminum spot was 20,790 yuan/mt, an increase of 1,020 yuan/mt from December 31, 2024, with a year-to-date increase of 5.16%.

We are in the grand context of the Fourth Industrial Revolution, where emerging fields such as smart cities, NEVs, and 5G communications are rapidly evolving. As an indispensable infrastructure, the technological innovation and ecosystem construction of wire and cable are particularly urgent. Under the dual circulation pattern, the Chinese wire and cable industry needs to focus on developing new quality productive forces, set new goals, and shape new advantages to achieve high-quality development.

To strengthen the exchange and cooperation among peers in the wire and cable industry and to address future industry changes, enhance the synergy and mutual understanding within the industry chain, and gain a deeper and more comprehensive understanding of relevant policy directions and market development, SMM will host the 2025 SMM (3rd) Wire and Cable Industry Development Conference and Exhibition from May 22 to 23, 2025! We look forward to joining hands with our colleagues to plan the future development blueprint of the industry!