Ningbo Orient Wires & Cables (603606) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached ¥4.07 billion, up 10.31% year-over-year; net profit attributable to shareholders was ¥644 million, up 4.47% year-over-year.

• Land cable system revenue grew 25.91% to ¥2.29 billion, while submarine cable and marine engineering revenue fell 5.01% to ¥1.77 billion.

• Gross margin for submarine cables was about 40%, marine engineering 33%, and land cables 10%.

• Orders on hand as of August 12, 2024, totaled ¥8.91 billion, with 29% from international markets.

Financial highlights

• Operating cash flow was ¥481 million, up significantly from ¥105 million in H1 2023.

• Basic and diluted EPS were both ¥0.94, up 4.44% year-over-year.

• Net assets attributable to shareholders rose 5.39% to ¥6.63 billion; total assets increased 1.71% to ¥10.82 billion.

• Adjusted net profit (excluding non-recurring items) was ¥548 million, down 9.5% year-over-year due to a decline in high-margin submarine cable sales.

• Non-recurring gains included ¥52.5 million from asset disposals and ¥64.8 million in government grants.

Outlook and guidance

• The company expects continued growth in land cable and international orders, with a focus on high-end and deep-sea cable solutions.

• National policies supporting new infrastructure and renewable energy are expected to drive demand for cables, especially in offshore wind and smart grid projects.

• Risks include raw material price volatility, policy changes, and potential underperformance in offshore wind investment.