Dongwu Securities: Otorga una calificación de sobrepeso a QiuGuan Cable

Dongwu Securities Co., Ltd. Zhu Jiewe, Yi Shenshen, Yu Huiyong, Wu Alan, Chen Zhexiao recently conducted research on Qiuang Electric Cables and released a research report titled “2025 Annual Report Review: Impact of Copper Price Rise + Decline in Winning Bid Prices on 2025 Earnings,” granting Qiuang Electric Cables a “Buy” rating.

Qiuang Electric Cables (920682)

Investment Highlights

Event: The company released its 2025 annual report. In 2025, it achieved operating revenue of 3.81B yuan, up 6.35% year over year, and its production and sales scale reached a new high again; attributable net profit was 96.6225 million yuan, down 27.31% year over year. The pressure on profitability mainly came from the combined effects of three factors: a significant rise in copper prices, a decline in gross margin on winning bids, and a reduction in VAT additional credit offset benefits. On a quarter-by-quarter basis, in Q4 revenue was 130M yuan, up 6.0% quarter over quarter; attributable net profit was 17.7854 million yuan, down 32% quarter over quarter. This was mainly due to higher expense outlays resulting from the Q4 bonus accrual.

Technological innovation has shown remarkable results, with ultra-high-voltage cable R&D progressing steadily: In 2025, R&D expenses were 130 million yuan, up 11.98%; R&D expense ratio was 3.41%; R&D personnel were 112, accounting for 15.86%. Throughout the year, the company obtained 17 national patent authorizations (including 2 invention patents). The number of patent authorizations reached a historical high, and the technological moat continued to deepen. Key breakthroughs were achieved in the ultra-high-voltage layout. The company continued to advance R&D of 500kV polyethylene cables (having passed type tests). It built a 500kV high-voltage cable impulse testing system. The central laboratory passed CNAS accreditation, bringing technical inspection capabilities to a new level. In terms of new product development, it completed R&D for 7 new products, such as AU-standard 33kV aluminum-core cables, new-energy vehicle charging gun cables, and medium-voltage polypropylene cables. Projects such as ultra-high-voltage aluminum-sheathed cables and medium-voltage marine engineering cables achieved phased objectives, and the product portfolio extended toward high-end and specialized applications.

Two-grid winning bids hit a historical high, and market standing keeps improving: 1) The power grid “core base” remains solid, with winning-bid scale breaking the historical peak. In 2025, the company, through centralized tendering platforms of State Grid and Southern Grid, secured winning bids of 2.85B yuan, setting a historical record, and its market standing was further enhanced. For the full year, it completed contract signings (including tax) of over 5.5 billion yuan, up 29%. Sufficient outstanding orders provide a foundation for growth in 2026. 2) Incremental markets bloom across multiple points, with customer structure continuing to optimize. The company successfully entered the list of “qualified suppliers” for large enterprises such as PetroChina and the Zhejiang Provincial Mechanical and Electrical Design Institute, expanding cooperation on engineering projects with China Energy Engineering Group (nuclear power, water conservancy and hydropower, provincial-level engineering companies, etc.), China Communications Construction (CCCC), and others. Solid progress has been made in developing the market for large central (state-owned) enterprises. In the local market, the Zhejiang provincial region achieved recovery-based growth, forming a dual-driven pattern of “deep cultivation of the main market + expansion of incremental markets.” 3) Industry ranking steadily rises, and brand influence is strengthened. The company ranked 26th among the 2025 most competitive enterprises in China’s cable and wire industry. Its comprehensive strengths in dimensions such as technological innovation, product quality, market services, and green development were recognized by the industry.

Earnings Forecast and Investment Rating: Considering the impact of copper price increases, we cut our prior earnings forecasts. We expect attributable net profit for 2026–2028 to be 1.02/1.14/1.30 billion yuan (prior values for 2026–2027 were 1.7/190M yuan), representing year-on-year growth of 5%/12%/14%. The corresponding PE is 28/25/22 times. Considering that the company’s winning bids on State Grid and Southern Grid continue to reach new highs, and that deliveries are expected to grow steadily, we maintain the “Buy” rating.

Risk Warning: Intensifying competition, industry demand falling short of expectations, and fluctuations in copper prices.

The above content has been compiled by Securities Star based on publicly available information and generated by an AI algorithm (Wangxin filing No. 310104345710301240019). It does not constitute an investment recommendation.