After the 2009 decline in the fiber optic cable industry, this year seems to usher in the spring, the industry frequently spread such good information as "selling orders", "full orders", "supply in short supply".
After confirming the relevant manufacturers' confirmation at the end of March, the reporter of “Daily Economic News” learned that the current strong demand for the industry is still going on. Zhongtian Technology is the third-line fiber-optic cable manufacturer with A-shares, and its main business accounted for the most. The benefits are also the biggest.
Fiber optic cable is in short supply
Zhongtian Technology mainly produces cable products, which are divided into communication cable and power cable according to different application fields. According to the 2011 annual report, fiber optic cables used in the communications sector contributed 54% of total revenue, and wires and cables used in the power grid sector contributed 35%.
At present, the company's fiber-optic cable products are in short supply, which is benefited from the improvement of the industry environment. Since March of this year, the fiber optic cable industry, which had entered the trough and oversupply since 2009, has continuously transmitted information such as a rebound in the economy, full orders from manufacturers, and product price increases. "Daily Economic News" reporter had verified the company at the end of last month. Ye Yonglian, the representative of Zhongtian Technology Securities Affairs, said that the company's existing production capacity is tight and the orders are basically saturated. Hengtong Optoelectronics is at full capacity, and the group's chief technology officer said “As long as the fiber is produced, there is no market”; Fenghuo Communication told reporters that the oversupply situation in the industry has improved since the second half of last year.
In addition to the first echelon company, the second and third line manufacturers also reported the same information. According to Tong Ding Optoelectronics, the company's fiber optic cable products are now sold as soon as they are produced.
Basic matching of supply and demand this year
Japan's "3.11" earthquake is one of the reasons for the improvement of the first-line manufacturers of light and optical cables. The earthquake and the subsequent implementation of the power-limiting measures have seriously affected the production operations of the enterprises in the country. The original production materials were heavily dependent on imported fiber optic cables, and the supply was more tight. As a result, the above three listed companies were given priority supply.
This year, the “Broadband China” strategy proposed by telecom operators has entered the period of substantive construction. The “two sessions” have also put forward requirements for the integration of the three networks, which means higher demand for bandwidth, requiring the use of optical signals and greater transmission capacity. The optical fiber with better quality and more convenient capacity is transmitted.
On the supply demand match, Huatai joint researcher Kang Zhiyi said that this year can achieve a balance between supply and demand. He said that in 2011, China's fiber demand is 120 million core kilometers, and it is expected to reach 140 million core kilometers this year. On the supply side, Kang Zhiyi's statistics show that from 2008 to 2011, China's fiber manufacturers' production capacity growth rate in the four years was 25%, 50%, 20%, and 12%, respectively. According to the statistics of the professional committee of China's communication cable and cable, there were 17 fiber-optic enterprises in China last year, with a total capacity of 125 to 140 million core kilometers.
Prefabrication projects help increase gross margin
Xiang Ming Securities researcher Zhou Mingxi told the reporter of "Daily Economic News" that the price is related to the gross profit margin of the manufacturer, which directly affects the profit level; if the price continues to decline, even if the supply and demand are reversed, it will not have much significance for the performance of the listed company. In the communications industry, it is generally believed that a company with a relatively complete industrial chain from preforms to fiber optic cables will be qualified at 60 yuan/core kilometer.
Among the five manufacturers, Hengtong Optoelectronics has the highest gross profit margin of 30%; Zhongtian Technology followed closely with 25%. The high self-sufficiency rate of preforms is a cause. Hengtong Optoelectronics can meet 80% of its production needs, and Zhongtian Technology is about 50%.
Zhongtian Technology publicly issued a total of 1.18 billion yuan in the middle of last year to invest in a 400-ton precast project. It has already built 200 tons and can match the production needs of about 6.6 million core kilometers of fiber. However, the company's current fiber drawing capacity has exceeded 10 million core kilometers per year, and it is completely self-sufficient to wait for the completion of the 400 tons project in 2013.