Two Opportunities for Construction of Piezoelectric Networks in Cable Industry Are Difficult to Change (1)

While most industries in the electrical industry are warming up, reporters have found a strange phenomenon in the cable companies. Although orders have been increasing, they still feel most of the sadness in the exchanges between reporters and enterprises.

The reason is very clear: For the heavy-duty cable industry, the price of raw materials determines the loss-earnings of each company. Analysts believe that the fundamental reason for the loss of the power cable industry is that raw material prices have risen too fast. Although the State Grid still has many large-scale power grids in 2010, it is difficult to bring a fundamental turn for the over-capacity wire and cable industry.

In the first half of 2010, some power equipment companies experienced rapid growth due to the spring breeze of economic recovery. Their performance was encouraging, but the wire and cable business of the first-class power equipment failed to keep pace with the rapid development of the entire power industry. .

China's wire and cable industry occupies a very important position in the national economy. In recent years, production and sales have continued to grow. Due to overcapacity, raw material prices have skyrocketed, and current business development is mixed. Signs of industry consolidation have already shown signs.

It is understood that due to the rising prices in the international market, the rapid growth in domestic demand, especially the impact of circulation, the supply of raw materials such as copper, aluminum, and high-quality special steel products will have a significant impact on the profitability of power equipment companies, especially for wires. The profit margins of power equipment sub-sectors such as cables and transformers have had a greater impact.

Previously there were comments that the total output value of the top ten wire and cable manufacturers in the country's wire and cable industry accounted for only about 10% of the entire industry. The industry concentration was low, economies of scale were not enough, and the structural contradictions of products were prominent. Domestic wire and cable manufacturers, market competition is also becoming increasingly fierce, raw material prices continue to engulf the profits of manufacturers, only the national nearly 10,000 cable manufacturers competing to share the market share on the major cable plant has formed a lot of pressure, the market was oversupply The situation, and even some small and medium-sized cable manufacturers further reduce the price of products for promotion, but also make some large cable manufacturers in the market to open up. In addition, the user's approval of the cable product price adjustment lags behind, and the poor creditworthiness of the payment also brings huge business pressure to the company.

Under this situation, major cable plants began to control costs from various aspects of business operations, and adopted measures such as simplifying work procedures, reducing internal consumption, standardizing business processes, adjusting product mix, and expanding exports. At the same time, price adjustments for wire and cable products are also imperative.

Taurus Securities Research Department Zou Jianhao believes that the current status quo of the industry is: the main raw material copper prices rose sharply, leading to tight wire and cable companies, capital turnover is slow.

The head of the G-Transformation company believes that the company's current shrinkage in the wire and cable business is beneficial. After all, this is a business with low profitability, but it also takes up a lot of resources, and there are potential risks.

Power Grid Construction Opportunities Difficult to Change Industrial Dilemma Among the series of “trillion” grids in China, the most obvious is the growth of medium- and high-voltage power cables. The construction and renovation of the new round of large power grids and large cities will cause a new round of construction of the city network and will also lead to a new round of cable market competition.

Some industry experts believe that the development of power grid construction will bring certain opportunities for enterprises that are dedicated to the development of cable and wire, and may cause a slight rebound in the performance of the entire industry in the second half of the year.

The large-scale power grid reconstruction in this large city involves a wide range of wire and cable products, ranging from overhead lines of 10 kV, aluminum-core stranded conductors, to high-voltage, superconducting power cables, as well as wires and cables for construction.

As the most important supporting industry in power grid construction, many companies in the wire and cable industry hope to grasp this huge business opportunity and win a certain market share.

Industry experts believe that the opportunities brought about by the reform of the power grid are great, but the relevant companies may not be able to grasp it, mainly because of the development of the industry itself. For example, in the Northwest Development, most of the hydropower stations and pumped-storage power stations will use 500kV cables as the ultra-high-voltage outlets. However, due to the repeated construction and low-price competition in the domestic cable and wire industry, there are still a few companies on the scale. At present, almost no cable manufacturer has the ability to produce this class of products.

Yang Jun, an electric equipment analyst at Union Securities, said that since the end of 2004, the wire and cable industry has been hit hard by the rise in raw material prices, the company needs to advance the development of funds, coupled with fierce competition between the industry, even if the development of the power grid to bring new Opportunities are also difficult to reverse the plight of the entire industry.