Weak 2Q26 results on slower-than-expected domestic submarine cable deliveries

研报英文原文证据摘录

Not for redistribution without written consent of Morgan Stanley

M

Update

August 5, 2026 04:22 PM GMT

Ningbo Orient Wires & Cables Co Ltd | Asia Pacific

Morgan Stanley Asia Limited+

Eva Hou

Equity Analyst

Weak 2Q26 results on slowerthan-expected domestic

submarine cable deliveries

AlphaSignals Earnings Reaction

Tom Li

Equity Analyst

Ningbo Orient Wires & Cables Co Ltd (603606.SS,

Unchanged

Modest shortfall

Modest revision lower

603606 CG)

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

China Utilities | China

Revenue from submarine and HV cable segment was down 41.4% QoQ to

Stock Rating

Industry View

Price target

Up/downside to price target (%)

Shr price, close (Aug 5, 2026)

52-Week Range

Sh out, dil, curr (mn)

Mkt cap, curr (mn)

EV, curr (mn)

Avg daily trading value (mn)

Rmb874mn in 2Q26, due to slower deliveries.

Fiscal Year Ending

12/25 12/26e 12/27e 12/28e

We estimated submarine cable GPM in 1H26 remained resilient and achieved yoy

EPS (Rmb)**

EPS (Rmb)§

Revenue, net (Rmb mn)

EBITDA (Rmb mn)

ModelWare net inc

(Rmb mn)

P/E

P/BV

RNOA (%)

ROE (%)

Div yld (%)

FCF yld ratio (%)**

1.54

1.80

2.11

2.52

2.19

2.26

2.81

3.36

10,843 12,572 13,886 16,408

1,755

2,118

2,428

2,884

1,271

1,484

1,743

2,078

Source: Company data, Morgan Stanley Research

Key Takeaways

The weak 2Q26 results were mainly due to slower revenue recognition from

submarine cable and FX losses.

expansion, benefiting from better product mix.

As of end-8M26, order backlog stood at Rmb9.1bn for submarine/HV cables and

Rmb3.96bn for marine engineering, vs. Rmb10.4bn/Rmb3.6bn, respectively, at

end-4M26.

The company expects the submarine cable delivery and revenue recognition to

pick up from 3Q26.

Ningbo Orient reported 1H26 net profit of Rmb565mn, up 19.4% yoy. Revenue was

Rmb5.8bn, up 30.8% yoy, among which: 1) Power engineering and equipment

32.3

5.0

28.7

18.5

0.8

2.9

Overweight

Attractive

Rmb52.43

32

Rmb39.79

Rmb61.62-37.32

825

Rmb32,837

Rmb30,129

Rmb734

22.1

3.5

27.3

17.9

1.2

1.8

18.8

3.1

27.6

18.6

1.4

3.6

15.8

2.7

31.0

19.5

1.6

2.7

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

…