Hengtong Optic-Electric Won Profit of 767M Yuan in First Half of 2017

Hengtong's year-on-year revenue hit a new high record of up to 11.413 billion yuan. The net profit for attributable shareholders is 767 million yuan, with an increase of 100.67% compared to last year.

September 13, 2017

8 Min Read

SUZHOU, CHINA -- In the evening of August 29th, Jiangsu Hengtong Optic-Electric released a semi annual report -- the first half of 2017. The year-on-year revenue hit a new high record of up to 11.413 billion yuan. The net profit for attributable shareholders of listed company is 767 million yuan, with an increase of 100.67% than last year. The earnings of per share is 0.62 yuan. During the reporting period, Hengtong Optic-Electric doubled the net profit based on the revenue increase of 41.81%.

5G service have promoted the rapid development of optical communications business
During the first half of the year, Hengtong Optic-Electric developed new products and new service revolving 5G business, promoting the rapid development of optical communication service in company. Hengtong Optic-Electric mainly develops new product and service of 5G era, having completed new products' development one by one, like special cable etc., focusing on the development of MPO system for previous connection cable, 5G used FTTA cable; optical devices business have strengthened the development for new products of distributed data center, ODN intelligence, optical devices, specialized network field, focusing on the development of new products such as optical module series (10G/40G/100G), MPO/MPU/AOC, couplers/AWG etc. Some projects have already passed the acceptance.

During the reporting period, company's demand for optical fiber and optical cable exceeds supply, ranking 1st in the tender of China Unicom's optical fiber and cable centralized purchasing, with the centralized purchasing price increased by nearly 20%. The whole industry keeps on growing situation. Company develops special cable actively, among which the field cable was specified as exclusively used by CCTV Hong Kong 20th Anniversary Celebration and the sea floor tunnel connection of Hong Kong, Zhuhai and Macao Bridge's major project; company also won the tender of China National Petroleum Corporation's "2017 Electrical Material (Cable) Centralized Procurement project" as the three consecutive reelected 1st.

Ultra high voltage and special wire business help build new national business card
UHV transmission has been positioned by the State Grid Corporation as building a new national business card of Chinese high-end manufacturing. Currently the "Six AC to five DC" and "Three AC to six DC" are in operation. Company is providing services for all the projects of currently being built "Three AC to six DC", from which the Changji-Guquan±1100kV UHV DC transmission line is of the most high leveled voltage, maximum transmission capacity, longest transmission distance and highest technology level. It showed company's capability of advanced technology of UHV transmission wire industry and ability of providing comprehensive solution, also promoted company's continuous development of UHV business.

Company's special wire assisted Baoji-Lanzhou high-speed railway's full opening; the third generation ultra soft fireproof cable has independent intellectual property rights, which is at the international advanced level its first half year order reaching 100 million yuan; the solution of offshore fan cable and wire is in the leading position within industry, which takes 50% market share of major manufacturers' offshore wind power equipment in China; the new energy 1.8kV locomotive specially used traction cable won the bid of Chinese western part first new energy light rail train project(Qingdao Delingha New Energy LRT Project); the newly developed high-speed railway used 27.5kV exclusively used cable has got railway CRCC certification; high-speed railway tunnel exclusively used branch fireproof cable has passed the test of specialized wind tunnel and obtained the fire safe test certificate, which is now in trial use period, and expected to break the industrial exclusive monopoly.

Rapid development of EPC business
Hengtong Optic-Electric's EPC business was rapidly developing in the first half year, with the EPC communication business entered into the 29 provincial administrative regions, the market size continues growing up.

EPC electric power business newly added photovoltaic power generation, offshore wind power generation design business, cooperating with company's submarine cable manufacturing business to promote the integrated development of ocean engineering services. During the reporting period, Wanshan electric power business revenue increased 118% compared with last year.

The Belt and Road promoted the international development of communication and power grid business
Global infrastructure construction has been launched, which promoted overseas market rapid development of company's optical communications, power transmission. Company has newly invested facilities in Brazil, and has acquired local famous optical communications and power grid enterprises in South Africa, Spain, Portugal and Indonesia.

Layout emerging industries
Company actively integrates resources, layouts new industries, develops the marine engineering and equipment, new energy vehicle electronic control systems, quantum security communications services, big data, smart communities and new energy vehicles charging operations services.

Marine engineering and equipment industry
The company devotes itself to become of the system service operator for full-valued chain of high-end marine equipment research and development, systematic design, equipment manufacturing as well as engineering services, who is one of the most important domestic production enterprises of producing high-pressured photoelectric composite submarine cable with large section. Company's production capacity of submarine cable is ranking first domestically and also ranking front around the world, having capability of manufacturing, delivery and service for undertaking 10000 km leveled relay submarine cable system; submarine cable is of the highest voltage level in the world (500kV) submarine cable technology capacity, which also won the tender of key project of State Grid Corporation's Zhejiang Zhoushan 500kV network power transmission distribution project. Owning the world record of a single 220kV submarine cable length, company has announced that the annual submarine cable's tender projects' contract total amount is 761 million yuan, which is 1.85 times of the marine projects's total revenue in 2016.

Hengtong Marine Equipment Company established during the reporting period and Tongji University jointly developed submarine core products such as main base station, secondary connection box etc., firstly entering into the blue sea market of wisdom ocean. Company develops marine equipment industry revolving on the seven major systems of submarine observation network, submarine optical cable communication, submarine warning network, observation of rivers and lakes, marine pastures, marine oil and gas underwater control, port/dock monitoring etc.

New energy automobile electronic control system
Centred on the new energy automotive industry chain, company focused on the layout of electronic control, charging process, cultivating new energy vehicles electronic control system, aiming at standardization, networking, intelligence and high voltage, accelerating research and development of advanced charging technology, developing new business mode of charging operation; during the reporting period, the company completed the layout of research & development and manufacturing for new energy vehicles' electronic control system and charging operation system. The production line launch of charging pile and charging gun will bring new development space for the company.

Operation platform business
Company's brand "community man" has achieved rapid development, which has accumulative services of more than 2500 thousand in total until now. At the same time, the company devoted itself to develop the intelligent hardware business, striving to become of the industrial leading provider of SD-WAN home smart gateway; company actively develops wisdom real estate business, forming up the wisdom community business mode industrial application that could be copied; after one years cultivation, the wisdom community business successfully launched into operation, achieving a new breakthrough of company.

Big data and network security business
The development of big data industry has risen to national strategy. Combined with the wisdom community business, company will start up the construction of Suzhou bay big data intelligence industry base this year, to build up five big data industrial application platforms of mobile big data's wisdom cloud services, quantum communication information and network security cloud, optical electronics industry's internet cloud, intelligence community's Internet cloud and intelligence charging network cloud. On the base of sustainable development of network safety business, cultivating security situation awareness system, cloud protection platform and big data protection platform, company promoted operator business nationwide based on Shandong's successful operation mode; company established the INSIGHT decision support platform based on DATAMARKET infrastructure platform, develops TALKVIP cloud big data accurate outbound platform, realizing outbound programming purchasing business. Company is the only cooperation partner of China Unicom's innovative outbound mode; having established cooperation relations with operators to provide data services for customers through self-built precision marketing data platform; undertook the cloud computing project of China Mobile, secure cloud service platform and the value's regional fine service; providing network business experience management customized need and user perception statistics need. Company's big data business layout has achieved initial success.

Charging station operation service business
Company closely follows the new energy's developing direction, constructed the Suzhou charging operation network demonstration zone; give full play to company's brand effects, building up Suzhou's biggest charging operation service network; at the same time, company's new energy charging services business operations will be extended to the Yangtze River Delta, Middle China, Hainan province and the southwest areas, realizing the layout over China of the new energy vehicle charging services business. In future, company will be committed to the perfection and development of new energy vehicle charging operations platform service, and develop the new energy vehicle operation service focused on flow and logistics, the charging energy Internet service based on new energy charging and the network shopping business based on new energy vehicles.

Hengtong (HTGD)

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