Fiber optic cable revenue soared in the first half of the year overseas expansion is a long-term plan

The demand for optical fiber and cable is in short supply, showing that the three major manufacturers of optical fiber and cable have collectively increased their revenue in the first half of this year. FiberHome Communications' optical fiber and cable product business revenue was RMB 116 million, an increase of 26% over the previous year, with a profit margin of 17.83%. Hengtong Optoelectronics' optical communication product operating revenue was RMB 1.496 billion, an increase of 34.53% year-on-year and a profit margin of 35.16%; Days of science and technology optical communications products revenue 1.479 billion yuan, an increase of 25.04%, profit margin of 24.64%. In fact, the market has only just begun. Up to now, only China Telecom has launched the 2012 fiber-optic clustering and the scale of 24 million core kilometers. However, even if only China Telecom’s demand stimulates, the optical fiber market has already been in short supply.

First, the demand for optical fiber has increased. According to statistics, the domestic demand for optical fiber for this year is about 150 million core kilometers. However, the domestic optical fiber capacity is estimated to be about 130 million core kilometers, and the production capacity is constrained by raw materials such as rare gases. Raw materials such as helium are constrained by the domestic market. Since the end of last year, international gas suppliers have started to restrict supply to domestic manufacturers, and optical fiber production capacity has been tense. .

Due to the tight supply and demand of optical fiber, the price of optical fiber picked up. First of all, China Telecom's price for this collection rose slightly. At the same time, the price of optical fiber has risen sharply for some Optical Cable companies that need to purchase optical fibers. This will, to some extent, promote the rise of optical fiber profits.

Taking into account that the second half of China Mobile, China Unicom to start Fiber Optic Cable assembly, will inevitably further aggravate the situation of tight supply and demand, optical fiber profits still have room for growth.

However, it should be noted that several major manufacturers predicted this situation in early 2011, and the same period last year showed that all three companies had fund-raising to expand the capacity of the optical fiber product line. Therefore, although the mainstream securities analyst agencies are optimistic about the optical fiber market. However, some experts pointed out that the stimulation of the broadband strategy has caused the three major operators, and even the national grid, radio and television to accelerate the deployment of optical fiber, but the market will be saturated within a few years. While the capacity expansion of several major manufacturers may gradually show a situation of overcapacity in the next few years, the best way is to develop new market space in time to release production pressure. The international market is a good choice.

International market: big but difficult to be a key market, the international market has always been the focus and potential market for fiber optic cable manufacturers. It is not difficult to see from the financial statements in the first half of the year that the domestic fiber optic cable manufacturers have achieved certain achievements in international market development in recent years. The FiberHome financial report shows that in the first half of 2012, the overseas business revenue of Fiberhome was 314 million yuan, an increase of 39.09% year-on-year; Optoelectronics achieved overseas business revenue growth of nearly 150% for the entire year of 2011. Affected by the international economic downturn in the first half of this year, overseas market revenue was RMB 66 million, which was an increase of 2%. However, Hengtong has been accelerating its overseas market layout in recent years. Zhongtian Technology's overseas business income was 310 million, an increase of 76.03% over the same period last year.

In fact, domestic optical communications companies have gained a lot in foreign countries. One of the total generations of African manufacturers told reporters that overseas markets can largely release domestic competitive pressures: domestic competition is too focused on prices, while foreign countries are more focused on overall programs, and profits are guaranteed. She gave an example: "In the past, an order of 20 million yuan had been signed in Africa and the net profit was 10 million yuan."

However, in terms of total amount, in fact, for the optical fiber and cable manufacturers, the current international market share is still less than 10% of the total business volume. Basically all manufacturers rely on the domestic optical fiber market support.

In addition, the current pattern of international market changes greatly, and the market is gradually shifting. Ovum expects that China will still lead the global FTTx market in 2015, and after that, the FTTx market will shift from China to other countries in the BRICS. Four countries: India, Brazil, Russia, and South Africa. Tang Xiongyan, deputy chief engineer of the China Unicom Research Institute, told reporters that the growth of the optical communications market will be created by these countries for a long time to come. This is also the main layout point of the current fiber optic cable companies.