1. The global wire and cable industry overview
The wire and cable industry report can help you understand cable industry. The reports are widely used in energy, transportation, communications, automotive, petrochemical and other fields, in recent years, the global power cable industry continues to rise in size, although the growth slowdown after 2018 is more obvious, but led by the growth in demand in emerging markets, to 2017 global power cable industry revenue of about $207.3 billion, an increase of 7.9% over 2019.
At the same time, the global metal insulated wire and cable market consumption to maintain relatively stable growth, 12 years before 2015, the average annual growth rate of 3.3%, after the growth rate began to slow down, the growth rate of 1.8% in 2018, from the perspective of market supply and demand, the global wire and cable market tends to mature.
According to statistical data, the overall situation of the power cable industry worldwide shows that the Asian region is rising rapidly, the Americas region is rising slowly, the European region in recent years the development of more unstable, by economic and political factors such as the impact of the larger. Asia accounted for about 39% of the global market size,
Europe and the Americas accounted for 27% and 25%, respectively, and other regions accounted for about 9%. From the data, in recent years, Asia and other emerging market countries with faster economic growth, the world’s wire and cable production center of gravity to Asia, driving the rapid development of China, the Philippines, Vietnam and the Middle East and other countries wire and cable industry.
From the following chart of the world’s top ten cable companies can be seen, Europe and the United States and Japan still occupy the high-end market, Europe and the United States and Japan wire and cable industry started earlier, and rely on capital, technology, talent advantages in the formation of a multinational, cross-regional scale, specialized wire and cable industry, accounting for a larger share of the international market. Emerging markets are facing vicious price competition in the low-end market, product quality worries and environmental protection indicators failing and other problems, the need to improve industrial technology and innovation and transformation to solve the current problem.
2. Chinese Wire and Cable Industry Report
Since the reform and opening-up, China’s wire and cable industry has developed rapidly, has become one of the important basic supporting industries in the development of the national economy, to 2012, China’s total output value of wire and cable more than trillion has surpassed the United States to become the world’s largest producer of wire and cable, but also produced more problems, including the more prominent problem is large but not strong.
The total cost of the wire and cable industry, the main business costs account for more than 90% of the main business costs are copper, aluminum, insulation material, shielding material and other direct material costs, including copper, aluminum and other major raw material prices continue to be high decided the wire and cable industry, “material heavy light” characteristics, such characteristics cause wire and cable Market access barriers are low, forming a fully competitive market.
At present, China’s wire and cable industry manufacturers, according to the National Bureau of Statistics data, “Eleventh Five-Year Plan” at the end of China’s wire and cable industry has been more than 9,000 enterprises of all sizes, far more than the number, thousands of wire and cable enterprises, only more than 2,000 enterprises to reach the scale level, to compete in the international market Competitive enterprises are only a few
The top ten domestic wire and cable companies account for only about 10% of the market share, and the concentration of the industry abroad is far from. As of 2017, Chinese wire and cable companies still failed to be among the top ten wire and cable companies in the world, but ZW Cable quality is increasingly recognized by more and more people.
Industry concentration is more fragmented at the same time, the product structure is also imbalanced, high-end product development capabilities, a large amount of capital into the low-end wire and cable market directly led to excess capacity in the field of low-voltage wire and cable, while triggering irrational price competition in the low-end market, industry profit margins are low, it is understood that the gross profit margin of low-end wire and cable companies have been less than 5%, the survival situation is grim.
From the industry segmentation table we can also see that the sales growth of electric power electrical cables slowed down more obvious, communication cable station market size is less, but the growth rate is more stable, other areas of cable sales growth is stable. For a long time, the domestic high-voltage, ultra-high-voltage wire and cable market is mainly monopolized by a small number of foreign companies, joint ventures and domestic wire and cable industry leaders, high-end cables, special cables are in strong demand, is one of the future direction of transformation.
3. Wire and Cable Industry report-The listed companies.
Summary of the half-yearly performance report of twenty-four wire and cable listed companies in China in 2018, from the data, we can see that the wire and cable companies had better year-on-year growth in revenue, most of them achieved double-digit growth in revenue, only five had year-on-year growth in revenue below double-digit, two of them had negative revenue growth.
After deducting non-recurring gains and losses, a total of 10 companies with a net profit below the double-digit word, including five withholding non-net profit is negative, at the same time we can also find that the overall profitability of listed companies in the wire and cable industry report is low, most companies operating income than net profit growth, the market has shown a more obvious increase in revenue does not increase profit phenomenon, it is understood that from the previous year to date the wire and cable industry report.
This phenomenon is becoming more and more obvious, it can be seen that the cable business competition further intensified, the problem of increasingly serious homogeneous competition, and from the semi-annual reports of listed companies can also see that most companies have a high proportion of investment in research and development costs, transformation and upgrading has been an important task of the cable business is imminent.
From the main business structure distribution can be seen, power cables are still the largest part of the cable business, accounting for 28.81% of the main composition, followed by communication cables, special cables and bare conductors, respectively, accounting for 10.8%, 8.6% and 8.04% of the main composition, the enameled wire and other cables accounted for less.
Because of the different operating conditions of each enterprise, the gross profit margin of the product varies greatly, so the median is used as the mean to study, and the absolute average is not used. We can see that the highest gross margin is submarine cable and communication cable, respectively, 30.53% and 24.14%, but the main composition of the two is a big difference, submarine cable accounted for only 0.48%, it is understood that the main submarine cable technology barriers are high, the core technology has long been mastered by foreign countries, and has long been monopolized by Nexans
Communication cable and special cable gross margin followed, respectively, 24.14% and 15.89%, but communication cables, optical cables, special cables with relatively low technical content, is the mainstream direction of transformation of the wire and cable industry, according to the relevant industry listed companies understand that the industry competition in wire and cable has been extended from low-end products to medium and high-end products, including high-voltage cables, special cables and communication cables and optical cables The market competition began to become fierce.
The gross margin of power cables is only about 13.77%, but still the largest component of the cable market, the most competitive market, while the gross margin of electromagnetic wire and enameled wire is low, only a relatively small number of companies operating in listed companies, the lowest gross margin of bare conductors, only 3.42%, but bare conductors are commonly used in the field of high-voltage products, but also wire and cable processing accessories, there are still more companies operating.
In the process of industry transformation, there are some enterprises with large transformation span, for example, only 16.84% of TBEA’s main products are power cables, and the main part is a transformer and new energy industry, the gross margin of this part is 28.8%, while the gross margin of the company’s power cable products is only 5.2%. Fiberhome’s main composition is only 25.91% is communication cable, and the main composition is larger ICT business and communication equipment, etc.
The gross profit rate of this part is 22.49%, and the gross profit rate of the company’s communication cable products is 18.01%. There are also some companies to enter the field of new energy, lithium batteries and military industry, etc., but the transformation span to will be accompanied by higher risks, the current wire and cable companies are still in the middle and high-end product transformation goals, while developing overseas markets to cope with the increasingly fierce market competition.
4. wire and cable business views
This year’s national grid plan investment is 498.9 billion yuan, from the current data, January to July, the country’s major power generation enterprises power supply project completed an investment of 123.8 billion yuan, down 1.4% year-on-year, the national grid project completed an investment of 234.7 billion yuan, down 16.6% year-on-year. The first half of the power grid investment completion progress did not reach half of the planned investment, a more significant year-on-year decline if you want to complete the annual plan, the second half of the power grid investment amount to speed up the possibility.
The forecast overall increase will not be very large, so many wire and cable companies are cautiously optimistic about the second half of the order, some listed companies in the half-year report also said only to achieve stable growth for this year’s business objectives. The following table shows the market views of listed companies on the second half of the year and the countermeasures taken.
5. Summary of Wire and Cable Industry report
Overall, wire and cable industry report is in a stage of industrial consolidation and transformation, which can be said to be the epitome of domestic small and medium-sized manufacturing enterprises, and the industry is entering a phase of reshuffling and consolidation after the overcapacity caused by the influx of capital. But this year’s macro-environment is more complex, with the impact of the U.S. trade war abroad, the domestic private enterprises operating in a difficult predicament.
At the time of internal and external problems, wire and cable enterprises will be more difficult survival environment, market competition will be more intense, challenges and opportunities coexist, only to accelerate the pace of industrial transformation, improve the ability of independent innovation, improve the quality of products and technology value-added, in order to seize the opportunity in the complex market environment. Cable World will publish personal cable news.