Trillion cable industry breaks through 'internal competition', jumps out of price war and moves towards quality competition
Source: Securities Times
Wire and cable are known as the "blood vessels" and "nerves" of the national economy. As the world's largest cable manufacturer and consumer, China's domestic cable market will reach a scale of about 1.2 trillion yuan in 2024. However, this trillion dollar industry also faces prominent problems such as severe low-end "involution" and high-end dependence on imports.
At present, there are over 10000 cable companies of various sizes in China, including more than 4000 enterprises above designated size. However, the overall market share of the top ten companies in the industry is only about 10%. Compared with the market share of over 70% of the top ten companies in countries such as the United States and Japan, the competitive landscape is still in a disorderly and chaotic stage. The price war for mid to low end cables is particularly fierce. Liu Lin, Secretary General of the Communication Cable and Optical Cable Special Committee of the China Communications Enterprise Association, pointed out that "the price per kilometer for mid to low end cables is already cheaper than fans in supermarkets." Among the top ten companies, none have had an average net profit growth rate of over 0.05% in the past three years.
At the same time, the industry is showing a trend of "one decline and one increase" - the overall growth rate of enterprises is decreasing, the number of exits is increasing, and the market mechanism of survival of the fittest dominated by large-scale enterprises is becoming more significant. Starting from this year, State Grid Corporation of China has implemented the reform of bidding by region, further promoting the growth and strength of leading enterprises. In the first half of the year, China Super League Holdings won a bid worth 1.381 billion yuan from State Grid, and currently has 2.929 billion yuan in orders on hand.
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