Zhitong Financial APP learned that Cinda Securities released a research report saying that the market performance of power equipment throughout the year is good. In terms of fundamentals, the proportion of new energy generation and installed capacity is constantly increasing, and the load gap between consumption and power generation in various regions of our country is gradually widening, leading to an increase in inter-provincial transmission demand, grid investment is at a high level, and the power equipment sector is booming. Looking forward to next year, the bank believes that: 1) under the current economic situation, the role of countercyclical regulation and control of power grid companies is essential; 2) the investment center of the 14th five-year Plan of power grid companies is enhanced; and 3) a series of changes brought about by the continuous increase in the proportion of new energy need to be solved step by step in the construction of power transmission and distribution. As a result, the bank believes that grid investment is expected to increase further.
The main points of Cinda Securities are as follows:
The counter-cyclical property of the power equipment plate is obvious, and the consumption bottleneck is expected to maintain the high prosperity of the industry in the future.
Reviewing the market for the whole year, it is found that there is a strong negative correlation between the trend of the power equipment sector and the expectation of economic growth, and the market performance of power equipment in the whole year is good. From a fundamental point of view, the proportion of new energy generation and installed capacity is increasing, and the load gap between consumption and power generation in various regions of our country is gradually widening, leading to an increase in inter-provincial transmission demand, power grid investment is at a high level, and the power equipment sector is booming. Looking forward to next year, the bank believes that 1) under the current economic situation, the role of countercyclical regulation and control of power grid companies is essential; 2) the investment center of the 14th five-year Plan of power grid companies is enhanced; and 3) a series of changes brought about by the continuous increase in the proportion of new energy need to be solved step by step in the construction of power transmission and distribution. As a result, the bank believes that grid investment is expected to increase further.
Structurally, UHV and main network construction continue, and distribution network investment is expected to improve marginally.
UHV and intelligent distribution network are the clear investment priorities of power grid companies in the "14th five-year Plan". In terms of UHV, the construction of UHV DC has made rapid progress in 2023, and the amount of investment is at the highest level in recent years. According to the bank, as of August 2023, construction has started four direct and one delivery, with an investment of about 97.2 billion yuan. Looking ahead to next year, the bank believes that UHV progress is still behind the planned target, and the amount of investment is expected to remain high. In terms of the construction of the main network, the amount of the first four tenders for the main network investment is at a high level in nearly three years. Transformers and combined electrical appliances are the main investment equipment of the main network, and the relevant high-voltage plate enterprises have benefited deeply. In terms of distribution network, the construction of distribution network investment slows down, and the performance of medium-pressure plate enterprises is under pressure, but from the lengthening dimension, distribution network investment is the focus of investment in the 14th five-year Plan, and the second half of the period is expected to be marginal. In terms of direction, the intelligent construction of distribution network involves a comprehensive field, including the process of transmission and distribution, the improvement of power quality and the intellectualization of residential power consumption, in which the virtual power plant is the construction direction of distribution network and load side, which is expected to achieve 0-1 process.
As the overseas demand for power equipment is improving, it is recommended to pay attention to the enterprises with overseas business layout.
The coverage of China's "Belt and Road Initiative" is constantly expanding, promoting power equipment enterprises to go overseas. In recent years, the export amount of transformers has increased, the proportion of high-end transformers with large capacity has increased, and power equipment is in the period of high quality going out to sea. Regionally, Asia and Oceania lead the growth rate of power transmission and distribution investment, while North America may usher in a new round of growth in recent years. In addition, the bank believes that the rapid development of AI may lead to a shortage of power and supporting electrical equipment, which in turn brings opportunities for China's power equipment to go to sea, and enterprises with first-mover advantages are expected to benefit.
Investment advice:
Pay attention to the related targets of high voltage plate: Siyuan Electric (002028.SZ), Sifang Co. (601126.SH), Guodian Nanrui (600406.SH), Changgao Dianxin (002452.SZ), etc.
Pay attention to the targets of medium voltage plates related to distribution network: Colin Electric (603050.SH), Shen Hao Technology (300853.SZ), Yijiahe (603666.SH), etc.
Sifang shares, Suwen Electric Power (300982.SZ), Ankeri (300286.SZ), National Energy Rixin (301162.SZ), Oriental Electronics (000682.SZ), etc.
Virtual power plant operation-related enterprises: core Energy Technology (603105.SH), Tracy (300001.SZ), Crystal Science and Technology (601778.SH) and so on.
Risk factors:The investment in power grid is lower than expected, the price of raw materials fluctuates, the progress of power grid construction is not as expected, and the market competition intensifies.