The future catalysts for the power equipment industry are expected to be mainly concentrated in two major fields: in-network and overseas.
According to the IEA “Electricity 2024” report, global electricity demand increased 2.2% year over year in 2023, down 0.2% from 2022.
The IEA predicts that in 2024-2026, global economic growth will drive rapid growth in electricity demand. Rapid electrification of the residential and transportation sectors and the acceleration of data center construction are the main driving forces, particularly in China and developed economies.
CITIC Construction Investment Securities released a research report saying that the future catalytic points of the power equipment industry are expected to be mainly concentrated in two major fields: within the network and overseas.
On the internal side of the network, the 2024 bidding pace for the Guo/South Network is clear, and centralized bidding is progressing steadily. The number of tenders for the main core equipment of the State Grid and the Southern Grid was stable year-on-year; the State Grid added a batch of tenders for electric energy meters, and the Southern Grid increased the procurement types of intelligent power distribution gateways, etc.
It is expected that the tender scale, product structure, bid winning pattern, and penetration rate of new technology for projects such as UHV, power transmission and transformation, electric energy meters, and main network primary and secondary equipment will have a great impact on the market.
The tender period is expected to be mainly concentrated in the second and third quarters.
Furthermore, in terms of going overseas, by tracking customs data, it is possible to analyze the monthly export situation of various power equipment products and determine future trends. Overseas exports will maintain an upward trend in February 2024.
CITIC Construction Investment continues to be optimistic about power equipment going overseas (primary equipment, electric energy meters), increasing investment within the network (structural opportunities brought about by the steady advance of UHV, increases in core main equipment, etc.), and focuses on targets with high demand elasticity at home and abroad.
Electric power equipment related enterprises include:
Weisheng Holdings (03393): Weisheng Holdings is a leading supplier of energy metering equipment, systems and services in China. The company's core products and services are electric AMI business, communication and fluid AMI business, and ADO business, respectively. Guoyuan International previously pointed out that in 2024, tenders for State Grid electric energy meters will accelerate, and industry sentiment will continue to improve; the company has a significant first-mover advantage in overseas electric energy meters, and overseas business can be expected to grow in the future.
Dongfang Electric (01072): Achieved breakthroughs in high-power offshore wind power, floating offshore wind power, variable speed storage, serial autonomous combustion engines, nuclear power high-temperature reactors, advanced hydrogen energy, and new energy storage. According to the investor interactive platform, the company's share of the coal power market is 38% and the nuclear power market share is 40%.