Domestic and foreign smart grid construction has entered an upward boom. The domestic market will usher in a new round of peak inventory replacement in 2024-2025, and the high increase in overseas demand is expected to continue.
The Zhitong Finance App learned that Galaxy Securities released a research report saying that on April 7, 1 batch of State Grid metering equipment (1 batch of electric energy meters) won the bid. The total amount of the bid was 12.380 billion yuan, a decrease of 13.23% over the previous year, and an increase of 37.28% over the previous year. The bank believes that with the construction of the ubiquitous Internet of Things and the implementation of the IR46 proposal, the two network companies are expected to accelerate the increase in bidding demand for high-precision meters above grade B in the future, and the value of a single meter is expected to gradually increase. Furthermore, smart grid construction at home and abroad has entered an upward boom. The domestic market will usher in a new round of peak inventory replacement in 2024-2025, and the high increase in overseas demand is expected to continue.
Focus on: Haixing Electric Power (603556.SH), Samsung Healthcare (601567.SH), Linyang Energy (601222.SH), Weisheng Information () (computer group coverage), Guodian Nanrui (USD), Kelu Electronics (002121.SZ), Juhua Technology (300360.SZ), Dongfang Electronics (000682.SZ), which won top bids in the domestic State Grid and South Grid markets and continues to be redeemed in overseas revenue. 688100.SH 600406.SH
Incident: On April 7, the first batch of State Grid metering equipment (1 batch of electric energy meters) won the bid. The total bid amount was 12.380 billion yuan, a decrease of 13.23% from the previous month, and an increase of 37.28% over the previous year. Visheng (including Weisheng Holdings and Weisheng Information), Oriental Weston (a subsidiary of Oriental Electronics), Samsung Healthcare, Xuji Electric (Xuji meter), and Linyang Energy were the top 5 winners.
Galaxy Securities's views are as follows:
The State Grid smart meter market is fragmented.
According to data from the State Grid e-commerce platform, the overall number of companies that won the bid for electricity meters remains above 70, and the market is scattered. A total of 81 companies won the bid in this batch. Looking at the corporate landscape, Guodian Nanrui (Nanrui Zhongtian), Samsung Healthcare, Weisheng, Xuji Electric (Xuji meter), Linyang Energy, Haixing Electric, Dongfang Weston, and Huali Technology maintained the top 10 positions throughout the year, and their market share stabilized at 2%-4%. According to Data Electric Power's public account data, in this batch, Weisheng (including Visheng Holdings and Weisheng Information) won the most bid of 412 million yuan, accounting for 3.33%, while Weston won the bid of more than 400 million yuan, ranking second, accounting for 3.26%.
The pattern of TOP10 manufacturers is generally stable.
In the State Grid meter market, the TOP10 manufacturers ranked relatively stable in terms of bid amounts, while second-tier manufacturers Wansheng Intelligence, Xili Technology, and Canan Smart fluctuated greatly. According to Data Electric Power's public account data, Dongfang Wiston (403 million yuan), Linyang Energy (322 million yuan), Wansheng Intelligence (270 million yuan), Xili Technology (244 million yuan), and Colin Electric (205 million yuan) ranked 2nd, 5th, 13th, 16th, and 24th respectively in this batch. The rankings increased significantly, increasing 4, 6, 11, and 18 places respectively. Xu Ji Electric (Xu Ji Meter) ranked 4th, remaining the same as the previous batch. Samsung Healthcare (395 million yuan), Haixing Electric (302 million yuan), and Kelu Electronics (281 million yuan) ranked 3rd, 8th, and 12th respectively. The rankings declined 2, 1, and 2 places, respectively, and were relatively stable. Juhua Technology (161 million yuan) and Canan Intelligence (117 million yuan) ranked 38th and 50th respectively, falling 29 and 37 places respectively.
The value of the new generation of smart electronic form meters is expected to increase.
The European Union introduced the MID certification implementation standard for measuring instruments, which divides the accuracy levels into A, B, and C grade electric energy meters. They correspond to level 2, level 1, and grade 0.5 electric energy meters in the IEC standard. The smaller the grade value, the higher the accuracy of the meter. According to statistics from Data Electric Power's official account, the penetration rates of smart energy meters above grade B (inclusive) of the State Grid in 2021-2023 were 13.5%, 18.4%, and 19.1%, respectively. The average value of a single meter was 552.95 yuan, 572.71 yuan, and 521.63 yuan, respectively, which is 166.1%, 159.3%, and 153.6% higher than the value of the same batch of A-grade electricity meters. In addition, the State Grid added about 10,000 new high-end smart meters to the 2021 batch of electric energy meters tender category. Weisheng Holdings, Samsung Healthcare, and Oriental Weston all covered the high-end market, with market shares of 37.02%, 33.31%, and 29.67%, respectively. The bank believes that with the construction of the ubiquitous Internet of Things and the implementation of the IR46 proposal, the two network companies are expected to accelerate the increase in bidding demand for high-precision meters above grade B in the future, and the value of a single meter is expected to gradually increase.
In 2024-2025, the State Grid electricity meter will usher in a new round of peak replacement.
The State Grid plans to bid for three batches of electric energy meters in February, July, and October in 2024, which is higher than the usual 2 batches. The bank believes that the annual tender amount is expected to exceed expectations, and the overall number of tenders is expected to reach 90 million to 100 million. Assuming that the share of demand for electric meters at all levels remains the same as in 2023, the tender amount for electric energy meters is expected to exceed 25 billion yuan in 2024, an increase of 32% over the previous year. Considering that 2014-2015 was the peak of tenders for first-generation smart meters, the rotation period was extended to about 10 years under the gradual promotion of the status change strategy, and technical standards for next-generation smart meters are gradually being implemented, the bank expects 2024-2025 to usher in a new round of meter replacement peaks.
Risk warning: risk of demand falling short of expectations; risk of declining profitability due to increased competition in the industry.