The China Telecommunication Union released the “National Electricity Supply and Demand Situation Analysis and Forecast Report for the First Quarter of 2024". It is estimated that in 2024, the country's new power generation installed capacity will once again exceed 300 million kilowatts, highlighting the pressure on new energy consumption in some regions.

Driven by the rapid development of non-fossil energy such as solar power and wind power, it is expected that the country's new installed power generation capacity will once again exceed 300 million kilowatts in 2024, and the scale of the increase is basically the same as 2023.

By the end of 2024, the country's installed power generation capacity is expected to reach 3.25 billion kilowatts, an increase of about 12% over the previous year. Thermal power is 1.46 billion kilowatts, of which coal power is about 1.2 billion kilowatts, accounting for 37% of total installed capacity.

The total installed capacity of non-fossil energy power generation was 1.86 billion kilowatts, accounting for about 57% of the total installed capacity; of these, 530 million kilowatts of grid-connected wind power and 780 million kilowatts of grid-connected solar power generation. The total installed capacity of grid-connected wind power and solar power generation is expected to surpass the installed capacity of coal power for the first time from the second quarter to the third quarter of this year. By the end of 2024, it will reach about 1.3 billion kilowatts, accounting for about 40% of the total installed capacity. New energy consumption pressure is prominent in some regions, and utilization rates will decline.

CITIC Construction Investment believes that the future catalytic points of the power equipment industry are expected to be mainly concentrated in the two major fields of networking 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 South Grid was stable year-on-year; the State Grid added a batch of tenders for electric energy meters, and the South 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.

Electric power equipment related enterprises:

Dongfang Electric (01072): The company's business is mainly divided into five major sectors: renewable energy equipment, clean and efficient energy equipment, engineering and trade, modern manufacturing services, and emerging growth industries. The profit contribution mainly comes from the coal power business under clean and efficient energy equipment. The company's revenue from the clean and efficient energy equipment business in 2023 increased by 5.905 billion yuan over the same period last year, up 40.21% year on year, mainly in the coal power, gas engine and nuclear power business. The company has a complete energy equipment development system, and is in a leading position in the industry in various aspects such as thermal power 1000MW grade units and large-scale circulating fluidized bed boilers. In 2023, the company signed new orders of 86.53 billion yuan, a year-on-year increase of 32%. The year-on-year growth rate increased significantly from 16% in 2022; among them, the clean and efficient energy equipment business, which mainly focuses on coal and electricity, signed new orders of 34.13 billion yuan, an increase of 57% over the previous year. The company is one of the main equipment manufacturers of pumping units in China. The overall level of development has reached the advanced level of the industry, with a domestic market share of 38%. It is the first power generation equipment manufacturer in China that also has the ability to develop and debug suction units, and will continue to benefit from the prosperity and development of the pumped energy storage industry.

Harbin Electric (01133): The company's orders continue to increase. In 2023, the company signed a contract amount of 43.565 billion yuan, yoy +29.53%, including 24.590 billion yuan for new power equipment.

Weisheng Holdings (03393): By the end of 2023, the company's active orders were approximately RMB 7.9 billion, +30% compared to the end of '22, and 80% will be delivered within one year. By business, the electronic AMI business is RMB 2.6 billion, the telecommunications AMI business is RMB 3.5 billion, and the ADO business is RMB 1.8 billion. The company's overseas market share remains stable. Of the 7.9 billion on-hand orders, 2.5 billion is overseas business (including 1.2 billion for electricity, 1.2 billion for telecommunications and 100 million for ADO). Overseas revenue is expected to grow by 30% or more in 24 years, with the Mexican market +50% and other markets +15%. The Hungarian plant is expected to be put into operation in July-August '24, and revenue will contribute in the fourth quarter. Overall, the high growth of the overseas business continued from 24 to 25; at the same time, after the ADO business starts operation of the intelligent energy storage production line, revenue growth will accelerate and lead to an increase in gross margin, and the company's overall performance growth momentum will improve.