\u3000\u3000 Shenzhen Hopewind Electric Co.Ltd(603063) (603063)
Rationality of market expectation
The market expects that the compound growth rate of the company's net profit attributable to the parent company in the next three years will be about 28%, of which the year-on-year growth rate in 2022 will be about 65%, mainly based on the following three points: 1) the competition of wind power converters is intensified, and the profit space may be further squeezed; 2) The order volume of photovoltaic inverter has increased significantly, but the gross profit margin of the Chinese market is low, and the leading market share is stable, so it is difficult to significantly improve the market share of the company; 3) The market space of Engineering transmission field is small, so it is difficult to maintain a high growth rate
Unexpected drivers
We expect the compound growth rate of the company's net profit attributable to the parent company in the next three years to be 34%, about 6pct higher than the market expectation, of which the year-on-year growth rate in 2022 is 90%, about 25pct higher than the market expectation. The main reasons are:
I. short term: the company's performance in the field of photovoltaic inverter is highly uncertain, and the shipment is expected to exceed the market expectation. Driving factors: 1) the company introduces silicon carbide components to partially replace silicon-based IGBT components; 2) China's sales channels were laid faster than expected. Driving mechanism: 1) the supply chain adopts differentiated management to ensure the supply of raw materials when the supply of chip raw materials such as IGBT is tight. At the same time, it has a certain cost advantage to ensure stable delivery; 2) Within the scope of order visibility, the company has sufficient order support from major customers in China. Driving effect: we expect that the revenue growth of photovoltaic inverter in 2022 will far exceed the average growth rate of the industry.
II. Medium and long term: 1) in the field of large MW above 6MW of Haifeng, the company has competitive barriers and enjoys high bargaining power by virtue of its technical advantages; 2) High power industrial transmission has high technical barriers and large domestic substitution space. Driving factors: the company has outstanding technical advantages in the field of large MW frequency converters in China; Driving mechanism: 1) large MW frequency converter needs a long research and development cycle; 2) Limited market space, high superimposed technical barriers and low entry willingness of competitors. Driving effect: 1) the market share of the company's sea breeze converter will further increase with the increase of the average megawatt level; 2) In the field of high-power industrial transmission, we expect the market share of the company to increase significantly with the advancement of localization and substitution process.
Tracking and inspection
We will continue to track the following indicators to test the above logic: 1) in terms of wind power converters: the proportion of frequency converters purchased from the whole plant, the bidding proportion and quotation of large MW fans above 6MW; 2) In terms of photovoltaic inverters: the total installed capacity of distributed in China, the order volume of photovoltaic inverters of the company, and the performance of 2022q1 of the company; 3) Industrial transmission: signing of major projects.
A different life from before
Different understanding of the company's photovoltaic inverter business planning. Before, the company's photovoltaic inverter business volume was small, and the proportion of centralized and distributed inverters was relatively high. Now: 1) since 2021, the company has made a strategic plan to shift the focus of business development to the series photovoltaic inverter market, concentrate resources and improve the channel layout of distributed photovoltaic; 2) The unit value of series inverter is relatively high; 3) Distributed photovoltaic has the dual drive of high profit spontaneous demand of industry and Commerce + policy requirements of the whole county.
Different understanding
There are different understandings on the reliability of technical barriers of professional third-party wind power converter leaders. The market is worried that the technical barrier of wind power converter is low, the price war will affect the field of sea breeze megawatt, and the market space and profitability of independent third-party manufacturers will be suppressed by complete machine manufacturers. We believe that: 1) as an independent third-party leading enterprise, Hewang has a deep technical accumulation in the field of Engineering high-power transmission, and the relevant technologies of wind power converter can be used for reference. At the same time, it has invested more in technical research and development in the field of megawatt frequency converter, and the technical barriers are stable; 2) From the perspective of the whole machine end pattern, according to the bidding data in 2021, the market share of all wind power converters such as prospective energy, Zhejiang Windey Co.Ltd(300772) , Sany Heavy energy and CRRC, which account for the vast majority of the whole machine manufacturers, has increased significantly. With the increase of the average megawatt level, we believe that the proportion of whole machine factory outsourcing will further increase.
Different understanding of the competitive pattern of high-power industrial transmission market. The market believes that the space of industrial transmission industry is small. We believe that: 1) China's high-end industrial transmission field is occupied by European and Japanese enterprises, and the localization rate is only about 10%. The price of domestic industrial transmission frequency converter is competitive, and the domestic substitution space is broad. 2) With the transformation of energy structure, new areas of demand are being explored.
Investment advice
Business forecast and valuation
We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 237 million yuan, 450 million yuan and 602 million yuan respectively, with a year-on-year growth rate of - 11.19%, 90.02% and 34.08% respectively, corresponding EPS of 0.54, 1.03 and 1.38 yuan respectively, and corresponding PE of 68.9, 36.3 and 27.1 times respectively. We select Sungrow Power Supply Co.Ltd(300274) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , Ningbo Deye Technology Co.Ltd(605117) which are also the links of new energy power and electronic equipment as comparable companies in the same industry. The average valuation of the standard industry gives the company 55 times the valuation in 2022, corresponding to the target price of 56.8 yuan, corresponding to the 52% increase in the current stock price, and gives the "buy" rating.
