Hainan Jinpan Smart Technology Co.Ltd(688676) (688676)
Key investment points
Event: the company plans to issue convertible bonds to raise funds, The total investment of the project is 1.417 billion yuan (including 1.197 billion yuan of raised funds), of which 217 / 500 million yuan is invested in Guilin / Wuhan energy storage system product digital chemical plant, 397 million yuan is invested in energy-saving and environmental protection transmission and distribution equipment intelligent manufacturing project (original IPO raised investment project), 123 million yuan is invested in energy storage series product R & D project, and the rest is used for replenishment.
Electrochemical energy storage has a large long-term space, and the company speeds up team expansion and capacity construction. The company has an earlier technical reserve. Since 2016, it began to develop microgrid energy storage power station. In 2018, an integrated intelligent energy storage converter was built and put into operation in Haikou base. The guiding opinions on accelerating the development of new energy storage in 2021 proposed that “the installed capacity of new energy storage will reach more than 30 million KW by 2025”, with clear planning objectives and high growth of electrochemical energy storage. In July 2021, the company established a wholly-owned subsidiary, Jinpan energy storage, and vigorously developed the energy storage business, It can supply electrical equipment (transformer, switch cabinet, box transformer, etc.), PCs, EMS and other products. In terms of production capacity, the construction period of Guilin plant and Wuhan plant of the raised investment project is 18 months, and the annual output of 1.2gwh/2.7gwh energy storage series products can be realized respectively after reaching the production capacity. The price of energy storage system is calculated at the price of 1.5 yuan / wh (the battery cost accounts for 60%), since the company is not engaged in the production of energy storage batteries and BMS, we assume that the corresponding product value of the company accounts for 30% of the energy storage system, which corresponds to the output value of 1.76 billion yuan.
The downstream prosperity of dry-type transformer is high. The company continues to increase the capacity construction, and the capacity is expected to double by the end of 2022. The three downstream products of the company’s dry transformer series have high prosperity: 1) the new energy is mainly wind power, which benefits from the development of large-scale wind turbine + sea wind, and the penetration rate of dry-type transformer in the Chinese market is expected to increase rapidly; 2) Rail transit construction has been strengthened continuously. By the end of 2020, the total investment in the line feasibility study approval of 44 urban construction plans approved by the national development and Reform Commission has reached 4.2 trillion yuan, driving the sales growth of rail transit dry transformation; 3) In terms of energy saving, the high-voltage frequency converter has remarkable energy-saving effect, and the sales volume is expected to increase. As an important supporting component of the high-voltage frequency converter, the phase-shifting rectifier transformer is expected to benefit fully. In addition, In 2021, the Ministry of industry and information technology and other departments initiated the transformer energy efficiency improvement plan (2021-2023) , it is proposed that the operation proportion of high-efficiency and energy-saving transformers in the network will be increased by 10% by 2023, and the proportion of new high-efficiency and energy-saving transformers in that year will reach 75% +. The amorphous alloy transformer and three-dimensional wound iron core dry-type transformer of the company have low no-load loss and excellent energy-saving effect. It is also expected to benefit from the energy-saving replacement of the transformer. In 2020, the capacity utilization rates of dry-type transformer and dry-type reactor of the company were 99.67% and 94.74% respectively. The orders were full and the production capacity tended to be saturated. This raised investment continued to increase the capacity investment of Wuhan plant. We expect that by the end of 2022, the total dry transformation capacity of the four major production bases in Haikou / Guilin / Wuhan / Shanghai will nearly double compared with the same period in 2020, reaching 50 million KVA +, supporting an output value of nearly 4 billion yuan.
Profit forecast and investment rating: we maintained the company’s net profit attributable to the parent company from 2021 to 2023 of 254 million yuan, 376 million yuan and 538 million yuan respectively, with a year-on-year increase of + 10%, + 48% and + 43% respectively, corresponding to 52 times, 35 times and 25 times of the current price (December 17) PE respectively. In 2022, we gave the company 50 times PE as the valuation basis, with a target price of 44.0 yuan / share, maintaining the “buy” rating.
Risk tip: raw material price fluctuation, intensified competition, capacity expansion less than expected, etc.
