Hainan Jinpan Smart Technology Co.Ltd(688676) (688676)
Hainan Jinpan Smart Technology Co.Ltd(688676) is a global dry-type transformer head enterprise, mainly for direct sales in medium and high-end markets such as new energy. Dry type transformers account for more than 70% of the company's main business (2020A). Other products include dry-type reactors, complete sets of medium and low voltage switches, box type substation SVG, etc. in 2020, the three downstream applications of new energy (including wind power, photovoltaic, power grid, etc.) and high-end equipment (including rail transit, etc.) and energy conservation and environmental protection account for 46% / 13% / 11% of revenue respectively. The customer structure is high-quality. The company has established long-term cooperation with international well-known enterprises such as Vestas, Siemens COMESA and Ge, as well as head companies such as China Railway, State Grid China Southern Power Grid, Shanghai Electric Group Company Limited(601727) , Sungrow Power Supply Co.Ltd(300274) .
Benefiting from the large-scale fan and the improvement of sea wind installation, the penetration rate of dry-type transformer in China has increased rapidly, the long-term market space is broad, and the company has significant competitive advantages and is expected to maintain a leading position. Under the pressure of fan cost reduction, high-power fan + offshore fan is booming. Dry type transformer has gradually become the preferred scheme for high-power fan and offshore wind due to its excellent operation performance and low system comprehensive cost. Overseas wind power dry substation is dominated by the stock market, while China is still in its infancy and has great room to improve its penetration. We expect that the new market scale of global wind power dry substation will reach 8.2 billion yuan by 2025 and the CAGR will reach 29% from 2021 to 2025. The company has long been bound with global wind power leaders such as Siemens COMESA and Ge, and the installed capacity market share is the world leader. Dry transformer products in the wind power field have high barriers and a stable pattern for a long time. Compared with foreign competitors, the company's products have high cost performance and faster service response; There are no domestic competitors, and the wind power dry transformation process is difficult, which requires the accumulation of project experience, so it is difficult for Chinese competitors to pose a threat in the medium term. Therefore, the company is expected to regain its leading position in overseas dry transformation in China's business development.
Rail transit / energy conservation and other downstream fields increased steadily, consolidated their dominant position, and positioned for medium and long-term development at the beginning of energy storage / photovoltaic. 1) The company has been deeply engaged in the field of rail transit for many years, and the winning share is leading in China. The demand for supporting special dry transformer of the company is expected to grow steadily with the rail transit construction; Energy saving related transformers benefit from energy efficiency control policies. The company binds leaders to share dividends, and there is a large room for share improvement; 2) The company has established a subsidiary, Jinpan new energy, focusing on the photovoltaic EPC field, with distributed and centralized synchronous efforts. By 2020, the business scale and order amount are relatively small, but the future can be expected; Since 2009, the cumulative orders of pumping and storage related products have exceeded 100 million yuan, with a relatively stable growth. Electrochemical energy storage is expected to achieve rapid growth through the energy storage layout of its subsidiary Jinpan.
Capacity overweight helps order digestion, digital empowerment and lean manufacturing management. From 2019 to 2020, due to tight production capacity and high order growth, the company will increase its capacity construction, and the four production bases of Haikou / Guilin / Wuhan / Shanghai will expand their production to a certain extent. We expect that the dry transformation capacity will nearly double by the end of 2022 compared with the same period in 2020, reaching 50 million KVA +, supporting an output value of nearly 4 billion yuan. The company's production and delivery capacity is expected to be significantly improved. At the same time, digital operation will help multi variety and small batch flexible production, and further enhance the competitiveness of the company's dry-type transformer series products.
Profit forecast and investment rating: due to the high growth of the company's wind power dry transformation and good downstream performance, we expect the company's net profit attributable to the parent company from 2021 to 2023 to be RMB 254 million, RMB 376 million and RMB 538 million respectively, with a year-on-year increase of + 10%, + 48% and + 43% respectively, The corresponding current price (December 17) PE is 52 times, 35 times and 25 times respectively. The comparable companies are the leading enterprises related to transformers and wind power parts, and the PE (TTM) of the comparable companies in 2022 or 2021 is 40 times or more. Considering that the company is the global leader of wind power dry-type transformer, the permeability of China's dry-type transformer has increased and the superimposed competition pattern is excellent, the company will be given 50 times PE as the valuation basis in 2022, the target price is 44.0 yuan / share, and the "buy" rating will be given for the first time.
Risk tips: raw material prices fluctuate, competition intensifies, capacity expansion is less than expected, Sino US trade friction risk, and customer concentration is high.
