Event: on December 27, 2021, according to the official website of the national development and Reform Commission, the Jiangsu coastal area development plan (2021-2025) (hereinafter referred to as the plan) was officially issued on December 27, 2021, which planned the medium and long-term industrial development in Jiangsu coastal areas, emphasizing the vigorous development of marine economic development axis including offshore wind power.
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Jiangsu sea breeze construction has high policy support and strong development certainty
The plan brings offshore wind power into the offshore marine economic development axis. In the construction of key green energy sources, it once again emphasizes the construction of offshore wind power, promotes the far-reaching pilot demonstration of offshore wind power and the construction of "energy island", and supports the exploration of the integrated development of offshore wind, photovoltaic and marine pasture; Specifically, it is proposed to speed up the construction of offshore 10 million KW offshore wind power base, and plan and study the deep-sea 10 million KW offshore wind power base; We will implement key projects such as Fenghai and Tonghai 500 kV power transmission and transformation projects, and simultaneously plan the supporting peak shaving power supply for the 10 million KW offshore wind power base and the Nantong Suzhou River crossing project. Promote the layout of the whole wind power industry chain and the development of photovoltaic industry cluster, build Yancheng National Offshore Wind Power Inspection Center, and build a new energy industry base with global influence. In terms of policy, various financial institutions are encouraged to increase investment and financing support for Jiangsu coastal areas and set up branches in accordance with laws and regulations; And study the reduction or exemption of sea area use fees according to law.
Jiangsu is rich in sea breeze resources. Yancheng sea breeze planning exceeds expectations and has large long-term growth space
The coastal areas of Jiangsu include all administrative areas under the jurisdiction of Jiangsu Lianyungang Port Co.Ltd(601008) , Yancheng and Nantong. The sea area is 37500 square kilometers, the coastline is 954km long, the offshore wind speed is 6.5-7.5m/s, and the installed grid connection scale of offshore wind power is 5.73 million KW, accounting for 63.7% of the country. On November 15, the Offshore Wind Power Summit Forum was held in Yancheng City, Jiangsu Province. It was proposed that during the 14th Five Year Plan period, Yancheng plans to have 9.02 million KW offshore and 24 million KW far-reaching offshore wind power capacity, accelerate the construction of 10 million KW offshore wind power demonstration base, and strive to achieve a new energy installed capacity of more than 20 million KW by the end of the 14th five year plan.
In the near future, the long-term plan for sea breeze construction in the eastern coastal area with high-quality wind farm resources will further drive the development of sea breeze industry. For example, in Zhangzhou, Fujian, in June 2021, the clean energy Strait summit forum pointed out that Zhangzhou municipal government plans to develop 50 million KW offshore wind power in the city's coastal areas and build the largest clean energy base in the southeast coast. On November 2, Shandong proposed to focus on the three areas of Bozhong, the north of the peninsula and the south of the peninsula, promote the centralized connection of offshore wind power and the development and application demonstration of deep-water far shore, and build a 10 million KW offshore wind power base.
With the vigorous development of offshore wind power, the submarine cable industry is expected to benefit directly
In the construction cost, it generally includes wind turbine equipment, construction and installation expenses, tower, submarine cable and supporting facilities, of which wind turbine equipment (45%) and construction and installation expenses (25%) account for the main, and submarine cable and supporting facilities account for about 8%. Submarine cable is different from land and sea wind common equipment such as wind turbine, blade and tower, and is exclusive to offshore wind power.
At present, the competition pattern of China's submarine cable market is relatively stable. According to the data of China Economic Research Institute, the ranking of China's market share in 2019 is: Jiangsu Zhongtian Technology Co.Ltd(600522) 44%, Ningbo Orient Wires & Cables Co.Ltd(603606) 20%, Hengtong Optic-Electric Co.Ltd(600487) 5%, Qingdao Hanhe Cable Co.Ltd(002498) 29%. With the transformation of submarine cable bidding of China's offshore wind power projects to the whole package mode of "manufacturing + laying", submarine cable enterprises with the whole package ability will be more competitive in the process of winning the bid.
Benefiting from the accelerated development of the whole offshore wind industry, especially the rush to install since 2020, the market scale of submarine cable industry has also increased synchronously. According to the statistics of Huajing Industry Research Institute, the market scale of China's wind power submarine cable industry in 2020 was 6 billion yuan, a year-on-year increase of 53.85%, and the average annual compound growth rate was 79.48%. It is expected to reach 25.4 billion yuan by 2025.
Jiangsu Zhongtian Technology Co.Ltd(600522) deeply cultivate the multi land submarine cable market, with excellent comprehensive strength and strong certainty of benefits
Jiangsu has sufficient production capacity: Zhongtian has set up three submarine cable manufacturing bases in Nantong, Yancheng and Shanwei, Guangdong. With the advantage of localization, Zhongtian is committed to building the largest marine engineering wire and cable industrialization base in Asia.
Profound industry qualification: Zhongtian has supplied 1000km of 220kV and above high-voltage submarine cables in Jiangsu sea area, and 6 main construction general contracting projects of offshore wind power, And completed the longest three core 220kV submarine cable in China (96.5km long) - the national power investment Rudong H4 and H7 offshore wind power projects; the international highest voltage level ± 400kV cross-linked polyethylene insulated DC submarine cable - Jiangsu rudonghai Shangfeng power project; and the three core 220kV submarine cable with the largest section in China (3 × 1000mm2) - Three Gorges Dafeng h8-2 offshore wind power project.
Zhongtian has strong competitiveness in acquiring China Three Gorges Renewables (Group) Co.Ltd(600905) Yangjiang project. On December 20, 2021, China Three Gorges Renewables (Group) Co.Ltd(600905) announced that the planned installed capacity of the Three Gorges Yangjiang Qingzhou 5 / 6 / 7 offshore wind farm project is 1GW, with a total of 3gw. The dynamic investment amounts are 14.053 billion yuan, 13.761 billion yuan and 13.356 billion yuan respectively, with a total investment amount of 41.169 billion yuan, of which the project capital accounts for 25% of the investment amount. In August, Yangxi County People's government announced that the submarine cable transmission project of Qingzhou No. 5 and No. 7 offshore wind power project plans to adopt flexible DC transmission technology.
Jiangsu Zhongtian Technology Co.Ltd(600522) flexible direct technology is a leader in China. It delivered the first ± 400kV flexible DC submarine cable in Jiangsu Rudong flexible DC transmission project. The company has strong submarine cable and marine engineering capacity. Recently, it established a joint venture with Jinfeng to engage in offshore wind power engineering contracting business, realize further coverage of the offshore wind industry chain, and enhance the overall market competitiveness and profitability, It will also continue to benefit from the construction of Guangdong sea breeze.
Investment suggestions and risk tips
Offshore wind power has large long-term growth space and strong certainty. The competition barrier of submarine cable industry is high and the competition pattern is stable. The leader is expected to benefit from the core. Key recommendation: leader in submarine cable industry [ Jiangsu Zhongtian Technology Co.Ltd(600522) ]; It is suggested to pay attention to: [ Hengtong Optic-Electric Co.Ltd(600487) ], [ Ningbo Orient Wires & Cables Co.Ltd(603606) ], etc.
Risk tips: the risk that the development of marine business is less than expected, the risk of price fluctuation of raw materials, the risk of market competition, the risk of project management, the risk of macroeconomic and industrial policy changes, the risk of repeated spread of covid-19 epidemic, etc.
