Core view
1. Event:
Interpretation of relevant contents of new energy in the government work report of the national two sessions in 2022.
2. Our judgment and analysis:
The “implementation of the carbon summit action plan” has continuity. In 2021, “carbon neutralization” was written into the government work report for the first time, and subsequent relevant departments successively issued many top-level design policies. In 2022, the focus will be on “orderly promoting the work of carbon peak and carbon neutralization. Implement the action plan for carbon peak. Promote the energy revolution, ensure energy supply, based on resource endowment, adhere to building first and then breaking, overall planning, and promote the low-carbon transformation of energy”. First mention “new energy supporting power supply construction and power grid consumption capacity”. The 2022 government work report focuses on “promoting the planning and construction of large-scale wind and solar power bases and their supporting regulatory power sources, and improving the consumption capacity of the power grid for renewable energy power generation”. The scale of the first / second batch of large-scale scenery bases is about 100gw / 455gw, and the construction is planned to start during the 14th Five Year Plan period. Energy storage is a high-quality flexible resource, which can cut peak and fill valley within the capacity range, maintain the instantaneous balance of power system and improve the consumption capacity of power grid. Electrochemical energy storage will occupy the absolute main force in new energy storage. We expect it to have a market space with a growth of 12.5 times in five years.
Support the consumption of new energy vehicles. The 2021 government work report did not mention the word “new energy vehicles”. This year, we have given priority to supporting the consumption of new energy vehicles. China Shanxi Guoxin Energy Corporation Limited(600617) automobile market has changed from policy guidance to consumption driven mode. Tesla, China’s new car making forces and overseas traditional giants have made joint efforts to empower science and technology and accelerate the improvement of product power. On the one hand, there has been a qualitative leap in consumer recognition, and the supply of new energy vehicles has created demand at the same time. On the other hand, the driving effect of popular models is significant, superimposed with policy incentives, and the penetration rate of non restricted cities has increased. We expect the sales of new energy vehicles to maintain a high boom this year. First mentioned “energy consumption intensity target remains flexible”. The 2021 government work report proposed to “implement the goal of national independent contribution to climate change in 2030. Reduce energy consumption and carbon dioxide emissions per unit of China’s GDP by 13.5% and 18% respectively”. This year, the major change in the completion caliber of energy consumption indicators is to change to “the energy consumption intensity target shall be comprehensively assessed within the 14th Five Year Plan period, with appropriate flexibility”. We believe that this is mainly related to the “mobile emission reduction” emerged last year and the local power shortage in many places caused by the contradiction between coal and electricity. Add “renewable energy and raw material energy consumption are not included in the total energy consumption control”. At present, both photovoltaic and lithium battery manufacturing industries are driven by high demand, and the price of raw materials has increased significantly. It is urgent to encourage enterprises to actively release effective production capacity, expand supply and guide raw material prices to return to a reasonable range. Recently, the Ministry of industry and information technology made it clear that it would crack down on unfair competition such as hoarding and driving up prices, so as to gradually reduce the price of lithium carbonate. The Ministry of industry and information technology also said at the meeting of the state information office that it would build a green and low-carbon product supply system and increase the supply of photovoltaic, fan and other equipment.
3. Investment strategy:
The two sessions were successfully held, and the government work report released positive signals: promote green and low-carbon development, orderly promote carbon peak and carbon neutralization, implement the carbon peak action plan, promote the energy revolution, ensure energy supply, promote the planning and construction of large-scale wind and solar power bases and their supporting regulatory power sources, and improve the power grid’s capacity to absorb renewable energy power generation. Stimulated by the policy, the valuation of the new energy sector is expected to hit the bottom and rebound.
From expectation driven to performance driven. After the establishment of the “double carbon” goal, relevant policies at home and abroad continued to increase, and the heat of the new energy sector continued to rise. Both new energy vehicles and new energy power generation industry have gone through the transition period from expectation driven to performance driven from 2020 to 2021. In the context of high demand, 2021 will be a year to fully verify the enterprise’s product power, customer structure, supply chain security, cost control, development strategy and so on. From the perspective of listed companies that have disclosed the performance forecast or express report of the annual report in 2021, the vast majority of lithium battery enterprises have achieved high growth, photovoltaic enterprises have mixed feelings, silicon material enterprises have outstanding profits, and more than half of power grid enterprises have achieved positive growth, but the performance differentiation is obvious, wind power enterprises are excellent, and the loss proportion of energy storage enterprises is high. In 2022, we believe that the investment main line of “performance is king” will run through the whole year. It is recommended to select industry leaders with sustained high performance.
From the perspective of short-term game, 1) photovoltaic: the international situation is turbulent, the war between Russia and Ukraine is escalating, getting rid of the constraints on traditional resources such as oil and natural gas, and the value of new energy is prominent. In 2022, the photovoltaic industry will embrace the silicon material price reduction cycle, and the industrial chain price will gradually return to a reasonable range. It is suggested to grasp the three main lines of “inverter, integration and auxiliary materials”, and recommend Longi Green Energy Technology Co.Ltd(601012) ( Longi Green Energy Technology Co.Ltd(601012) . SH), Ja Solar Technology Co.Ltd(002459) ( Ja Solar Technology Co.Ltd(002459) . SZ), Sungrow Power Supply Co.Ltd(300274) ( Sungrow Power Supply Co.Ltd(300274) . SZ), Xinjiang Daqo New Energy Co.Ltd(688303) ( Xinjiang Daqo New Energy Co.Ltd(688303) . SH), Hangzhou First Applied Material Co.Ltd(603806) ( Hangzhou First Applied Material Co.Ltd(603806) . SH), etc. 2) Energy storage: the key link of energy transformation. It is recommended that Pylon Technologies Co.Ltd(688063) ( Pylon Technologies Co.Ltd(688063) . SH), Ginlong Technologies Co.Ltd(300763) ( Ginlong Technologies Co.Ltd(300763) . SZ), Hemai Co., Ltd. (688032. SH), etc.
From the perspective of long-term value, 1) lithium battery: it is expected that electric vehicles will maintain a high popularity in 2022, thus stimulating the demand for lithium battery. Battery leaders Contemporary Amperex Technology Co.Limited(300750) ( Contemporary Amperex Technology Co.Limited(300750) . SZ), Eve Energy Co.Ltd(300014) ( Eve Energy Co.Ltd(300014) . SZ) are recommended; It is suggested to grasp two main lines in the material link: expand new customers overseas, recommend Beijing Easpring Material Technology Co.Ltd(300073) ( Beijing Easpring Material Technology Co.Ltd(300073) . SZ), Cngr Advanced Material Co.Ltd(300919) ( Cngr Advanced Material Co.Ltd(300919) . SZ), Shenzhen Kedali Industry Co.Ltd(002850) ( Shenzhen Kedali Industry Co.Ltd(002850) . SZ), etc; Tight supply and demand, strong bargaining power, recommended Yunnan Energy New Material Co.Ltd(002812) ( Yunnan Energy New Material Co.Ltd(002812) . SZ), Shenzhen Dynanonic Co.Ltd(300769) ( Shenzhen Dynanonic Co.Ltd(300769) . SZ), Ningbo Shanshan Co.Ltd(600884) ( Ningbo Shanshan Co.Ltd(600884) . SZ), Hunan Zhongke Electric Co.Ltd(300035) ( Hunan Zhongke Electric Co.Ltd(300035) . SZ), etc. 2) Power grid: under the background of “steady growth”, in line with the great development of new energy, the power grid has ushered in a golden development period. The new infrastructure of electric power will advance steadily, and the digital transformation of power grid will deeply embrace new technologies and models. Recommend leaders in the field of information automation State Grid Information&Communication Co.Ltd(600131) ( State Grid Information&Communication Co.Ltd(600131) . SH) and Nari Technology Co.Ltd(600406) ( Nari Technology Co.Ltd(600406) . SH), etc.
4. Risk warning
(1) risk of aggravation of covid-19 and other epidemic situations;
(2) the risk that the sales volume of new energy vehicles is lower than expected;
(3) the risk of declining power demand or insufficient consumption capacity of new energy power generation;
(4) the risk that the shortage of resource products or parts leads to the sharp rise in the price of raw materials and the difficulty of enterprise operation;
(5) the risk that the product price will continue to decline due to the intensification of competition;
(6) policy risks caused by overseas political turmoil and deterioration of overseas trade environment.
