Industry core view:
Market review: last week (2022.2.28-3.4), the Shenwan mechanical equipment industry index rose by – 2.2%, the CSI 300 index rose by – 1.7%, and the machinery industry lost 0.5pct compared with the CSI 300 index. Shenwan 31 primary industries and 13 sectors rose, and the mechanical equipment industry ranked 25th, with the overall performance in the downstream.
Attention this week: the fifth session of the 13th National People’s Congress opened in Beijing on March 5. Premier Li Keqiang delivered a government work report. According to the government work report, the key investment opportunities related to the mechanical equipment industry are as follows: 1) enhance the core competitiveness of the manufacturing industry, strengthen the supply guarantee of raw materials and key parts, and focus on cultivating “specialized and special new” enterprises. On January 23, 2021, the Ministry of Finance and the Ministry of industry and information technology jointly issued the notice on supporting the high-quality development of “specialized, special and new” small and medium-sized enterprises. During the 14th Five Year Plan period, the central government will allocate a total of more than 10 billion yuan to guide local governments to improve their support policies and public service system, Support the high-quality development of more than 1000 national specialized and new “little giant” enterprises in three batches. The state focuses on supporting specialized, special and new enterprises and requires to strengthen the supply of raw materials and key parts, which is of great significance to make up for the shortcomings of China’s manufacturing industry. Mechanical equipment manufacturing enterprises account for a relatively high proportion of specialized and special new enterprises. It is suggested to pay attention to relevant investment opportunities. 2) We will implement the carbon summit action plan, promote low-carbon energy transformation, and improve the demand for new energy equipment. According to the government work report, we should continue to improve the ecological environment, promote green and low-carbon, implement the carbon peak action plan, and promote the transformation of low-carbon energy. Continue to support the consumption of new energy vehicles. The state continues to promote the double carbon goal, comprehensively promote the large-scale development of wind power generation, accelerate the construction of wind power and photovoltaic power generation bases, and requires the total installed capacity of wind power generation to reach more than 1.2 billion kw by 2030; The sales volume of new energy vehicles maintained high growth, and lithium battery enterprises seized market share and actively expanded production. We believe that with the support of national policies, the downstream demand for new energy equipment such as Fengguang lithium battery remains strong and has long-term growth space.
Key points of the industry:
Semiconductor equipment: it is estimated that the capital expenditure of the semiconductor industry will increase by 24% to US $190.4 billion in 2022, which is optimistic about the domestic substitution of semiconductor equipment. This year, China’s Fab production line construction is expected to still achieve rapid growth: Semiconductor Manufacturing International Corporation(688981) 2021 capital expenditure of $4.5 billion, 2022 capital expenditure of $5 billion is expected; Huahong semiconductor’s capital expenditure in 2021 was $939 million, and it continued to expand its 12 inch capacity in 22 years. It is expected that 22q4 will gradually release 30000 pieces of new capacity / month. According to semi’s prediction, global semiconductor equipment sales will reach US $103 billion and US $114 billion in 2021 and 2022, respectively, with a year-on-year increase of 44.7% and 9.7%. China has become the world’s largest semiconductor equipment market, and domestic semiconductor equipment has achieved key technological breakthroughs in many subdivided fields. With the increase of downstream capital expenditure and domestic substitution, China is optimistic about the investment opportunities of semiconductor equipment whose localization rate is expected to continue to improve.
Photovoltaic equipment: the development of wind power photovoltaic has made a good start. In January, the newly installed capacity of national scenery exceeded 12 million KW, and the photovoltaic demand has improved in 22 years. According to the data of China Photovoltaic Industry Association (CPIA), it is estimated that 75-90gw of new PV installed capacity will be added in China and 195240gw in the world this year. According to CPIA, the proportion of large-size silicon wafer (210mm + 182mm) has increased from 4.5% in 20 years to 45% in 21 years, and it is expected to reach 75% in 22 years; It is estimated that the proportion of n-type batteries will increase from 3% to 13.4% in 22 years. By the end of 22, the production capacity of TOPCON is expected to exceed 35gw and hjt is expected to exceed 13GW. In the past 22 years, silicon wafer large-size and n-type batteries accelerated. It is suggested to pay attention to the improvement of the demand for silicon wafer and battery chip equipment.
Lithium battery equipment
Aviation industry ranks second and fifth respectively. Sneresearch recently released the data of global power battery installed capacity in January 2022: the global power battery installed capacity in January 2022 was 25.7gwh, an increase of 87% year-on-year. The top 5 are Ningde, Byd Company Limited(002594) , Panasonic LG and China Innovation airlines. Power battery projects started intensively at the beginning of this year. According to the statistics of OFweek lithium power grid, Contemporary Amperex Technology Co.Limited(300750) , Byd Company Limited(002594) , China Innovation airlines, honeycomb energy, Gotion High-Tech Co.Ltd(002074) to 2025, the production capacity plans are 670, 600, 500, 600 and 300gwh respectively. The accelerated expansion of battery enterprises will bring sufficient orders to lithium battery equipment manufacturers this year and next. Under the accelerated promotion of energy storage and intensive commencement of battery projects, lithium battery equipment has fully benefited.
Risk factors: the capital expenditure of the semiconductor industry is lower than expected, the downstream demand is lower than expected, and the industry competition intensifies the risk.
