Key investment points
Offshore wind power will become an important driving force of the industry, and the large-scale trend will continue
Driven by continuous cost reduction, onshore wind power has become the lowest cost renewable energy in the world in 2020, lower than photovoltaic and hydropower. After the reform of the power market, the improvement of energy consumption capacity and the policy refund, wind power has entered the era of parity. China’s wind power industry is expected to enter the stage of rapid development driven by market demand. The development of the industry will show two characteristics: ① offshore wind power will become an important driving force for the development of the wind power industry: offshore wind power has significant advantages, and the installed CAGR of China’s offshore wind power will reach 44.70% from 2011 to 2020, Higher than the overall new installed capacity of wind power in the same period CAGR (12.77%). Under the background of returning, replenishing and rushing to install, China’s offshore wind power suddenly rose in 2021, with an annual new installed capacity of 16.90gw, a year-on-year increase of 452%. After the replenishment of offshore wind power in 2022, the era of parity will be opened. The planned new installed capacity of offshore wind power in major coastal provinces during the 14th Five Year Plan period will reach 73.45gw, about 8 times that of the 13th Five Year Plan period. Offshore wind power will become an important driving force for China’s wind power industry. ② The trend of large-scale wind power will continue: the core of whether the industry can break away from the policy and continue to expand rapidly after wind power parity is the economic benefits brought by cost reduction. As of September 2021, the average bidding price of 3S wind turbine has decreased by more than 40% compared with 2019m11. In wind power investment projects, the cost of wind turbine units accounts for more than 50%, which is the key point for the industry to continue to reduce costs. As one of the important means to reduce costs, large-scale has been verified in the new wind turbine installation structure and the main turbine factory shipment model structure in China over the years. Looking forward to the future, regardless of the demand for cost reduction from the market or comparing the average installed models in European developed countries, large-scale will still be the long-term development trend of China’s wind power industry.
Under the background of good prosperity of wind power in the future, pay attention to the parts with high value and high barriers
With the trend of large-scale wind turbine and the rapid development of offshore wind power in the era of superposition and parity, the prosperity of the industry is expected to continue. Pay attention to the links of high value and high barrier parts: ① Tower: the consumption of single MW tower of large-scale unit remains almost unchanged, which is a less damaged link under the trend of large-scale. In 2020, the market scale of China’s wind power tower is about 67.6 billion yuan, and the market scale is broad. Limited by the transportation radius, the market share of the tower industry is extremely scattered. In 2020, the total market share of China’s Cr4 is only about 31%. Forward looking capacity layout & mastering scarce wharf resources is the core competitive factor of tower enterprises. ② Bearing: high technical barriers and scarce value increase of single MW. In 2019, the market scale of China’s wind power bearing was about 10 billion yuan. The sum of local Luo shaft, tile shaft and Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) and other enterprises accounted for less than 10% of the global market, while the field of high-power main bearing is still in its infancy, and there is a large space for domestic substitution; ③ Flange: in 2020, the scale of China’s wind power flange market will exceed 12.7 billion yuan, and the localization will be basically realized. The large-scale flange puts forward higher requirements for the technical and financial strength of suppliers, and the market share will be further transferred to leading enterprises; ④ Submarine cable: in 2021, the scale of China’s wind power submarine cable market was about 15.6 billion yuan. The entry threshold of submarine cable was high, compulsory certification was required, and the verification cycle was long, resulting in high concentration of market share. In 2019, CR3 accounted for 93%. In addition, compared with land cables, submarine cables have stronger profitability. Under the far-reaching sea trend, the demand and price of submarine cables rise together, which is the best link of offshore wind power. ⑤ Pile foundation: high value. In 2020, the scale of China’s wind power pile foundation market was about 9.7 billion yuan, and the benchmark entry threshold of offshore wind power pile was higher than that of onshore wind power. At present, China’s offshore wind turbine foundation market is mainly concentrated in a few companies such as Haili wind power and Dajin Heavy Industry Co.Ltd(002487) and the share of leading enterprises has increased significantly.
Investment suggestions:
Attention: [ Jiangyin Hengrun Heavy Industries Co.Ltd(603985) ]: local wind power flange faucet, bearing & gear is expected to become the second growth curve; [ Luoyang Xinqianglian Slewing Bearings Co.Ltd(300850) ]: the forerunner of main bearing localization, and the raised investment project opens the bottleneck of production capacity; [ Dajin Heavy Industry Co.Ltd(002487) ]: global wind power tower leader, “two seas” strategy opens up growth space; [ Ficont Industry (Beijing) Co.Ltd(605305) ]: a supplier of aerial work equipment focusing on the wind power industry; [ Ningbo Orient Wires & Cables Co.Ltd(603606) ]: benefiting from the development of sea breeze industry, the submarine cable business has expanded rapidly; [Haili wind power]: Haifeng pile foundation / tower leader, and its market share continues to increase. In addition, it is suggested to pay attention to the leading industry segments such as [ Titan Wind Energy (Suzhou) Co.Ltd(002531) ], [ Riyue Heavy Industry Co.Ltd(603218) ], [ Jinlei Technology Co.Ltd(300443) ], [ Tongyu Heavy Industy Co.Ltd(300185) ], [ Jiangsu Lixing General Steel Ball Co.Ltd(300421) ], [ Zhuzhou Times New Material Technology Co.Ltd(600458) ], [ Sinoma Science & Technology Co.Ltd(002080) ].
Risk tips: the new installed capacity of wind power is less than expected, market competition intensifies, raw material prices rise, anti-dumping in overseas markets, etc.
