Event:
On January 11, according to China Energy News, during the 14th Five Year Plan period, the State Grid planned to build the "24 AC and 14 DC" UHV project, involving more than 30000 kilometers of lines, 340 million KVA of substation and converter capacity, and a total investment of 380 billion yuan. In 2022, the State Grid plans to start 13 UHV lines of "10 AC and 3 DC".
Comments:
The contradiction between power supply and demand increases the demand for UHV power grid, and policies promote power grid enterprises to accelerate the construction of UHV power grid. The contradiction between power supply and demand increases the demand for UHV power grid. On the one hand, the demand for long-distance transmission of new energy power in the West continues to increase, and the demand for UHV DC construction continues to increase. On the other hand, the power supply shortage in some eastern regions is serious. Accelerating the construction of UHV AC network is conducive to alleviating the power supply shortage and promoting the consumption of new energy. Recently, the National Energy Administration issued the implementation opinions on deepening the reform of "decentralized management and service" in the energy field and optimizing the business environment, which proposed that power grid enterprises should do a good job in accessing power grid and power grid interconnection services for projects such as new energy, distributed energy, new energy storage, microgrid and incremental distribution network. The implementation opinions supported power grid enterprises to speed up power grid construction, Promote power grid enterprises to accelerate the construction of ultra-high voltage power grid to help new energy consumption.
The planning and construction of the State Grid in the 14th five year plan is expected to increase the demand for UHV equipment. During the 14th Five Year Plan period, the State Grid planned to build the "24 AC and 14 DC" UHV project, involving more than 30000 kilometers of lines, 340 million KVA transformation capacity and a total investment of 380 billion yuan. In 2022, the State Grid plans to start 13 UHV lines of "10 AC and 3 DC". During the 13th Five Year Plan period, the State Grid has put into operation the "13 AC and 12 DC" UHV project. During the 14th Five Year Plan period, the investment and construction of the State Grid UHV power grid has further increased, and the construction of AC UHV has significantly accelerated, and the demand for UHV equipment is expected to increase.
The market pattern of UHV equipment industry is relatively stable. Power grid enterprises usually need to purchase converter valves, converter transformers, AC transformers, GIS and other products. Suppliers mainly include Nari Technology Co.Ltd(600406) , Tbea Co.Ltd(600089) , Xj Electric Co.Ltd(000400) , Henan Pinggao Electric Co.Ltd(600312) , China Xd Electric Co.Ltd(601179) and Baoding Tianwei Baobian Electric Co.Ltd(600550) . The core technologies of the above enterprises have competitive advantages, have a high market share, and the market pattern of UHV equipment industry is relatively stable.
Investment suggestion: as the market structure of UHV equipment industry is relatively stable, it is recommended to pay attention to key enterprises Nari Technology Co.Ltd(600406) (600406), Xj Electric Co.Ltd(000400) (000400), Tbea Co.Ltd(600089) (600089), Henan Pinggao Electric Co.Ltd(600312) (600312), China Xd Electric Co.Ltd(601179) (601179) and Baoding Tianwei Baobian Electric Co.Ltd(600550) (600550) with leading core technology industry and high market share.
Risk warning: policy promotion is not as expected; Risk of higher than expected price rise of upstream raw materials; The investment and construction of power grid is less than the expected risk, etc.
