On September 29th, the first UHV AC project in Southwest my country - State Grid Co., Ltd. Sichuan-Chongqing 1000 kV UHV AC project officially started. According to industry experts, this marks that UHV is about to enter the peak period of construction, and the industry is expected to usher in a golden period of development. As one of the seven major new infrastructure construction fields, UHV is another major national construction project and a key industry related to major national strategies and national security. The performance of related companies in the A-share market has grown explosively, and the net profits of companies such as Pinggao Electric, Zhongtian Technology, Yongfu, Zhonghuan Equipment, and TBEA have doubled year-on-year.
UHV construction has significantly increased volume
At the current point in time, UHV can play a role in stabilizing growth on the one hand, and on the other hand, it plays an important role in carbon neutralization . It is reported that during the 14th Five-Year Plan period, State Grid plans to construct UHV projects of "24 interchanges and 14 direct connections", involving more than 30,000 kilometers of lines, a substation conversion capacity of 340 million kVA, and a total investment of 380 billion yuan. In 2022, the State Grid plans to start construction of "10 exchanges and 3 direct lines". On August 3, the State Grid Corporation of China announced that it will start the construction of the "Four Interchanges and Four Straights" UHV projects within the year, and accelerate the preparatory work of UHV projects such as "One Interchange and Five Straights", and strive for early approval and early start of construction.
The Sichuan-Chongqing 1000kV UHV AC project mentioned above is the longest line in the four-way and four-straight lines planned to start construction in the second half of the year. This project is the starting project for the construction of the southwest UHV AC backbone grid, with a total investment of 28.8 billion yuan , it is planned to be put into operation before the summer peak in 2025.
The UHV AC concept stocks in the A-share market mainly include Pinggao Electric, TBEA, Zhongtian Technology, China Xidian , and so on. Among them, Pinggao Electric has a market share of 47% in GIS equipment. According to the calculation of each AC UHV GIS equipment accounting for 10%, it is expected that Pinggao Electric is expected to gain a market share of over 1.3 billion yuan in this Sichuan-Chongqing UHV AC project. It is understood that the gross profit margin of GIS is as high as 30%, and the net profit margin is also maintained at around 20%. This means that in less than 3 years, Pinggao Electric is expected to add 260 million yuan in net profit.
Haitong Securities believes that with the proposal of the "dual carbon" goal and the construction of a new power system, in order to match the large proportion of access to new energy, the construction of UHV will be a continuous process and one of the key investment directions of the power grid. The performance growth of core equipment companies continued to drive.
The net profit of several companies doubled
Thanks to the rapid development of the new power system with new energy as the main body, the performance of the UHV segment in the first half of the year showed a trend of rapid growth as a whole. According to data treasure statistics, the net profit of Pinggao Electric, Zhongtian Technology, Yongfu Co., Ltd., Zhonghuan Equipment, TBEA and other companies doubled year-on-year. Among them, Pinggao Electric's UHV concept is the most pure. In the recent survey summary, Pinggao Electric pointed out that during the reporting period, it was confirmed that five intervals of 1000kV GIS, such as the new construction of Wuhan substation, and five intervals of 750kV GIS, such as the Xining North expansion project.
public information shows that Pinggao Electric is the first high-tech enterprise in the national high-voltage switch industry that has passed the “Double High” certification of the Chinese Academy of Sciences and the Ministry of Science and Technology. R&D and manufacturing base, and a pillar enterprise of major technical equipment in the national electrical industry.
The profitability of some listed companies has improved significantly, and the gross profit margin of semi-annual reports such as Pinggao Electric, TBEA, and Zhongtian Technology has increased year-on-year. Specifically, the gross profit margin of TBEA's semi-annual report increased by more than 13 percentage points compared with the same period last year, ranking first, Zhongtian Technology ranked second with an increase of 6.56 percentage points, and Pinggao Electric ranked third with an increase of nearly 6 percentage points.
The substantial increase in the gross profit margin of Pinggao Electric is mainly due to a number of measures to reduce costs and increase efficiency. One is design optimization to reduce product cost. The company reduces product manufacturing costs through measures such as lean design, process optimization, and technological project engineering applications; the second is lean management and control to reduce manufacturing costs. The company organizes the establishment of lean production groups at all levelsOrganize, formulate a lean production implementation plan, clarify the implementation content and improvement goals of lean production, and guide all employees to participate in the promotion of lean production; the third is to take multiple measures to reduce procurement costs. In order to maintain the stability of the supply chain, the company organizes various units to flexibly adjust procurement strategies, develop and reserve supplier resources, and cooperate with suppliers to offset the adverse impact of rising raw materials.
Pinggao Electric has the highest growth rate in the next two years.
UHV theme is one of the most growing sectors. According to the data, the UHV agency unanimously predicted that the compound growth rate of net profit for two years was close to 43%, ranking 28th among the 100 concept sectors in terms of growth.
Some stocks have excellent growth. Among the UHV concept stocks rated by more than two institutions, Pinggao Electric, Jinpan Technology, Far East Co., Ltd., Trina Solar , Xinguang, Yongfu Co., Ltd. and other individual stock institutions unanimously predict that the average growth rate of net profit in next year and 2024 will be the same. More than 50%, of which Pinggao Electric ranks first with more than 61%. According to the unanimous forecast by institutions of this year's price-earnings ratio and the average growth rate of net profit in the next two years, Far East's forecast PEG is 0.22, which is the most undervalued, and Pinggao Electric's forecast PEG is 0.54.
Haitong Securities' recent research report pointed out that Pinggao Electric's UHV products continue to lead the market in market share, and it is expected to benefit deeply from the continuous advancement of UHV construction. At present, 800kV GIS products have become the company's flagship products, with the largest market share. (Data treasure Chen Jiannan)
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