New Energy "Attractive": Wind Power, Warring States, and Nuclear Power Seeking Little Giants (1)

New energy dreams shine into reality.

According to China's "new energy industry development plan", from 2011 to 2020, cumulative direct investment in new energy fields will reach 5 trillion yuan.

The plan includes not only the development and utilization of nuclear power, wind power, solar energy and biomass energy, but also the upgrading of traditional energy sources such as clean coal, smart grid, distributed energy, and new automotive energy.

The specific goal is to achieve the goal of 15% non-fossil energy consumption by 2020, at least 80 million kilowatts of nuclear power, at least 300 million kilowatts of hydropower capacity, and 240 million for other biomass energy. Tons of standard coal or more.

For capital markets, grand plans are gradually turning into attractive investment opportunities.

However, risks and opportunities coexist. When new energy sources become the “story of the story” in the capital market, it is even more necessary to go to the falsification of the truth.

Wind power "Warring States situation"

The wind power that had once gone all the way had arrived when the bayonet saw red.

On September 10, 2010, the tender for the first round of 1,000MW offshore wind power concession project in China was opened in Beijing, and the state-owned enterprise became the biggest winner.

The tender results showed that Datang New Energy Co., Ltd. obtained the Binhai project, China Power Investment Co., Ltd. won the Sheyang project, Shandong Luneng Group Co., Ltd. won the Dongtai project, and Longyuan Power Group Co., Ltd. won the Dafeng project.

The bid price is as low as 0.62-0.74 yuan / kWh, this price is far lower than previously expected, and based on this price calculation, the winning company is likely to fall into a loss.

Central enterprises do not hesitate to low-cost enclosures, which are largely due to the policy of renewable energy quotas. Power generation companies that have launched thermal power generation units must first develop a large number of renewable energy installations.

On the other hand, a Shanghai-based PE fund-based industry research manager told reporters that one-third of wind power is idle.

“The electricity sent by wind energy will impact the grid as soon as it goes up. In remote areas, the load is not very large and the grid can accept it. But like wind power generation near Shanghai, this problem must be solved.”

The source said, "The phase of rapid growth of wind power has passed. The compound growth in the first five years is 130%. From now on, in the next 5-10 years, wind power will enter a period of steady growth. The annual installed capacity will be only 10 million kilowatts. The production capacity of wind power equipment is 15 million kilowatts, and the overall surplus is surplus."

In the offshore wind tendering results, three equipment manufacturers divided equipment orders, among which Sinovel won the Binhai (300 MW) and Sheyang (300 MW) projects, and Goldwind won the Dafeng Project (200 MW), Shanghai Electric won the Dongtai project (200 MW).

However, even the industry leader, Goldwind Technology, has to face the pressure of the overall growth slowdown.

According to the calculation of Guojin Securities, the annual orders of Jinfeng Technology are expected to reach 4000MW. "Considering the new orders for 2915 MW in 2009 and 1451 MW in 2008, the year-on-year growth rate of new orders will slow from 90 percent last year to 37 percent. This also reflects the overall industry-wide growth rate slowdown."

Goldwind semi-annual report shows that the company's performance continues to grow rapidly, achieving an operating profit of 960 million yuan, an increase of 34.4%; a net profit of 810 million yuan, an increase of 45.2%.

However, in the view of the above-mentioned PE, wind power equipment manufacturers face greater pressure. And some giants are more stable and less explosive. "Like Dongfang Electric and Shanghai Electric, they both do nuclear power and wind power, and they have no explosive power in performance."

However, structural opportunities still exist. "Companies like hubs, shafts, and converters have relatively few investment opportunities."

For example, the landing of A shares in Hangzhou on October 11th, the part of the raised funds, is the annual output of 2000 sets of key components of wind power growth capacity expansion project. The above project plans to invest 386 million yuan, which is also the largest investment in the company's four fundraising projects.

In addition, the current production capacity of wind gears for Hangfang Gear is only 350 units. Although it does not contribute much to the company's performance, it is the business with the highest gross profit margin, reaching 25%.

The fundraising project will build a new capacity of 2,000 sets of wind power transmission gearboxes, which will be put into production in 2012. The wind power business will become the company's new profit growth point, and it is expected to grow by 30%-40% annually after 2 years.

The other key component converter is seen as a mineral deposit that has not yet been excavated in the field of wind power equipment manufacturing. At present, the wind power converter is the only part of the entire wind power system that has not yet achieved localization. At present, the market share of foreign brands in China is as high as 95%.

According to the calculation of Guojin Securities, the average annual market capacity of converters in China is about RMB 5.2 billion.

On the other hand, the field of converters in this equipment has also been tilted by policies.

According to the Interim Measures for the Management of Special Funds for the Industrialization of Wind Power Equipment in 2008, Chinese-funded and Chinese-funded holding companies engaged in the production and manufacture of wind power equipment in China will be supported by industrialized funds. As for the amount of subsidies for key component manufacturers, it is stipulated that the focus should be on converters and bearing companies.

Converters account for about 15% of the cost of wind power equipment.

Current listed companies with converter production capabilities include Rongxin, Hyde Controls and Kyushu Electric.

Among them, Rongxin Co., Ltd. cooperates with Goldwind Technology to develop 1.5MW converters, which have passed the test of Jinfeng Technology. Guojin Securities stated in its report that "it is expected that R&D will be completed this year and will contribute 50 million yuan in revenue in 2011."

Another Hyder company involved in this area has its wind power converter R&D team from Emerson, which is one of the few major converter manufacturers in the international market. At present, Hyde Control has completed the development of 1.5MW and 2MW double-fed wind power converters, and the prototype is in the test phase of the suspended network.