Smart grid, born towards the sun

State Grid’s three-stage smart grid is basically completed, and a new round of industrial revolution will start

The smart grid is the foundation of the next-generation industrial revolution. The National Development and Reform Commission clearly pointed out in 2015 that the smart grid is “on the basis of the traditional power system, through the integration of new energy, new materials, new equipment and advanced sensing technology, information technology, control technology, energy storage technology and other new technologies to form New generation power system”.

The three-phase plan shapes the embryonic form of the smart grid. In May 2009, the State Grid proposed a smart grid plan, with the intention of building a unified and strong smart grid with the characteristics of informatization, automation, and interaction. The plan is divided into three phases, 2009-2010 is the planning pilot phase, 2011-2015 is the comprehensive construction phase, and 2016-2020 is the leading and upgrading phase. In the past ten years, my country’s urban and rural voltage qualification rate and average annual household outage time have been significantly improved.

In terms of equipment, taking substations as an example, in 2010, there were only less than 80 smart substations built and under construction with a voltage level of 110 (66) kV and above on the State Grid, accounting for 0.3% of the total number of substations. During the “Thirteenth Five-Year Plan” period, State Grid plans to build 7,700 smart substations and make intelligent transformations to the original substations, with an intelligent transformation rate of 100%. By 2030, my country will fully build a smart grid, and the power grid technology, equipment, and resource allocation capabilities must reach the world’s first-class level, and smart grid equipment will soon increase in volume.

In the “14th Five-Year Plan” smart grid investment is expanding, how to look at the future construction direction?

Building a modern new energy system has become the main theme of the next stage. In March 2021, the “Outline of the Fourteenth Five-Year Plan for the National Economic and Social Development of the People’s Republic of China and the Long-Term Goals for 2035” (hereinafter referred to as the “Outline”) was released. Compared with the “13th Five-Year Plan”, the “Outline” The Outline describes in detail the key points of smart grid construction: 1. Intelligent transformation of infrastructure and smart micro-grid construction to improve power system complementarity and smart regulation capabilities; 2. Improve clean energy consumption and storage capabilities, and move to remote areas Transmission and distribution capacity; 3. Pumped storage power station construction and large-scale application of new energy storage technology. Under the guidance of the “Outline”, many provinces this year have formulated their own “14th Five-Year Plan” smart grid-related construction policies in accordance with the requirements of the “Outline”.

The “Fourteenth Five-Year Plan” and the “Outline” are good for smart grid-related targets. Since the release of the “Outline” on March 12 (November 25), the Wind Smart Grid Index has increased by 54.8%, which is 51 percentage points higher than the 3.8% increase in the Shanghai Stock Exchange Index during the same period.

The “14th Five-Year Plan” power grid investment will be further increased, and the planned total investment is close to 3 trillion yuan. The State Grid plans to invest 350 billion U.S. dollars (approximately 2.24 trillion yuan) in the “14th Five-Year Plan”, and China Southern Power Grid plans to invest about 670 billion yuan, with a total investment of nearly 3 trillion yuan. According to the report of “Electrical Equipment Strategy: Grid Investment Rebound under New Power System, Optimistic about Structural Investment Opportunities” by the new group of China Gold Power, the focus of investment is on weak areas that are closely related to changes in the power system, such as distribution networks and grid informatization. , Pumping water and energy storage, etc.

We believe that the size of the smart grid market will be around 360 billion yuan in the next five years. The Fourteenth Five-Year Plan of China Southern Power Grid clarified that the main directions of investment of 670 billion yuan include the intelligentization and digitization of power grids, UHV construction and flexible transmission technology, energy storage and intelligent distribution network, all of which are important components of smart grids. . In addition, although State Grid has not yet announced its “14th Five-Year” strategic plan, it has repeatedly mentioned power grid transformation and upgrading plans similar to those in the South. We believe that during the “14th Five-Year Plan” period, the proportion of smart grid investment will increase, and the smart grid market size will be around 360 billion yuan based on 12%.

Investment in power grids increased during the 14th Five-Year Plan period, and the distribution network was a key construction link. The investment in the “14th Five-Year Plan” of China Southern Power Grid is estimated to be 670 billion yuan, an increase of more than 20% compared to the “13th Five-Year Plan”. Among them, the distribution network investment is 320 billion yuan, accounting for nearly half of the total. According to the report of “Electrical Equipment Strategy: Investment in Grid under New Power System, Optimistic about Structural Investment Opportunities” report by the new group of CICC, the proportion of distribution network investment in power grid investment during the “14th Five-Year Plan” period is expected to increase to more than 60%, and the total investment Compared with the “13th Five-Year Plan” period, the average annual investment is expected to reach 330 billion yuan.

From the perspective of automation, find the golden growth track

Midstream benefited from automation investment with outstanding profitability

The compound growth rate of my country’s power automation market in the past five years is expected to reach 15%. Electric power automation refers to the realization of excessively long automatic control management of power generation, transformation, distribution, and electricity consumption through power secondary equipment. It mainly includes power station automation, substation automation, distribution network automation, dispatch automation, and operation and maintenance. Automation, etc. MARKETSANDMARKETS predicts that the global smart grid market will grow from US$43.1 billion in 2021 to US$103.4 billion in 2026, with a compound annual growth rate of 19.1% during the forecast period. According to our forecast, my country’s power automation market will reach 189.2 billion yuan in 2024, and my country’s smart grid investment compound growth rate will reach at least 15%.

The upstream competition component of power automation, the high concentration in the midstream, and the downstream customers are mainly power grids. Power automation upstream mainly refers to companies that provide components or software support for automation equipment; power automation midstream mainly refers to specific implementation links. Most midstream companies directly participate in power grid bidding projects. According to the classification of power automation implementation links, they can be divided into power generation, power transformation, Power distribution, dispatching, operation and maintenance; the downstream of power automation mainly refers to the power application end, including power grid companies such as State Grid and power consumers such as PetroChina (4.920, 0.03, 0.61%) and Sinopec (4.200, 0.01, 0.24%).

►Upstream of the power automation industry chain: a wide range of fields and full competition. The upstream industries of power automation include the steel industry, software manufacturing, mechanical processing manufacturing and Electronic component manufacturing. Due to the early construction of my country’s power grid, the supply of raw materials and components in the upstream of the industry has basically achieved localization and is in a state of complete competition.

►Midstream of the power automation industry chain: high concentration, with state-owned enterprises as the main participants. The midstream industry has a high degree of concentration. The main participants are companies with state-owned assets, such as Guodian NARI (42.170, 0.11, 0.26%) and Xu Ji Electric (27.080, 0.17, 0.63%). There are private enterprises in subdivisions and regions. Enter.

► Downstream of the power automation industry chain: the power grid is the main customer. The main downstream application scenario is power grid investment. In addition to the power grid, because the installation of power distribution automation systems can improve power grid efficiency, marine, oil and gas, and mining and mining companies have increased demand for power distribution automation systems.

The profitability of the power automation industry presents a convex curve. The upstream manufacturers provide general-purpose parts and components, and there are many industry participants, so the profits are relatively small; the midstream manufacturers are power automation equipment providers, which directly undertake power grid projects, have technical and customer barriers, and have high profit levels; while the downstream is mainly the State Grid , China Southern Power Grid, China Hydropower and other national power suppliers, with outstanding public service attributes.

Power automation equipment companies, with obvious industry characteristics

Affected by economic development, the distribution of my country’s power automation market is uneven. In 2018, the power investment CR3 accounted for 55.29% of the market share, and CR10 accounted for 87.98% of the market share. The market concentration is high. Among them, Jiangsu Province ranked first with an investment of 32.05 billion yuan, while Shandong, Zhejiang, and Guangdong ranked second. echelon. The top 10 companies investing in power automation are located in economically developed provinces in eastern my country, and the distribution of power automation is affected by regional economic development. At the same time, provinces with more investment in power automation are more conducive to incubating leading companies in the industry. For example, Jiangsu Province hatches Guodian Nanrui, Guodian Nanzi (10.890, 0.09, 0.83%), Yijiahe (76.560, -2.11, -2.68) %), Shandong Province incubated companies such as State Grid Intelligence, Dongfang Electronics (7.470, -0.24, -3.11%), and Jicheng Electronics (7.520, 0.14, 1.90%).

Note: It is related to the degree of economic development of the region, and the regional pattern is relatively stable. We believe that the data in 2018 still has certain demonstrative reference significance

Electric power automation equipment companies as a whole show three characteristics: steady growth, healthy cash flow and seasonal fluctuations in income.

►Stable growth of the track: Benefiting from the investment in power grid automation, the main participating companies’ revenue CAGR from 2018 to 2020 is concentrated at 10%-20%, with an average CAGR of 22%. The track growth is stable and the development is stable.

► Strong repayment ability and healthy cash flow: As the current grid automation project is dominated by the government, the income will be settled by the grid after the project is successfully accepted. Therefore, the certainty of fund return is high, and the proportion of bad debts is low. It mainly participates in the average collection of companies The current ratio is 92%.

► Revenue has seasonal characteristics: the purchase of power grid equipment for downstream users in the power automation industry complies with a strict capital management system. The capital management plan is generally issued in March to April, and the bidding is generally arranged in the middle of the year. Therefore, sales orders began to increase significantly in the second half of the year. Revenue recognition is generally concentrated in the fourth quarter. Taking Yijiahe as an example, in 2019/2020, the company’s fourth quarter revenue accounted for 49.02%/47.61%, respectively.

Recommended subdivision track small and beautiful company

Small but beautiful companies bring investment opportunities. At present, the market pays more attention to leading power automation companies, such as Guodian Nanrui and Xu Ji Electric, but there are also investment opportunities in subdivided tracks. We selected two tracks with strong profitability, high revenue flexibility, market growth space and technical barriers, namely distribution automation and electric robots (10.280, 0.06, 0.59%).

► Distribution automation: The construction of the distribution network for smart grids during the 14th Five-Year Plan will become a key construction link, and investment will account for nearly half. We predict that the distribution automation market will be about 19.4 billion yuan in 2024, and the CAGR will reach 20% in the next three years. Tilting industry investment has brought new opportunities for power distribution equipment, and outstanding targets have emerged in the power distribution equipment industry in recent years.

►Power robots: There is a definite machine substitution trend in the field of grid operation and maintenance. We predict that the market size of powered robots in 2025 will be about 4.02 billion yuan, with a five-year CAGR of 28%.

Distribution Automation: The Pioneer of the Smart Grid Wave

We estimate that the distribution automation market will be about 11.7 billion yuan in 2024, with a CAGR of 15% in the past three years

The distribution automation system consists of a main station, sub-stations and terminals. The specific assumptions are as follows: 1) According to the National Energy Administration’s goal of distribution automation coverage, we assume that the number of main stations and sub-stations will continue to expand at a rate of 15% in the next three years; 2) According to the report “Distribution Network: Key Links of Investment Overweight, Industry’s Prosperity” released by the new group of China Gold Power, we judge that the penetration rate of distribution transformer terminals (TTU) is low and demand is expected to continue to rise; and the failure indicator (FLD) Belonging to traditional equipment, the penetration rate of terminal equipment feeder terminal (FTU) and station terminal (DTU) has been high, and the demand for equipment purchases in the coming years will be limited; 3) The market is full of competition. A slight downward trend. In summary, we estimate that the market size of my country’s master station/substation/terminal/fault indicator in 2024 will be 52.5/26.3/36.9/140 million yuan, respectively.

Note: According to the National Energy Administration’s target of distribution automation coverage, 2017, 2018 and 2019 are 65%/78%/90% respectively. It can be calculated that the distribution automation investment in 2018 and 2019 will increase by 20%/15% respectively; The data of FTU/DTU/TTU winning bid comes from the report of “Distribution Network: Investment Overweight Key Link, Industry Prosperity Time” by the new group of China Gold Power

State-owned enterprises dominate the oligarchy in the main and sub-station links, and the terminal links are scattered. Power distribution is the hub of energy production, conversion, and consumption, and a key link for investment increase. The main power distribution station system has high technical barriers and high market concentration. Participating companies are mainly state-owned. According to the report issued by the new group of CICC, “Distribution Network: Key Links of Investment Overweight, Industry Prosperity Is Time”, as of October 2021 On the 31st, the market share was calculated by the number of bidding packages, and Guodian Nari’s market accounted for as much as 50%; most of the electronic distribution stations are bundled with the main station, and the competition pattern is similar; the distribution terminal is relatively low in technical barriers and the competition pattern is more scattered . According to the calculation of the bidding situation of the distribution network agreement, as of October 31, 2021, the CR10 is only 37%.

Power robot: technology upgrade, penetration rate urgently needs to be improved

The penetration rate of inspection & operation robots opens, and the competitive landscape is optimized

The current national penetration rate is less than 10%, and the total market size in the next five years will exceed 20 billion yuan. Transmission line inspection, substation inspection, distribution station inspection, and tunnel inspection are the core application scenarios of power intelligent inspection robots. The mainstream inspection scenes are outdoor substations and indoor power distribution rooms. According to the “Electrical Equipment Strategy: Investment in Grid under New Power Systems, Optimistic about Structural Investment Opportunities” report of the new group of China Gold Power, we assume that: 1) The current number of 110kV and above substations in China exceeds 35,000. According to my country’s substations at the end of 2017 In terms of quantity, the configuration ratio is “one machine, one station” or “two machines, one station”, and it can be estimated that there are about 37,000 outdoor robots in my country; 2) There are about 300 prefecture-level cities in my country, and each prefecture-level city is about 1,000 There are about 300,000 power distribution stations in total. The average power distribution station/substation is one machine, two stations/one machine, one station, and it can be estimated that the total demand for indoor robots in my country is about 186,000; Under the circumstances, in 2025, the penetration rate of outdoor inspection robots nationwide can be increased to 20%/30%/40%, and the penetration rate of indoor inspection robots can be increased to 20%/25%/30%; 4) With product technology upgrade and competition Intensified, the price of single robots continued to decline slightly. In summary, we respectively assume that under pessimistic/neutral/optimistic situations, the nationwide inspection robot market size in 2025 will be approximately 195.8/281.5/36.83 billion yuan.

In the context of dangerous operations, inspection robots are further upgraded to live-operating robots. Line equipment inspection problems should be carried out in time for high-voltage live work, and manual live work has certain safety hazards and the work efficiency is not high. The demand for live operation robots based on the inspection function is considerable. At present, the powered operation robot has developed to the third-generation fully autonomous mode, and the technical difficulty is gradually increasing.

The current penetration rate is only 3%, and the market space in the next five years is nearly 6 billion yuan. At present, the main functions of the live operation robot include replacing manual high-voltage group modeling and wire stripping, etc. The main operation scenes are the live group and switch room. Considering only the existing live-operating robots, according to the “Electrical Equipment Strategy: Grid Investment in the New Power System Under the New Power System, and Optimistic about Structural Investment Opportunities”, according to the new group of CICC Power It is estimated that there will be about 200 units by the end of 2020; 2) Each prefecture-level administrative district has an average of 20 live working teams, and 334 prefecture-level administrative districts have a total of about 7000 working teams; 3) Each working team is equipped with a live working robot. The penetration rate is only 3%. In summary, we respectively assume that under pessimistic/neutral/optimistic situations, the penetration rate of powered robots nationwide in 2025 can increase to 25%/35%/45%, which corresponds to the total market space of 41.6/59.8 in 21-25. 7.83 billion yuan.

Backed by large provinces with power grids, regional leading forces continue to increase. In 2013, State Grid included intelligent substation inspection robots in the bidding catalog. The demand for inspection robots has gradually increased. At present, mainstream market participants include Yi Jiahe, Shenhao Technology (41.300, -0.70, -1.67%), State Grid Intelligence, etc. The three companies are gradually extending their applications for live-operating robots, but Yi Jiahe started the earliest. By 2021, it has already formed an order of 300 million yuan for outdoor live-operating robots to be delivered. Currently, only Yi Jiahe has been involved in indoor live-operating robots. In 2020, Yi Jiahe, State Grid Intelligence, and Shenhao Technology’s electric robot revenue will be 910 million yuan, 390 million yuan, and 350 million yuan respectively. The three companies have established good cooperative relations with the power grid system in Jiangsu, Shandong, and Zhejiang. The three provinces have increased their investment in smart power grids to become a leader in power robots.

risk warning

1) Grid investment is not as good as expected. The progress of power grid automation development is greatly affected by the capital expenditure plans of the State Grid and China Southern Power Grid. For example, during the 14th Five-Year Plan period, the investment progress of the State Grid and China Southern Power Grid is less than expected, and the demand for related automation equipment may be significantly weakened, and the stock market competition may become more intense.

2) The penetration rate of automation is lower than the expected risk. Automation penetration is a slow and spontaneous penetration process. For example, the weakening of policy support during power grid construction, or the failure of the automation transformation effect as expected, will slow down the penetration of automation and directly affect the growth of the demand for related equipment providers.

The Links:   RM500UZ-2H FP75R06KE3