Vacuum interrupter faucet marches into energy storage and hydrogen energy. The company's original main business is vacuum interrupter and sealing products, and the revenue of arc interrupter products accounted for 72% of the total revenue in 2021. In 2020, the company started the mixed reform of hydrogen business, taking an important step in the development of hydrogen energy. In March 2021, Baoguang Zhizhong, a subsidiary engaged in power grid energy storage and frequency modulation, registered for industry and commerce, and the company officially entered into energy storage frequency modulation. In 2021, the company's revenue was 1 billion, yoy was + 12%, home net profit was 51 million, and yoy was + 10%.
The business of vacuum interrupter is growing steadily and its leading position is stable. According to the company's annual report in 2020, it is expected that the domestic vacuum interrupter market capacity will maintain a steady growth trend (330-4 million) during the 14th five-year Plan period, with an average annual compound growth rate of about 3.5%. The company's vacuum interrupter industry market share has been maintained at more than 30% for many years, and it is in the leading position in the domestic industry and ranks in the forefront of the world. The company has the advantages of technology and brand: the company has ploughed vacuum interrupter for more than 50 years, mastered a complete set of technology of vacuum interrupter from raw material production to whole pipe sealing and arrangement, and is one of the few domestic enterprises that process all the core parts independently. It was approved as the single champion demonstration enterprise of the Ministry of Industry and Information Technology in 2017. 2) cost control: by reducing costs in 2021, the company effectively hedged part of the impact of rising materials (the main raw materials of the vacuum interrupter are copper, silver and other rare and precious metals). Sales volume of arc extinguishing chamber products yoy+22% in 2021.
Baoguang marches into the new blue sea of energy storage and frequency modulation, or a catalyst for accelerating profit growth in the future. 1. The State Council issued the Action Plan for carbon Peak by 2030: by 2025, the installed capacity of the new type of energy storage will reach more than 3000 kilowatts. We estimate that the CAGR of the new type of energy storage will be 56% in 2020-2025, and the market space of energy storage and frequency modulation in the 14th five-year Plan will be 89.7 billion. 2. According to Ye Jianmin's "Southern Power Grid Battery Energy Storage Frequency Modulation Development opportunity and benefit Analysis", the dynamic cost recovery period of energy storage frequency modulation is 2.37 years, and the internal rate of return on capital is 63.81%. 3. Taking the Shaoguan project (9MW/4.5MWH energy storage) as an example, the monthly FM income belonging to Baoguang Zhong is 1.29 million yuan from May to July 2021. 4. The core advantage of Baoguangzhi is EMS system. Its EMS has two characteristics: 1) from the point of view of power grid, the design idea is from top to bottom, with advanced power auxiliary service functions such as AGC, AVC, power quality, broadband vibration suppression and so on; 2) strictly follow the design thinking and standards of power system, and have high security and fault tolerance.
Baoguang's original hydrogen business foundation is expected to benefit from hydrogen energy development in the future. According to the White Paper on China's hydrogen Energy and fuel Cell Industry 2019, the output value of hydrogen energy is about 300 billion yuan in 2019 and 12 trillion yuan by 2050. Hydrogen energy upstream is hydrogen production, mid-stream storage and transportation, and downstream is terminal consumption.
In 2019, the sales revenue of precision ceramic gas business (subsidiaries have a number of qualifications engaged in the production and sales of hydrogen and other gas business) was 28.23 million yuan, of which hydrogen revenue was 7.5 million yuan. The company has the basic conditions to cut into the fast track of hydrogen energy industry development. In the future, the company will develop hydrogen energy and is committed to creating a professional integrated solution provider for cross-regional hydrogen energy production, storage, transportation and application.
Investment advice and profit forecast. We estimate that the 22-24 year net return profit of the company will be 0.79, 0.06 and 0.41 million, respectively, and the corresponding EPS will be 0.24, 0.32 and 0.43 respectively. Comparable company PE in 2022 is 50 times, we give 2022 50-53 times PE valuation range, the corresponding reasonable value range is 11.90-12.61 yuan. For the first time, it is given an investment rating of "better than the market".
Risk hint: commodity prices rose less than expected, energy storage projects expanded and earnings fell short of expectations.
