occurrences
On November 25, the National Energy Administration issued the “Basic Rules for the Electricity Spot Market (Draft for Comments)” and the “Measures for the Supervision of the Electric Power Spot Market (Draft for Comments)” to solicit comments from the public.
The “Rules” state that the participation of new energy sources in the electricity market is promoted in a steady and orderly manner, and that they are well connected with existing new energy security policies. Promote emerging market players such as energy storage, distributed power generation, load aggregators, virtual power plants, and new energy microgrids to participate in the transaction.
reviews
In terms of new energy generation, the electricity market is being built to promote the participation of new energy sources in the electricity market in an orderly manner, and the business models of distributed power generation and new energy microgrids have become more clear. Based on the BIM platform, the company built an integrated industrial Internet platform for new energy design, construction, operation and maintenance. In terms of software platforms, the company has developed products such as 3D photovoltaic design software and 3D wind farm design software for new energy design. In terms of design consulting, the company can develop business in new energy such as photovoltaics and wind power, smart microgrids, etc. In terms of distributed photovoltaics, the company has laid out a full-process technical service system for photovoltaic planning and consultation, engineering design, asset operation and maintenance, and information technology products throughout the county, and is actively cooperating with large energy groups and new energy equipment manufacturers. The company has benefited from the accelerated release of industry demand, and the power generation side business is expected to grow rapidly.
In terms of energy storage, the introduction of this policy is expected to accelerate the implementation of the independent energy storage business model across the country and drive the development of related industrial chains, including the design process. The company undertakes consulting and design work for a large number of energy storage projects such as wind power and photovoltaic supporting energy storage projects in Shandong, Guangdong, Ningxia, Anhui and other parts of the country. Among them, the 200,000 kilowatt (800,000 kilowatt-hours) supporting energy storage project in Shache County of Xinhua Hydropower is currently one of the largest capacity energy storage projects already under construction in China. The company expects energy storage-related order revenue to exceed 20 million yuan by the end of this year. In the future, with the gradual clarification of the energy storage business model, demand on the design side may be released at an accelerated pace. With the advantages of products and services on the power generation side of new energy generation, the company is expected to benefit from the increase in demand for supporting energy storage construction driven by increased energy storage utilization. The energy storage sector is expected to contribute to business growth.
In terms of electricity distribution and electricity big data, the introduction of the new policy will further promote the commercialization and marketization process of electricity. Electricity spot trading will accelerate the release of demand for electricity consumption load analysis and forecast analysis on the user side, and the supporting role of electricity consumption big data will be highlighted. The company currently has SaaS products and services such as cloud power sales platforms and power distribution platforms, which can effectively support electricity sales entities in electricity purchases, electricity sales, value-added services and customer service, as well as provide integrated solutions for the development of core businesses such as power supply, distribution network management, electricity consumption collection, production management, and marketing management of power distribution entities. The company is expected to benefit from the continuous increase in demand for smart electricity on the user side driven by the electricity spot market.
In terms of green construction and digital operation and maintenance of big data centers, the company is actively exploring the new energy and data center markets. The Zhonglongyun (Zhuozhou) Intelligent Digital Industrial Park project undertaken by the company has now completed the researchable design stage. The company actively expands other green and low-carbon data centers “power+computing power”
As for the project, orders related to data centers are expected to reach around 300 million yuan by the end of this year. With the advancement of the power spot market policy this time, data centers are an important scenario on the electricity consumption side. Demand for power design and digital operation and maintenance will be released at an accelerated pace, and the company is expected to benefit.
In terms of virtual power plants, policies have been introduced to promote virtual power plants and other emerging market players to participate in transactions, and the value of virtual power plants has been recognized. The company actively lays out technologies related to virtual power plant scenarios such as park power distribution systems, user side load forecasting, scheduling and switching. In the future, it is expected to participate in the operation and scheduling of small virtual power plant scenarios, such as distributed microgrids and commercial buildings in the park, to provide users with comprehensive solutions integrating energy supply, energy operation, and energy informatization. The company's independent BIM platform can provide integrated digital analysis, display, and scheduling simulation, simulation, and operation support for virtual power plants. At the same time, it can actively promote the implementation and application promotion of business scenarios such as power distribution to support virtual power plants in industrial parks.
Investment advice
With the introduction of new electricity regulations, business models in the fields of new energy microgrids, distributed power generation, and energy storage are expected to accelerate. As a leader in domestic power BIM software, the company is expected to experience continued growth in the context of a high boom in downstream applications and domestic substitution of design software. We expect the company to achieve revenue of 878/1,108/1,417 million yuan in 2022/2023/2024, respectively, and net profit of 0.65/16/182 million yuan. Based on the closing price of 10.16 yuan on November 28, the corresponding PE for 2022/2023/2024 was 93.89X/52.37X/33.50X respectively, maintaining the “recommended” rating.
Risk warning
The development of the new energy industry fell short of expectations; the progress of domestic substitution in the industry fell short of expectations; industry competition intensified; and the company's EPC business liquidation progress fell short of expectations.
