A joint venture was set up to establish Electric Guoxuan to speed up the layout of the entire energy storage business chain
In the field of energy storage, Shanghai Electric has achieved the chain-based and industrialized development of the energy storage business through joint ventures with leading enterprises in the industry, exploring the investment of scientific and technological personnel, and accelerating the commercialization of technology independently developed by the Central Research Institute under its subsidiary Central Research Institute. Shanghai Electric also provides customers with a series of high-safety, long-life, and intelligent one-stop smart energy storage system solutions, mainly including power grid-side solutions, power system frequency modulation solutions, wind and light disposal solutions, etc.
In recent years, Shanghai Electric has accelerated the deployment of energy storage. It has participated in various projects in the fields of power grid side, new energy side, user side, etc., and invested in the construction of Electric Guoxuan's Nantong energy storage system production base in Nantong. It is expected that after completion, Shanghai Electric will become the largest single energy storage system manufacturer in China, achieving large-scale resource utilization and market layout.
The energy storage market is developing steadily, with priority allocation of new energy+energy storage
According to CNESA data, as of the first quarter of 2020, the cumulative installed scale of power energy storage projects that have been put into operation worldwide reached 184.7 GW, an increase of 1.9% over the previous year. Among them, the cumulative installed scale of electrochemical energy storage projects was 9660.8 MW, accounting for 5.2%. According to Wood Mackenzie's forecast, the global energy storage market will grow 13 times to 230 GWh by 2025. According to CNESA's forecast, it is positively estimated that the cumulative installed capacity in 2020 may reach 3092.2 MW, and the future development prospects of the energy storage industry are broad.
Since 2020, some provinces have issued policy documents to encourage or prioritize new energy allocation and storage projects to promote the widespread implementation of the “new energy+energy storage” model. By the end of 2019, the cumulative installed capacity of energy storage projects put into operation in China and built in conjunction with photovoltaics was 800.1 MW, an increase of 66.8% over the previous year. Since 2020, under the impetus of local policies encouraging the allocation and storage of new energy sources, many photovoltaic storage projects have been updated, and the regional distribution is still dominated by the Sanbei region.
Profit expectations
We expect the company's revenue for 2020-2022 to be 1541.28, 1682.25, and 173.373 billion yuan, up 20.88%, 9.15%, 3.06% year on year; net profit of 36.78, 40.82, 4,533 billion yuan, corresponding to EPS of 0.24, 0.27, 0.3 yuan, and corresponding PE of 20.68, 18.64, 16.78 times. In our opinion, the company's PE center has been around 30 times over the past three years. Dongfang Electric, a large integrated equipment manufacturer of the same type The average PE value of Harbin Electric and Shanghai Electric in 2019 was 25.47. As the company's business transformation and sub-sector split listing will help boost the company's valuation. In response, we expect the 2020 valuation level to be about 25 times. The target price will be “6 yuan”, giving an “increase in holdings” rating.
Risk warning: risk of policy change, security risk, market risk, risk caused by other force majeure factors.