It is a rising star in fan manufacturing, and its performance is growing rapidly. The company's main business includes wind turbine R&D, manufacturing and sales business, as well as wind farm design, construction, operation and management business. In 2020, benefiting from the rush to install wind power and leveraging cost advantages, the company achieved rapid growth in performance. After entering the era of affordability, Q1-3 of 2023 achieved revenue of 7.490 billion yuan, a year-on-year increase of 18.04%, and net profit to mother of 1,031 billion yuan, a year-on-year decrease of 1.21%.
Offshore wind power has broad prospects, and the time is ripe for overseas exports.
(1) Strong demand for offshore wind power at home and abroad: At home, the total installed capacity of the “14th Five-Year Plan” offshore wind power plan announced by various provinces is close to 60 GW. At the same time, with the limited impact of military and single 30 policies and the gradual resolution of waterway issues, the driving force for domestic offshore wind demand will be further strengthened in 24-25. Looking overseas, Europe has a large planned capacity for offshore wind power. The UK/France/Germany plan to reach 50/35/30GW of offshore wind power in 2030; the development potential for offshore wind power in North America is huge; the US plans to install 30/110GW of ocean wind by 2030/2050; countries in the Asia-Pacific region such as Japan, South Korea, and Vietnam are rich in offshore resources, and overseas markets are expected to continue to contribute to global ocean wind growth in the future.
(2) Domestic machine manufacturers are more cost-effective, and the general trend of going overseas: in terms of large-scale development, domestic manufacturers have basically caught up with or even surpassed foreign manufacturers. In terms of price, the comprehensive average price of Vestas/NordEx fans is 5000-7,000 yuan/kW, while the average domestic price range in 2023 is 1700-1900 yuan/kW, and the average offshore price range is 3,500-3,700 yuan/kW. Domestic manufacturers have obvious price advantages and are cost-effective.
All aspects are laid out in a comprehensive manner to create a strong cost advantage. According to incomplete statistics on public projects, the average bid price (including the tower) of the company in 2023 was less than 2,000 yuan/kW, which is lower than that of other mainstream machine manufacturers. While maintaining low prices, the company's unit material costs are at a low level and have declined steadily, from 1760.56 yuan/kW in 2020 to 1567.78 yuan/kW in 2022, making the company significantly lead the company's unit gross profit. (1) Integration of the industrial chain: The company saves material costs through self-production of core fan components such as blades and generators, and realizes strategic ties with key suppliers such as gearboxes and bearings through shareholding and distribution, creating a supply chain with supply safety and cost advantages.
(2) Product design innovation: Aiming for optimal electricity cost, to achieve collaborative design of blades, motors and the whole machine, and at the same time achieve lightweight blades and structural parts to promote weight reduction, cost reduction, and reliability of the whole machine product.
(3) Implement the double feed route: The company goes deep into the double feed technology route to expand the cost difference, and continues to innovate and improve on this basis, making fan products have the five major advantages of “high, large, long, light and intelligent”.
Relying on its own cost advantage, the “Double Seas” strategy creates new performance growth points.
(1) Overseas exports: The company is strengthening overseas market development efforts, focusing on Europe, Asia, Latin America, the Middle East and Africa. It has two overseas subsidiaries, Sany Heavy Energy European Research Institute and Sany India Wind Energy. The company has now won bids for several projects in Kazakhstan.
(2) Offshore wind power: At the end of March 2023, the company's 9MW offshore wind turbines went underground at the Dongying Wind Power Equipment Industrial Base. This unit was the first batch of offshore wind turbines using the “box-on-top high-speed double feed” technology route, marking the company's official entry into the offshore wind power market. The company also unveiled a 13/16MW offshore wind turbine at the 2023 Beijing Wind Energy Exhibition, and future development is worth looking forward to.
Profit forecast: We expect the company to achieve operating income of 170.74/209.36/24.586 billion yuan in 2023-2025, up 38.5%/22.6%/17.4% year on year, and achieve net profit of 18.21/21.26//2,393 billion yuan, up 10.5%/16.7%/12.6% year on year. The current stock price corresponds to PE 16.2/13.9/12.3 times. Along with the boom in the wind power industry, on the one hand, the company's fan business order volume continues to rise, product structure optimization (subsequent launch of offshore products+overseas market expansion), the superposition cost advantage continues to be consolidated, and profitability continues to improve; on the other hand, the company holds wind farm resources and the rolling development model opens up room for improvement in the company's performance, so it is optimistic about the company's overall performance development, covering it for the first time, and giving it a “gain” rating.
Risk warning: Risk of wind power installations falling short of expectations, increased risk of industry competition, risk of product quality risk, risk of deviation in industry scale measurement, calculation deviation, and risk of information lag in public data used in research reports.