Key points of investment
Sany Heavy Energy has been deeply involved in the wind power industry for more than ten years, inheriting Sany's manufacturing genes. In 2008, the company's predecessor, Sany Electric Co., Ltd. was established. In 2017, Sany New Energy Company was established to extend to both ends of the industrial chain and get involved in the new energy development business. Since 2020, the company has relied on cost and manufacturing capacity advantages to accelerate market expansion. According to CWEA statistics, the lifting volume of Sany heavy energy fans in 2023 was 7.41 GW, accounting for about 10% of the domestic land wind market, rising to fourth place in the ranking. The company continues to promote large-scale expansion based on the dual feed technology route. Onshore fans have deployed 15MW models, and offshore wind power has formed an 8.5-16MW series of products.
Domestic wind power is recovering, and the high increase in overseas demand is expected to accelerate overseas. On the Lu Feng side, it is expected that the basic installed capacity of Land Wind will be around 80 GW in the future, and the total increase of 30 GW per year is expected to be exchanged for large plus wind power. The industry price war continues to this day along with the rapid large-scale process, but public quotes since the beginning of this year have shown a steady trend. The industry's competitive landscape and profit expectations have improved. We can follow the fan manufacturing business profit restoration process in the future. In terms of ocean breezes, the “14th Five-Year Plan” ocean breeze has a planned capacity of nearly 60 GW. The installed capacity of the sea breeze will reach 30 GW in 24-25, and is expected to enter a new round of rush installation in 24. At the same time, the deep-sea plan will also be implemented during the 14th Five-Year Plan period. The ocean breeze sector is expected to start a new growth cycle. In terms of exports, domestic wind power exports were 3.7 GW in 2023, +60.2% over the same period. Overseas mainframe manufacturers have become a key market layout market. Going overseas is gradually entering a new stage, and Chinese technology and Chinese standards are gradually being implemented overseas.
Empowering digital intelligence creates a cost leading edge and continues to lay out a “double sea”. The company continues to empower the “cost leading strategy” through self-production of core components+box-turn-on-top technology+digital intelligence, and is expected to stand out from the fierce competition. Currently, the domestic fan share exceeds 9% (about 10% for land wind), ranking in the top five, and has an obvious profitability advantage. In the field of sea wind fans, the company promotes collaborative design of complete machines and core components. It has laid out a base in Dongying, Shandong, and the first batch of units has been successfully launched. It is expected to enter the sea breeze market in the future. In 2023, the company made a new breakthrough overseas and achieved a better gross margin for overseas wind power equipment in Central Asia and South Asia. At the same time, it will bring about a significant increase in orders.
Profit Forecasts and Ratings
We forecast that the company's revenue for 2024-2026 will be 22.3/25.72/28.65 billion yuan, net profit to mother will be 2.32/2.72/3.09 billion yuan, respectively, and the PE multiples will be 12.7, 10.8, and 9.5 times, respectively. For the first time, coverage gave it an “increase in holdings” rating.
Risk warning:
Wind power installations fall short of expectations; risk of increased market competition; Sea Breeze+ overseas market expansion falls short of expectations; product quality risk.