Wind power equipment: Leave half sober and half drunk

Core idea :

Global wind turbine demand will grow at a compound growth rate of 20% until 2020

From the historical data, the global installed wind power annual compound growth rate reached 25% from 1996 to 2007; Increasing environmental concerns, high oil prices and the increasing maturity of wind power technology all support strong demand for wind power installations in the future. Abundant global wind resources make the growth of wind power without resource bottleneck.

Demand for wind turbines in China to outstrip supply in 2008

Our country is in the early stage of wind power development, in the next three years the domestic demand for wind power unit will still grow rapidly, the compound growth rate will reach 40%, the growth rate will reach 50% in 2008; If domestic capacity cannot be released effectively before 2009, domestic demand for wind turbines will exceed supply in 2008.

Goldwind, Dongqi and Sinovel are the most competitive local wind turbine manufacturers in the future

Goldwind, Dongqi and Sinovel are the most competitive local wind turbine manufacturers in the future. We evaluated local manufacturers from six aspects: technological maturity, capital strength, supporting system perfection, talent reserve, historical performance and brand image, management and incentive. The three companies are considered to be the most competitive local wind turbine manufacturers in the future.

to the wind turbine manufacturing industry “ Recommend.

Huge market demand, good manufacturing base, China's wind turbine manufacturing industry has a broad prospect, we give the industry. Recommend. Investment rating.

In 2008, the rapid development of the industry brought huge opportunities to the companies in the industry, but we believe that certain growth premium should be given to the companies in the industry with core technologies or good development prospects, while some companies without core competitiveness should not enjoy the growth premium enjoyed by other market windmill manufacturers.

Dongfang Electric

As one of the most competitive local enterprises in the industry, the current stock price does not reflect the value of the company's wind power business: the company's traditional business is estimated to be 71 billion yuan, and the wind power business is estimated to be 9 billion yuan. The overall market value of the company is 80 billion yuan, and the value per share is 98 yuan.

Investment Summary:

Driving Factors, Key Assumptions and Key Predictions:

The increasing global attention to environmental issues, the high international oil price and the maturity of wind power technology bring about the reduction of wind power cost, which are the main driving factors for the rapid growth of wind power installed capacity.

As wind power technology matures, the cost of wind power is falling by 20% every five years.

Global wind power installations are expected to grow at a compound annual growth rate of 20% until 2020.

The compound growth rate of China's wind turbine demand in the next three years will reach 40%; Demand for wind turbines in China is expected to grow by 50% in 2008, and a failure to release capacity will tighten supply.

Where we differ from the market view:

The market believes that all wind turbine manufacturers should be given a growth premium.

We believe that companies in the industry with core technologies or good development prospects should be given a certain growth premium, but some companies without core competitiveness should not enjoy the growth premium enjoyed by other market windmill manufacturers.

Industry valuation and Investment Advice:

The major wind turbine manufacturers in the European market have an average forecast price-earnings ratio of about 47 times in 2008, representing a premium of 228% to the market average, indicating a positive outlook for the industry's growth prospects. The forecast price-earnings ratio of listed Chinese wind turbine companies in 2008 is 57.39 times, and the relative premium rate is 81.56%, lower than the European market.

China's wind turbine manufacturing industry is growing fast. With China's huge market and good manufacturing foundation, there will certainly be local wind turbine manufacturing enterprises with global competitiveness in the future. We give the industry. Recommend. Investment rating.

Dongfang Electric, which does not reflect the company's wind power business, is recommended.

Catalysts for industry performance:

Worsening global environmental problems and a further rise in oil prices will stimulate the demand for wind power.

The breakthrough of wind power technology will reduce the cost of wind power and improve the competitiveness of wind power compared with traditional energy sources.

The above factors will enhance the market's confidence in the development prospects of the industry, push up the share prices of corresponding companies, and improve the overall performance of the industry.

Major risk factors:

The preferential policies to support the development of wind power cannot be realized, and the supply of key components cannot be effectively guaranteed, which will restrict the development of the industry.

Background Analysis of Global Wind Power Supernormal Development

In the past ten years, global wind power has achieved extraordinary development. By analyzing the internal reasons, we believe that it depends on one condition and three driving factors supporting the development of wind power. One condition is the existence of abundant wind power resources in the world, and the three driving factors are the increasing global attention to environmental issues, high oil price and increasingly mature wind power technology.

(I) Increasingly serious environmental problems promote governments to support the development of clean and new energy

At present, the international community is increasingly aware of the seriousness of environmental pollution and global warming, and has taken measures to try to curb the deterioration of environmental problems. One of the measures is to support the development of clean new energy. Wind power is a new clean energy that can be developed commercially on a large scale. From the international experience, the government's incentive policy plays an important role in the development process of wind power industry. These policy measures include various forms of subsidies, price concessions, tax breaks, discount or low interest loans, etc. High strength incentive mechanism is one of the key measures to overcome the development obstacles and promote the industrial development.

At present, China's policies and measures to encourage the development of domestic wind power mainly include: the requirement of 70% localization rate, full access to the Internet for wind power, electricity price allocation and financial and tax support. These measures play an important role in stimulating domestic wind power investment enthusiasm and supporting the local wind power manufacturing industry. As for the wind power policy, we have a more detailed introduction in the attachment.

(2) High oil prices force countries to seek renewable alternative energy sources

Since 2003, the international oil price has continued to rise. By the end of 2007, it had approached the $100 mark several times. The continuous rise of the international oil price has driven the price of natural gas, coal and other fossil energy.

The high price of fossil fuels has made alternative energy sources such as wind, nuclear and solar economically viable, and these factors have led to a global investment boom in new energy sources, including wind power.

(III) Wind power generation technology is becoming mature

The characteristics of fossil and other single-use energy, such as the increase of environmental cost and non-renewable, decide that the cost will continue to rise; With the maturity of technology and the play of scale effect, the cost of wind power, nuclear power and other new energy generation will be further reduced.

Among the many new energy sources, wind power is one of the most promising new energy sources for commercial development. In recent years, with the increasingly mature wind power technology, the installed capacity of wind power keeps increasing, the grid-connected performance keeps improving, and the power generation efficiency keeps increasing. Wind power equipment stands out in the global energy equipment.

Wind power units account for about 70% of wind power investment. With the maturity of wind power technology and the appearance of scale effect, the price of wind power units keeps falling, which brings about the continuous reduction of wind power cost. The cost of wind power fell rapidly in the 1980s and early 1990s; Even since the mid-1990s, the cost of wind power has been falling by 20% every five years. At this rate, by 2020, even without subsidies, the cost of wind power will approach that of conventional energy sources such as coal.

(4) There is no resource bottleneck in wind power development

About 2% of the sun's radiant energy to the Earth is converted into wind energy. The World Meteorological Organization estimates that the total global wind energy resources are about 53 trillion kilowatt-hours, about 10 times the water resources, equivalent to 1,080 billion tons of standard coal energy, about 100 times the world's current energy consumption, wind energy currently developed only accounts for a negligible fraction of the global wind energy resources.

Take China as an example, it ranks third in the world in wind power resources, after Russia and the United States. According to the latest assessment of wind energy resources, China's land-based wind energy resources are 300 million kw, and the total amount of wind energy resources available in offshore waters is about 1 billion kW. By the end of 2007, China had developed only 0.5% of the wind power resources that could be developed. The wind resource is abundant in our country. Sanbei; (Northeast, northwest and North China) and the southeast coast.

Global wind turbine supply and demand tend to balance in 2008

(I) Global wind turbine demand remains strong in 2008

By the end of 2007, it is estimated that the cumulative installed wind power capacity in the world will reach 92,915MW, with a year-on-year growth of 25.18%; The newly installed capacity reached 18,692 MW, a year-on-year increase of 23%.

In 1995, the global demand for wind turbines was about 1290MW. By 2007, the global demand for wind turbines reached 18,692MW, which increased by 14.5 times in 12 years, with a compound growth rate of 25%.

In the context of high oil prices, increasing environmental concerns and falling wind power costs, we expect global wind turbine demand to grow at a compound annual growth rate of 20% until 2020. Global demand for wind turbines grew 21% in 2008 to 22,618MW.

The growth of world installed wind power capacity in the 1980s was mainly concentrated in the United States. From 1986 America prematurely ended incentives to encourage wind power; In contrast, in Europe, some countries established relatively comprehensive policies to support renewable energy in the early 1990s. In the following period, Europe achieved faster development. By the end of 2006, about 48,000 MW wind turbines had been installed in Europe, accounting for 65.18% of the world.

In recent years, due to the rise of global energy prices and the deterioration of the environment, North America and Asia, which are short of energy, have been more active in promoting the development of wind power, and the demand for wind power units is more vigorous, which shows that the installed capacity increases rapidly. In Europe, growth has leveled off as wind power resources have been developed. The main growth in wind turbine demand in the future will be in North America and Asia, especially Canada and the United States in North America and China and India in Asia, which are all growing fast.

Demand for wind turbines in Asia, North America and Europe in 2008 is expected to reach 7211MW, 5459MW and 10194MW, respectively, up 40%, 30% and 15% year on year, respectively.

(b) The tight supply of wind turbines in the world in 2008 was eased

The bottleneck of fan supply in 2007 lies in gear boxes and bearings. As early as 2006, the global mainstream fan capacity has been increased from 1MW to 2 ~ 3MW, the parts to meet the requirements are correspondingly reduced, gearbox and spindle manufacturers need 2 years to update the production line, the production capacity is difficult to improve quickly. Due to the shortage of parts, resulting in the shortage of complete machine supply in 2007. With the release of key parts production capacity in 2008, the tight supply situation of the whole machine will be alleviated, and supply and demand tend to balance.

The following figure shows that measured by the demand in 2006, the supply capacity of blades, generators and towers is greater than the demand, and the supply capacity of gearboxes and large bearings is less than the demand; Supply of all components exceeded demand in 2010.

Demand for wind turbines in China will continue to exceed supply in 2008

(1) The demand of Chinese wind power unit will still grow at a high speed in 2008

The promulgation of the Renewable Energy Law and a series of policies and measures to encourage the development of renewable energy have started the large-scale development of wind power resources in our country.

In 2007, according to the forecast of the wind Energy Association, China will increase the installed wind power capacity by 2.4 million kw, bringing the total installed capacity to 5 million kW, three years ahead of schedule. Wind power reached 5 million kW in 2010. The planning of The demand for wind power units in China increased 56 times in eight years from 43MW in 1999 to 2407MW in 2007, with a compound growth rate of 65.5%.

China is in the early stage of wind power development. We estimate that the demand for wind power units will continue to grow rapidly in the next three years. It is estimated that the demand for wind power units from 2008 to 2010 will reach 3.61 million kW, 5.05 million kW and 6.57 million kW respectively, with year-on-year growth of 50%, 40% and 30% respectively, with a three-year compound growth rate of 40%.

According to the medium - and long-term plan of renewable energy by the National Development and Reform Commission, the consumption of renewable energy will account for 10% of our energy consumption in 2010, and 15% in 2020. Combined with the wind resource situation, wind power as the renewable energy with the most commercial development prospect is bound to achieve the more normal development.

In the longer term, it is expected that the demand for wind power units in China will grow at a compound growth rate of 20% from 2011 to 2020. By 2010, the total installed wind power capacity will reach 2,024 million kW, and by 2020 it will reach 225 million kW.

2007, the newly installed wind power will reach 2.4 million KW, the current average price of wind power set is about 4000 yuan /KW, according to this calculation, Chinese wind power equipment only the whole machine has reached the nearly 10 billion yuan market scale, if parts are included, Chinese wind power equipment industry has reached the considerable scale. According to our forecast of the newly installed fan, considering the factors of the decrease of fan price and the increase of fan capacity and price, the market size of Chinese wind power unit is expected to reach 30 billion yuan in 2010, and 180 billion yuan in 2020.

(2) In 2008, domestic wind turbine supply still exceeds supply

A new bidding policy for wind power concessions that began in 2006 (a 70% localization requirement and binding bids by wind farm developers to domestic manufacturers) forced international producers to set up factories in China and produce locally.

The requirement of the localization rate of wind turbines restricts the import of wind turbines, and the expansion of local capacity takes time, generally at least 1-2 years from the establishment of the plant to the formation of mass production capacity. Moreover, as wind power is an emerging industry in China, the shortage of wind power talents and skilled workers will become an obstacle to a substantial increase in the capacity of wind power units in the short term.

Taking these factors into account, even if international manufacturers build plants in 2006, real capacity will not be released until 2009; It will take until 2010 for local manufacturers to really build large-scale production capacity if they introduce technology. We expect that by 2009, domestic wind turbines will still be in short supply, and the gap will be filled by imported units.

(C) The profitability of domestic wind turbine manufacturing industry will be stable but rising in 2008

Before 2009, our country wind power unit is still in short supply, domestic wind power price drop space is limited.

At present, 1.5MW large capacity units become the mainstream models, and the current price of such units in domestic products is about 5800 yuan /kw, higher than 750KW models of about 3750 yuan /kw price. With the increase in the degree of localization of the parts of 1.5MW models and the reduction of cost brought by the expansion of production scale, the gross profit margin of such models will gradually increase to close to or exceed the gross profit level of 750KW units, driving the improvement of the overall profitability of wind turbines.

Four, analysis of future competition pattern of Chinese wind power manufacturing industry

(I) China's wind turbine Manufacturing Industry at the peak of its infancy Generally speaking, there is a big gap between Chinese wind turbine manufacturing technology level and international advanced level

Technically speaking, the international large-scale wind power technology has become more and more mature in the past two decades. Driven by the goal of continuously reducing the cost of wind power generation and expanding the amount of economically available wind power resources, the international wind turbines are developing in the following directions:

Larger single capacity, at present, the international mainstream wind turbines have reached 2 ~ 3MW new structure and materials, the latest mainstream technology for variable speed constant frequency and gearless direct drive technology offshore special wind turbines.

In the past ten years, China's large wind turbine manufacturing industry basically started from zero, has just mastered the design and manufacturing technology of the whole 750KW unit and its components, and has realized batch production. At present, the domestic MW variable speed and variable paddle constant frequency units are in the development or introduction stage, and some units have been put into operation.

Chinese wind power manufacturing technology still has a big gap with the international advanced level, most enterprises through the introduction of technology into this industry, currently in the stage of digestion and absorption, we estimate that this process will last until about 2010, Chinese enterprises will have the ability to jointly develop or independent research and development. Of course, different companies will have differences in technological evolution due to their different foundation and time of entry into the industry, and the leading companies will have better opportunities in the future market competition.

2, Chinese wind turbine manufacturing industry is in the start-up period

From the perspective of industry cycle, Chinese wind power generation is still in the start-up period, the characteristics of the performance is that the technology is not mature, the industry continues to grow rapidly, there are many new enterprises to join the industry, will also be eliminated out of the enterprise.

We believe that only the local manufacturing enterprises that master the core technology or can quickly digest and absorb the introduced technology can eventually win the competition and grow with the industry.

(2) The stable competition pattern of Chinese wind power manufacturing industry has not yet been formed

1. Competition pattern of international wind turbine manufacturing industry tends to be stable

Since the beginning of the 21st century, there have been frequent mergers and acquisitions among international wind power equipment manufacturing enterprises. Giant enterprises have joined the wind power manufacturing industry, the industry concentration has been increasing, and the survival and development space of small and medium-sized enterprises has become narrow and difficult.

In 2003, Denmark's Vestas took over NEG Micon to become the world's biggest maker of wind turbines; America's General Electric (GE) entered the wind energy market in 2002 through the acquisition of Enron Wind; Germany Siemens in 2004 annexed the Danish Bonus company, to become the fifth largest fan manufacturing company; In June 2007, Suzlon acquired REPOWER and is expected to crack the top four.

In general, after the merger and reorganization in recent years, the industry concentration has been increasing, and the top five companies in the industry have stabilized, firmly occupying more than 80% of the global market share.

2. Domestic wind turbine manufacturing industry has not formed a stable market pattern

By the end of 2007, there were 21 major manufacturers entering the Chinese wind turbine manufacturing market, among which 4 were wholly foreign-owned, 5 were joint ventures and 12 were local manufacturers.

The stable market pattern of our country wind power turbine manufacturing industry has not been formed. Before 2006, foreign companies held more than 50 percent of the market. Due to the support of national policies and the strength of local manufacturers, the market share of local enterprises will gradually increase in the future, the market share of joint ventures will also increase, while the market share of foreign enterprises will gradually decline. We expect foreign, local and joint venture market shares to be 40%, 55% and 5% respectively in 2008.

3, four forces will occupy the dominant position in our future wind turbine manufacturing industry

At present, China has mastered the design and manufacturing technology of units below MW class and realized mass production. With a large number of enterprises involved in the field of fan manufacturing, foreign fan manufacturers have entered the domestic plant, the development and production of MW wind turbines accelerated rapidly.

From the current fan machine manufacturing, four forces worth our attention, they will occupy a dominant position in the future fan machine manufacturing.

One of the forces: the industry pioneer

This force is represented by Goldwind Technology, Zhejiang Yunda and Shenyang Huachuang, etc. With their keen sense of industry development, they realized the opportunity in the field of fan manufacturing early, took the lead in this market, completed the initial technology accumulation, formed a complete supply chain, and initially established their own brand among customers, with the advantage of first mover.

Although there is a first-mover advantage, the field of fan manufacturing has developed rapidly in recent years, with the emergence of new models. These enterprises face strong pressure from latecomers and foreign manufacturers, but also through cooperative development, the introduction of technology and other means to speed up the development of new products, trying to maintain their first-mover advantage.

Power two: Traditional equipment manufacturers strongly intervene

Represented by Dongqi, Sinovel, Harbin Electric and Shanghai Electric Power Co., LTD., they see the opportunities in the wind power market and under the pressure of enterprise transformation, many traditional equipment manufacturers strongly intervene in the wind turbine manufacturing industry. This includes the former large fan component manufacturers, major domestic large power plant equipment manufacturers and aerospace equipment manufacturers.

For example, when thermal power equipment has passed the peak of the boom, the three major domestic power equipment groups, Shanghai Electric Group, Dongfang Electric Group and Harbin Power Station Equipment Group, all regard wind power equipment manufacturing as the future business growth point and enter the wind power equipment manufacturing in a large scale. Dalian Heavy Industry Crane Co., LTD., taking advantage of its advantages in heavy equipment, established Sinovel Wind Power Technology Co., LTD., introducing 1.5MW wind turbine manufacturing technology from a high starting point.

Most of these enterprises have strong economic and technical strength, long-term industrial foundation and rich experience, and from the beginning to aim at the international mainstream MW advanced units, has a strong catch-up strength; Moreover, the long-term stability of the domestic wind market will give these new entrants plenty of time to catch up.

Power 3: Wind farm investors extend upstream industry chain

In investing in wind power projects, wind power companies have noticed the huge opportunity in wind turbine manufacturing and have also stepped in by extending upstream. These fan enterprises have the inherent advantages of being close to the market, owning the market first, and then organizing manufacturing. For example, Silver Star Energy, which is controlled by Ningxia Power Group, signed a technology supply contract with Mitsubishi Heavy Industries in 2007 to license the use of wind turbine technology, which will be used in wind farms developed by the company.

These enterprises can be said to be born with the golden key, product orders are guaranteed, relatively small risk, but they can quickly digest and absorb the introduction of technology, and eventually grow into a new force of domestic fan machine manufacturing is still unknown.

Power Four: Foreign fan manufacturers

Seeing the huge market of wind power generation in China, subject to the regulations of the localization rate of wind turbine equipment, major international wind power equipment manufacturers have set up factories in China as sole proprietorship or joint ventures. International fan manufacturers into the domestic, on the one hand to bring advanced fan manufacturing technology, on the other hand for the future of domestic fan manufacturing personnel training, skilled workers.

In 2006, foreign manufacturers occupied a dominant position in China's fan market: accounting for 55.10% of the newly increased installed capacity in 2006, accounting for 65.92% of the cumulative domestic installed capacity. Among them, Vestas, Gamesa and GE Wind occupy the top three, accounting for 18.73%, 18.63% and 10.74% of the total installed capacity in China respectively.

With advanced technology, management and strong financial strength, foreign fan manufacturers will occupy an important position in the domestic fan manufacturing market and become the most threatening rivals of local fan manufacturers.

(3) Future competition pattern of Domestic fan manufacturers

With the rapid growth of installed wind power in China, the Chinese government supports local wind power manufacturers by stipulating the localization rate of wind power manufacturers, which avoids the direct impact of foreign wind power manufacturers in the early stage of development.

At present, a large number of local enterprises have entered the wind turbine manufacturing industry, including 12 major enterprises. Although many of them have already produced prototypes, and some have been able to produce in small batches, it should be noted that there is a high barrier to entry for wind turbine manufacturing. If they do not have core technologies or can not quickly absorb imported technologies to form independent development capabilities, they will eventually be eliminated from market competition.

In the huge opportunities of wind power development in China and even the world, which enterprises can stand out and grow into globally competitive wind turbine manufacturing enterprises has always been the concern of the industry and capital market researchers.

We will score the current Chinese local wind turbine manufacturers from the aspects of technology maturity, capital strength, supporting system perfection, talent pool, historical performance and brand image, management ability and incentive mechanism, in order to find the most potential wind turbine manufacturers in China in the future.

1. The wind turbine manufacturing industry has a high entry barrier

More than 70% localization rate of wind power equipment has prevented a large number of foreign fans from entering China

According to the "National Development and Reform Commission on wind power construction management requirements of the notice" : wind power equipment localization rate to reach more than 70%, do not meet the requirements of equipment localization rate of wind farms are not allowed to build, therefore, wind turbine manufacturing can meet the wind power equipment localization rate requirements is one of the main obstacles for foreign manufacturers to enter the industry.

High capital threshold

Wind turbine manufacturing is a capital-intensive high-tech equipment manufacturing industry with large initial investment; Wind turbine manufacturing industry has obvious economies of scale, and benefits can only be generated after reaching a certain scale. It is difficult for small enterprises to survive in this industry, which requires enterprises to have strong financial strength to resist risks.

Technical barriers to the lack of technology accumulation of new entrants a big barrier

The design and manufacture of large wind turbine is very complicated, involving many advanced disciplines. It requires the production enterprises to have rich practical experience and proprietary know-how of the industry, and there are great obstacles to the new entrants who lack the accumulation of technology.

The obstacle of the shortage of professionals

The wind power industry is an emerging industry with rapid development. The domestic wind power industry is generally short of technical and management personnel with rich practical experience, and entering the industry is faced with the obstacles of talent shortage.

Historical performance and brand image pose great barriers to new entrants

Large wind turbine is the basic equipment of power system, which is operated in the field all year round with harsh environment and great operation risk. It requires reliable service life of more than 20 years. Therefore, owners are very cautious when choosing equipment manufacturers. In addition, the new unit must go through the pilot test of the prototype before it is put into use, and the test wind farm that can be connected to the grid is needed to test the new model. According to industry experience, the cycle from design to formal certification and mass production of large wind turbines generally takes three to five years, which poses a big barrier to new entrants.

2. Goldwind, Dongqi and Sinovel are the most competitive local wind turbine manufacturers in the future.

Now, we score the current Chinese local wind turbine manufacturing enterprises from the aspects of technology maturity, capital strength, supporting system perfection, talent reserve, historical performance and brand image, management ab