(Report Producer/Author: China Merchants Securities, Zhang Xia)
1 Framework: Investment Promotion Strategy Track Investment Framework Review
What is Track Investment?
With the advancement of technology, the reduction of costs, the maturity of the model, the perfection of products, a blockbuster product, the case of the explosion began to be conceived, driven by a good sense of experience, technology and innovation began to erupt, the performance began to be released rapidly, the accumulation of the early stage was converted into the outbreak of income and profits, at this stage, the penetration rate will increase rapidly, after breaking through 10% in a short period of time to reach more than 60%, this stage is what we call the track, industrial investment stage.
The BEAT rule of track selection
Determined industry trends (good stories) = policy support (at least no objections) + technology/product innovation + current low penetration rate + blockbusters + catchy concepts.
Four key words of track collapse
Four keywords: penetration exceeding thresholds or logical falsification, performance Miss, unreasonable total market capitalization, liquidity crunch.
2 From the BEAT rule to see the top 20 industry trends in 2022
photovoltaic
Story: With the decline in costs driven by technological progress, photovoltaics will achieve parity in 2021 and begin to be economical. In the context of global carbon neutrality, the mainland has successively introduced policies such as county-wide promotion and wind and photovoltaic large bases to accelerate domestic photovoltaic installations. According to BP's forecast, the proportion of global wind and solar power generation in primary energy in 2050 is 44%, assuming that photovoltaics account for 24%, and photovoltaic power generation accounts for 2.5% of the world in 2019, the current penetration rate is 10.5%.
Performance: The performance of the leader continued to increase, but in 2021, the growth rate declined slightly due to the impact of the rise in silicon prices.
Consensus and target: The market consensus is very high, and there are about 40 main targets, which is enough to form a plate effect.
Silicon prices have declined in an orderly manner, and downstream demand is expected to exceed expectations
In 2021, the price of silicon materials rose sharply, and the profitability of downstream battery modules was under pressure. However, under the market's optimistic expectations for the future and the continuous catalysis of policies, the photovoltaic industry chain has risen significantly. Looking forward to 2022, with the commissioning of silicon materials, silicon prices are expected to decline in an orderly manner, and the core of the leading photovoltaic industry chain will be transformed into downstream demand. The current market expects that the domestic installed capacity will reach 80-100GW next year. Recently, according to Zhihui Photovoltaic, the second batch of large base planning has been basically completed, with a total scale of more than 400GW, which will be landed during the 14th and 15th Five-Year Plan periods, of which the amount of 15th Five-Year Plan arrangements is relatively more. Previously, the industry expected that the scale of the second batch of large bases would be comparable to the first batch, that is, about 100GW, and the scale of 400GW would exceed the previous industry expectations.
Wind power
Story: The large-scale wind turbine has driven the industry to continue to reduce costs, and onshore wind power will be parity in 2021, and it is expected that offshore wind power will also achieve parity in 2022-2023. In the context of global carbon neutrality, the mainland has successively introduced policies such as wind and solar bases and wind power partnership action plans to accelerate domestic wind power installations. According to BP's forecast, the global wind and solar power generation will account for 44% of primary energy in 2050, assuming that wind power accounts for 20%, and wind power accounts for 5.2% of global energy consumption in 2019, the current penetration rate is 26%.
Performance: The performance of the leader continues to increase, and some links in 2021 will be greatly affected by the price increase of raw materials.
Large bases, decentralized and new and old replacement lay the foundation for installation
Looking forward to 2022, large bases, decentralized and new and old replacements will further lay the foundation for wind power installation: (1) decentralized wind power: conservative estimates of decentralized wind power during the 14th Five-Year Plan period of 50-60GW or more; (2) new and old replacement: pure increase, high probability expansion, may be isotope, point replacement (more elastic), conservatively expect that the replacement of new and old during the 14th Five-Year Plan period will bring 50-70GW demand; (3) large base construction: it is estimated that wind power will be more than 100GW during the 14th Five-Year Plan period. Considering offshore wind power and other projects, it is conservatively expected that the average annual installed capacity of wind power during the 14th Five-Year Plan period will be 50-65GW, and it is expected that the installed capacity of wind power in China will be 55GW in 2022 and 80-90GW in 2025, with an average annual compound growth rate of more than 20%. (Source: Future Think Tank)
Electrochemical energy storage
Story: As the proportion of renewable energy sources such as wind and solar increases in primary energy, energy storage has become an inevitable choice. Since 2021, new energy storage opinions, time-sharing electricity price mechanisms, and the "Notice on Encouraging Renewable Energy Power Generation Enterprises to Build or Purchase Peak Regulation Capacity to Increase the Scale of Grid Connection" and other policies have been proposed to open up market space for energy storage, and currently form five major energy storage markets: power generation side, electricity side, industry and commerce, household use, and 5G base stations. At present, the global energy storage power generation and grid-side penetration rate is about 5%.
Performance: The performance of the leading leader continued to increase.
Consensus and target: The market consensus is very high, and there are about 25 main targets, which is enough to form a plate effect.
Pay attention to the progress of energy storage on the power generation side and the user side
According to the new youjia training team of China Merchants Electric, from the perspective of the development stage of the industry, the proportion of domestic wind and solar power generation in 2021 has reached 11.8%, and under the background of the continuous improvement of new energy penetration, accelerating energy storage support at the current point in time is an inevitable choice to achieve the "double carbon" goal. Domestic policies present a mandatory + incentive model, with the peak-valley electricity price adjustment, auxiliary market mechanism established, the economics of energy storage will be significantly improved, in the source - network - load side are likely to achieve rapid development, to maintain the global market space in 2025 more than 150 billion forecast. From the perspective of industry links, batteries, PCS, and system integrators are expected to share opportunities in the energy storage market.
Green electricity
Story: Technological advances have led to a continuous decline in the cost of wind and photovoltaic power generation. In 2021, the state has successively proposed policies such as dual control of energy consumption and green electricity trading, and IN 2022 CCER is also expected to be launched to open up market space for green power operators and improve their cash flow situation. Measuring the penetration rate of green electricity in terms of the proportion of wind and photovoltaic power generation, the total proportion of wind and photovoltaic power generation in the mainland in 2021 is 11.8%, according to the State Grid forecast, wind and photovoltaic power generation will account for 62% in 2060, and the penetration rate of green electricity is 19%.
Performance: The performance of leading enterprises is stable, and the performance of some integrated power generation enterprises in 2021 will be greatly affected by the rise in coal prices.
Consensus and target: The market consensus is very high, and there are about 35 main targets, which is enough to form a plate effect.
CCER is expected to restart, the first year of market development
2021 is the first year of green power investment, and with the continuous increase in wind and photovoltaic installed capacity and policy support, green power operators have increased significantly throughout the year. Looking forward to 2022, the market for green electricity is still likely to continue. Wind and solar power generation will continue to rise rapidly in the future. Last year, the reform policy of the electricity price mechanism was just implemented, and green electricity operators are expected to bid farewell to relying on government subsidies and achieve market-oriented development, thus bringing about a substantial improvement in corporate profits and cash flow. In addition, the CCER mechanism is expected to be restarted in 2022, or will catalyze the green electricity market. It is recommended to pay attention to the project planning and balance sheet improvement of green power enterprises.
New power system
Story: With the continuous increase in the proportion of new energy at the power generation end, the application of interactive energy-using equipment such as electric vehicles, distributed energy, and energy storage at the power end, the power grid needs to adapt to the changes of double high and double peaks, and improve the adjustment ability and intelligence level. In 2021, the National Energy Administration proposed to promote the integration of power source networks, loads and reserves and the development of multi-energy complementarity. Measuring the penetration rate of the new power system by the level of terminal electrification, the electrification level in the mainland will be 28% in 2021, and according to the State Grid, the electrification level will account for 70% in 2060, and the penetration rate of the new power system will be 38%.
Performance: The performance of the leading enterprises is stable, and some enterprises are greatly affected by the rise in raw material prices in 2021.
New energy infrastructure is expected to increase, and energy storage is the biggest change
In 2022, due to the greater downward pressure on the domestic economy, the policy of stabilizing growth is likely to increase. At present, there are many constraints on infrastructure and real estate investment, and the related investment in wind power, photovoltaic and power systems is expected to exert force. According to our previous estimates, the investment in new energy infrastructure will reach an average annual level of 3 trillion yuan in the next decade, of which power grid investment will account for about 1/3 of the proportion. According to the new youjia training team of China Merchants Electric, the biggest structural change at present is energy storage, which may be based on pumped storage and flexible transformation of thermal power, and several other more reliable directions include: UHV, distribution energy-saving transformers, and meter updates and upgrades. Others include: urban grid transformation (GIS/GIL), transformation of state grid centralized control stations, power quality (SVG/SVC), informatization and intelligent upgrading.
Lithium
Story: Under the background of carbon neutrality, countries have introduced negative incentive policies for fuel vehicles, which has made car companies have incentives to launch new energy models. Tesla and other new car-making forces and new models of the launch of the silver carp effect, in essence, new energy vehicles are a way to improve the level of electrification in the transportation field, behind the global energy change background. Mainland China will release a new energy industry development plan in 2020, and plans to reach 20% penetration of new energy vehicles by 2025. Based on the penetration rate of new energy vehicles, the penetration rate of lithium batteries in 2021 is about 15%.
Performance: The performance of leading enterprises has increased, and some enterprises have been doubly favorable to volume and price increases in 2021.
Consensus and target: The market consensus is very high, and there are about 50 main targets, which is enough to form a plate effect.
Good supply stimulates demand and focuses on companies with significant competitive advantages in all aspects
Entering 2022, we believe that the potential terminal demand is huge, good supply to stimulate demand is emerging, it is expected that global tram sales will still grow at a high level, many links or enterprises in the middle /upstream, supply is still a core contradiction, mainstream enterprises will still have strong growth. Last year, most of the "gap-type" supply chains will be filled, so the supply and demand situation and profitability of most material links will gradually return to normal, and the focus will be on the competitiveness assessment of individual enterprises, and further focus on companies with significant competitive advantages in each link.
Hydrogen energy
Story: Hydrogen energy is a clean and efficient secondary energy source, which has always been the focus of development in various countries. At present, most of the domestic coal to hydrogen is the mainstay, and the products are mostly used in industrial production, and less is used in the form of energy. Under the background of carbon neutrality, the future hydrogen production is mainly based on renewable energy electrolysis of water to produce hydrogen, which is applied to the field of transportation. At present, the global green hydrogen penetration rate is 4%, and the mainland is 1%.
Performance: The performance of the leader has increased.
Consensus and target: The market consensus is high, and there are about 30 main targets, which is enough to form a plate effect.
fuel cell
Story: Hydrogen energy is a clean and efficient secondary energy source, which has always been the focus of development in various countries. However, due to the imperfect hydrogenation infrastructure in the mainland and the immature fuel cell-related technologies, its cost is relatively high. In 2020-2021, the mainland will launch a hydrogen energy demonstration city policy, and at present, Beijing, Shanghai and Guangdong have become the first batch of demonstration cities, and the second batch of demonstration cities is about to land, and the industrialization of hydrogen energy is expected to accelerate. At present, continental fuel cell vehicles are mainly used in the field of commercial vehicles, with a penetration rate of about 0.03%. (Source: Future Think Tank)
Performance: The performance of the leader is high, but the growth rate is not stable. At present, there are few listed companies whose main business is fuel cells, and most of them are mainly based on the layout of subsidiaries.
Consensus and target: The market consensus is high, and there are about 20 main targets, which is enough to form a plate effect.
Hydrogen Energy & Fuel Cells: Early industrialization, focus on policy catalysis
The development stage of hydrogen fuel cell vehicles is similar to that of pure electric vehicles in 2010. At the policy level, the formulation of state-level technical standards, the introduction of relevant central and local industrial policies and plans, and the implementation of subsidy policies in pilot cities; at the level of penetration, the annual sales of hydrogen fuel cell vehicles and pure electric vehicles account for a relatively close proportion of total automobile sales, located at the same order of magnitude; at the technical level, priority is given to the promotion of commercial vehicles, and the popularization and application of commercial vehicles is used to further promote the large-scale application of passenger cars in the field.
From the perspective of long-term investment, it is recommended to actively pay attention to the clear development direction of the technical route in the hydrogen energy industry chain, such as the production of electrolysis water to hydrogen and related electrolysis system equipment manufacturing, and the storage and transportation of liquid hydrogen. From the perspective of medium-term investment, it is recommended to actively pay attention to the construction of hydrogen refueling stations in the upstream of the industrial chain and the hydrogen fuel battery vehicle link in the downstream of the industrial chain, and it is expected that the continuous force of policy subsidies will make these links release performance in the short term.
Aerospace industry chain & domestic large aircraft
Story: As the international situation becomes more and more complicated, the mainland's national defense policy has gradually changed from "steadily advancing the goal of strengthening the armed forces" to "comprehensively training troops and preparing for war." During the 13th Five-Year Plan period, the mainland's weapons and equipment were successively installed, realizing the goal of starting from scratch. During the 14th Five-Year Plan period, the mainland's weapons and equipment entered the period of construction. In addition, the military-civilian integration policy has also brought greater room for growth to the military industry. In terms of penetration rate, the mainland's domestically produced large aircraft C919 has not yet been delivered, and the penetration rate of domestic large aircraft is 0%. In terms of military aircraft, the number of US military aircraft is the final value, and the current number of fighters of the third generation and above on the mainland is only 29.3% of that of the United States.
Performance: The performance of the leading enterprise has increased, and the amount of contract liabilities of the main engine factory is large.
Consensus and target: The market consensus is high, and there are about 50 main targets, which is enough to form a plate effect.
During the rapid climbing period of production capacity, the high prosperity is expected to be maintained
In 2021, the performance of the semi-annual and third quarterly reports of the military industry has improved significantly, and the prosperity of the industrial chain has been comprehensively verified from top to bottom. Entering the 14th Five-Year Plan stage, a number of key equipment will change from the small-batch production stage during the 13th Five-Year Plan period to the rapid capacity climbing period. Looking forward to 2022, some listed companies are expected to obtain additional growth profits and achieve rapid growth in performance. First of all, with the deepening of military-civilian integration, private enterprises have obtained major development opportunities, driving the continuous improvement of industry efficiency. Secondly, the industry will obtain a phased scale effect of red profits, especially the industry's middle and lower reaches of the central enterprises to benefit significantly, driving a rapid increase in profitability. Finally, the dividend of state-owned enterprise reform is concerned: equity incentives continue to advance, and business vitality is gradually released.
Smart driving
Story: As the car's powertrain shifts from fuel to battery, the car's electrical and electronic architecture becomes centralized, and high-level autonomous driving is easier to achieve. With the realization of high-level autonomous driving, the car will become another intelligent terminal for human beings, entering the era of software-defined cars. In terms of penetration, the current L2 autonomous driving is more for assisted driving. Based on the proportion of car sales with L3 self-driving capabilities to car sales, the current penetration rate of smart driving is about 1.8%.
Consensus and target: The market consensus is very high, with about 30 main targets, which is enough to form a plate effect.
The development of automobile intelligence is accelerating, and the beta market is worth looking forward to
In 2021, multiple factors such as policy promotion, the release of electric vehicles, and the reform of electronic and electrical architecture have laid the foundation for the popularization of intelligent driving. Looking forward to 2022, the wave of electrification is expected to usher in a golden cycle of automotive intelligent development. With the release of new models, sensors represented by cameras, lidar and smart cockpits may deduce the big beta market.
Third-generation semiconductors
Story: Compared with silicon-based materials, the third generation of semiconductors has the advantages of high luminous efficiency, high temperature resistance, high pressure resistance, etc., and has a wide range of application scenarios in the fields of optoelectronics, radio frequency, and high-power power electronics. Especially in the context of carbon neutrality, photovoltaic inverters, wind power converters and automotive power devices all have a large number of application scenarios for third-generation semiconductors. With the gradual failure of Moore's Law, the third generation of semiconductors has also become a breakthrough in the overtaking of the mainland semiconductor industry. The "Several Policies for Promoting the High-Quality Development of the Integrated Circuit Industry and the Software Industry in the New Era" supports the development of integrated circuits in the mainland in various aspects, such as fiscal and taxation, investment and financing, and research and development. At present, the penetration rate of continental power semiconductors is about 1.6%, and the global penetration rate is about 4.5%.
Consensus and target: The market consensus is high, and there are about 20 main targets, which is enough to form a plate effect.
The downstream market continues to erupt and grows rapidly in the next five years
According to CASA Research, the domestic SiC and GaN power electronics market size in 2020 is about 4.68 billion yuan, an increase of 90% over the previous year. The main drivers of the growth of market size are the rapid penetration of the new energy vehicle market and the outbreak of the PD fast charging market. Looking forward to 2022, with the increase in demand for power semiconductors in wind power photovoltaics and the breakthrough of vehicle-grade third-generation semiconductors, the third-generation semiconductors are expected to usher in rapid growth. In the long run, in the next five years, the Application Market for SiC and GaN Power Electronic Devices will grow to nearly 30 billion yuan at a compound annual growth rate of 45%. (Source: Future Think Tank)
3 Twenty Tracks current valuation, transaction congestion and performance forecast
Most track valuations return to reasonable ranges: since the beginning of the year, popular tracks have undergone a major adjustment. After the adjustment, judging from the current matching of the valuation of each track with the growth rate of profitability, most of the tracks have returned to the range where the valuation is more reasonable.
Most track transactions are less crowded: Previously, track transactions were crowded, resulting in greater track volatility and a poor investment experience. After the adjustment since the beginning of the year, the current trade congestion of each track has declined.
Excerpts from the report:
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank]. Future Think Tank - Official website