1. Policy analysis
The wind power industry belongs to the industry encouraged by the national industrial policy, and the National Development and Reform Commission, the National Energy Administration and other government departments have issued a series of industrial support policies, which mainly include:
The "Guiding Opinions of the National Development and Reform Commission and the National Energy Administration on Doing a Good Job in Energy Security in 2020" proposes to continue to build a diversified power production pattern. Under the premise of ensuring consumption, support the vigorous development of clean energy power generation, accelerate the decline of wind power subsidies, and promote the construction of a number of wind power parity grid projects。 In 2020, the installed capacity of wind power will reach about 240 million kilowatts。 Comprehensively promote the construction of power grids, orderly arrange the construction of inter-provincial and regional power transmission channels, and give priority to ensuring the delivery of clean energy。
The "Notice of the National Development and Reform Commission and the National Energy Administration on Printing and Distributing the Responsibility Weights for Renewable Electricity Consumption in Each Provincial-level Administrative Region in 2020" proposes: On the basis of local calculations, the responsibility weights for renewable electricity consumption in 2020 in each provincial-level administrative region are proposed as a whole, with both the total consumption responsibility weight and the non-hydropower consumption responsibility weight; each weight is divided into two grades: minimum and incentive。
The Catalogue for the Guidance of Industrial Structure Adjustment (2019 version) lists "technology development and application of hydrogen energy, wind power and photovoltaic power generation complementary system technology", "5MW and above offshore wind turbine technology development and equipment manufacturing", "offshore wind farm construction and equipment and submarine cable manufacturing" as encouraged technologies, equipment or industries.
2. Market analysis
(1) Overview of the global wind power industry
At present, more than 100 countries around the world have begun to develop wind power. According to the statistics of the Global Wind Energy Council, the cumulative installed capacity of global wind power increased from 23.9GW to 650.6GW from 2001 to 2019, with a compound annual growth rate of 20.15%; it is expected that by 2020, the cumulative installed capacity of global wind power will reach 726.7GW, and the compound annual growth rate of 2016-2020 will reach 10.47%.
(2) The offshore wind power market segment has obvious inherent advantages and great market development potential
Today, global wind power development is still dominated by onshore wind power, but offshore wind power has the advantages of abundant resources, high power generation efficiency, proximity to the load center, small land resource occupation, and low difficulty in large-scale development, which is widely regarded as the future development direction of the power generation industry. In 2000, Denmark built the world's first commercial offshore wind farm in the Gulf of Copenhagen, after which offshore wind power entered the industrial research and development and production stage. In recent years, with the gradual maturity of global offshore wind power technology and the emergence of new markets, the number of developable offshore wind power regions in the world is increasing, and the industry has maintained rapid development. According to the Global Wind Energy Council, the cumulative annual compound annual growth rate of offshore wind power installed capacity in the world from 2010 to 2019 exceeded 28%. In 2019, the cumulative installed capacity of global offshore wind power reached 29.1GW, an increase of about 26% year-on-year, accounting for about 4% of the global cumulative installed capacity of wind power; the new installed capacity of global offshore wind power was 6.1GW, an increase of about 41% over 2018, accounting for 10% of the new installed capacity of global wind power。
(3) The installed scale of wind power in the mainland continues to expand
The construction of wind farms in mainland China began in the 1980s, and in the following ten years, it has experienced the initial demonstration stage and the industrialization establishment stage, and the installed capacity has grown steadily and slowly. Since 2003, with the bidding of the first phase of the wind power concession project of the National Development and Reform Commission, the construction of wind farms has entered the stage of scale and localization, and the installed capacity has grown rapidly. In particular, since 2006, the installed capacity has doubled for four consecutive years, forming an explosive growth.
In recent years, the mainland wind power industry has continued to develop rapidly, thanks to clear planning and continuous upgrading of development goals. According to the statistics of The China Wind Energy Association, in 2018, the newly installed capacity of wind power in the mainland was 21.1GW, an increase of 7.11% year-on-year; the cumulative installed capacity of wind power in the mainland reached 209.5GW at the end of 2018, an increase of 11.20% year-on-year; the cumulative installed capacity of wind power in the mainland increased from about 2% in 2000 to about 35% in 2018, far exceeding the global average, and has become the largest and fastest growing market for wind power generation in the world.
3. Analysis of competitive enterprises
Figure 1: A list of the main competitors in the industry and their products
Data source: the company's official website, annual report, etc., Shangpu Huatai consulting and collation
4. Risk analysis
(1) The risk of industrial policy adjustment
Under the comprehensive influence of the dwindling stock of traditional fossil energy resources, the global emphasis on ecological environmental protection and efforts to reduce carbon emissions, wind energy as an efficient and clean new energy source has been increasingly valued by governments around the world, including mainland China, and governments around the world have introduced relevant industrial policies to encourage the development of the wind power industry. The company's business at this stage is concentrated in China, and the domestic wind power industry is greatly affected by national policies, if the future of the state's support for the overall scale of development and construction of the wind power industry, feed-in tariff protection and various preferential tax policies and other aspects of the reduction, will have a certain adverse impact on the development of wind power-related industries, thereby affecting the company's operating income and profit level, the company has the risk of adversely affecting the operating performance due to industrial policy adjustments.
(2) Risk of raw material price fluctuations
During the reporting period, the main raw materials required for the company's production include steel plates, flanges, etc., and direct materials account for about 80% of the main business costs, which is a relatively high proportion. The pricing of the company's sales contract is determined by reference to raw material prices, product specifications and models, process difficulties, market competition, etc., but due to factors such as capital arrangements and project implementation progress, there are differences between the procurement point of steel raw materials in some projects of the company and the quotation point of the sales contract. In recent years, the steel market price has fluctuated to a certain extent due to changes in supply and demand in domestic and foreign markets, which has had a certain impact on the gross profit margin and overall operating performance of some projects of the company during the reporting period. If the price of the above raw materials fluctuates significantly in the future, it may lead to a large change in the company's production costs, which in turn will affect the company's profit level.
(3) The risk of project postponement and change
Wind power generation investment is large, the cycle is long, the investment decision-making process is long, and there are many problems in site consolidation, equipment procurement, transportation and other aspects involved in the project implementation process, and there are many uncertainties that may lead to the postponement and change of the project. The company's business scale is growing rapidly, the inventory level is high, the occupation of funds is more, if the customer project delays the delivery time lags, it will make the company's capital return speed reduce, the cost of funds increased. Therefore, the postponement and change of customer engineering projects will have a certain adverse impact on the company's operating performance.
This excerpt is from the "Wind Power Equipment Production Project Investment Feasibility Study Report" issued by Shangpu Huatai,