China Fund News reporter Nanshen
The energy storage sector, which rose 5% on Monday, opened high and fell back today, but the 100 billion power construction giant China Power Construction opened high in the morning and continued to impact the rise and stop, closing up 8%, and the two-day cumulative surge of 19%.
This is not unrelated to a message in the early session! China Power Construction said on the interactive platform that "it is true that Shandong Electric Power Construction, a subsidiary of China Power Construction Group, and Huawei signed the world's largest energy storage project (1300MW)". However, Shandong Power Construction and China Power Construction are brother companies and are controlled by power construction group.
At present, China Power Construction's share in the planning and design of domestic pumped storage accounts for about 90%, and the share of construction projects it undertakes accounts for about 80%, which belongs to the absolute leader in this field. China Power Construction has been strong since mid-July, rising 150% in two months. On September 28, the company announced that it intends to divest the assets of the real estate sector and place the assets related to the high-quality power grid auxiliary industry of the Power Construction Group.
Shandong Power Construction joined hands with Huawei to amplify the move
On October 22, some investors asked questions on the China Power Construction Investor Interactive Platform: Shandong Power Construction, a subsidiary of Power Construction Group, signed the world's largest energy storage project (1300MW) with Huawei. At about 10 o'clock on October 26, China Power Construction replied to confirm the news.
As early as October 16, Huawei officially announced that at the 2021 Global Digital Energy Summit held in Dubai, Huawei Digital Energy and Shandong Power Construction Third Company signed a contract for the energy storage project of Saudi Arabia's Red Sea New City. With an energy storage scale of 1300MWh, the project is by far the world's largest energy storage project and the world's largest off-grid energy storage project. According to reports, the Red Sea New City energy storage project is a key project included in saudi Arabia's "2030 Vision" plan, the developer is ACWA Power, and the EPC general contractor is Shandong Electric Power Construction Third Company. Red Sea New City, located on the Red Sea coast, is also known as the "new generation of cities", in the future, the entire city will be completely powered by new energy.
Stimulated by the confirmation of the above news, China Power Construction, which was already high and high, quickly rushed up and stopped, which was the second consecutive trading day. Not too early to the end of the end with the entire energy storage sector fell, China Power Construction fried board, in the afternoon there was an attempt to seal back the action, but dragged by the plate ultimately failed to succeed, to rise 8.08% to close, two trading days cumulative increase of 19%, the market value from the beginning of 100 billion to 125 billion yuan.
According to the data of Tianyancha, in fact, shandong power construction and power construction of the world's largest energy storage project signed this time are brother companies, and both are controlled enterprises of China Power Construction Group, of which Shandong Power Construction is a wholly-owned subsidiary and China Power Construction is an absolute holding subsidiary holding 58% of the shares.
Up more than 110% since July
In fact, as the absolute main force in the field of domestic pumped storage construction, China Power Construction has continued to strengthen since mid-July.
On July 12, China Power Construction, which had been relatively flat, suddenly increased its volume by more than three times, and the zhongyang closed the market on the same day, and by September 23, it experienced a total of five waves of rise, an increase of more than 150%. At the end of September, with the large-scale adjustment of the entire new energy sector, China Power Construction also pulled back more than 35%, until it rebounded again in recent trading days.
According to public information, China Power Construction is the absolute leader in the field of domestic pumped storage construction, accounting for about 90% of the domestic pumped storage planning and design, and about 80% of the construction project share. In the past decade, the energy storage industry is currently in the early stages of commercialization and large-scale application, and with the introduction of energy storage-related policies, the company is undoubtedly a great beneficiary.
In May this year, the National Development and Reform Commission and the National Energy Administration issued the Guiding Opinions on Accelerating the Development of New Energy Storage (Draft for Comment), proposing for the first time that by 2025, the installed capacity of new energy storage will reach more than 30 million kilowatts (30GW). In terms of pumped storage, it is planned to start construction in 2021-2035 and the scale of grid connection is: 180GW, 80GW and 40GW respectively during the 14th Five-Year Plan, 15th Five-Year Plan and 16th Five-Year Plan, with a total of 62GW, 200GW and 300GW.
At present, the company's operation is relatively stable, China Power Construction 2021 semi-annual report shows that the company achieved operating income of 203.051 billion yuan in the first half of the year, an increase of 26.40% year-on-year; achieved a net profit attributable to shareholders of listed companies of 4.518 billion yuan, an increase of 16.45% year-on-year.
According to the announcement on October 16, the total amount of new contracts signed by China Power Construction was about RMB520.591 billion, an increase of 3.61% year-on-year. Among them, the amount of newly signed contracts in China was about RMB428.932 billion, an increase of 15.83% year-on-year, and the amount of newly signed contracts abroad was equivalent to about RMB91.659 billion, a year-on-year decrease of 30.63%. The total amount of new contracts signed for water conservancy and power business at home and abroad is about RMB207.187 billion.
Divestiture of real estate into grid assets
At present, the company is divesting its real estate business and focusing on its main power-related business.
On September 28, China Power Construction announced that in order to fulfill the relevant commitments of the competition between China Power Construction and its controlling shareholder, Power Construction Group, the company intends to replace the assets of the real estate sector held by china with the assets related to the high-quality power grid auxiliary industry held by power construction group, and the difference will be made up in cash.
At present, China Power Construction has four major businesses, in addition to the two major businesses of engineering contracting and survey and design, power investment and operation, there are also real estate development, equipment manufacturing and leasing business. From the perspective of the four major business scopes, the two businesses of power investment and operation, equipment manufacturing and leasing are related to the core business of engineering contracting and survey and design, which belongs to the extension of the industrial chain, and only the real estate development business and its core business are not highly related.
In recent years, the company's core business revenue has accounted for more than 80%. In 2019 and 2020, the company's engineering contracting and survey and design business revenue was 282.868 billion yuan and 332.376 billion yuan respectively, accounting for 81.35% and 82.85% of the company's main operating income. In the first half of this year, the company's revenue from this business was 169.868 billion yuan, accounting for 83.66%. The company's power investment and operation business is stable, from 2019 to the first half of this year, its realized revenue was 16.958 billion yuan, 18.856 billion yuan and 9.742 billion yuan, accounting for about 4.8%.
With the injection of power grid auxiliary assets into power grids, the proportion of power grid-related main business assets of China Power Construction has further increased.
Everbright Securities said that after the divestiture of the real estate business, the drag on the company's gross profit margin and net profit of the real estate will be eliminated. On the other hand, due to the tight financing environment of real estate enterprises, the equity financing of housing-related central enterprises may be restricted to a certain extent, and the divestiture of real estate business will help the company broaden financing channels, or will provide an important source of funds for the company's investment in new energy power generation operating assets during the "14th Five-Year Plan" period.
Tianfeng Securities Research Report believes that the company's transformation and upgrading prospects are worth looking forward to, the leading position in the field of water conservancy and hydropower construction is stable, and the follow-up benefits are accelerated and diversified expansion of pumped storage construction, while the quality of power operation assets is better, the scale of the 14th Five-Year Plan is increased or accelerated, and the proportion of new energy or further improved to optimize asset quality, "optimistic about the company's transformation results and growth potential", "maintain the company's key recommendations, maintain the "buy" rating".
EDIT: Captain
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