20180629-广发证券_香港_-2H18_A-Share_Power_Equipment_Outlook_3页_394kb

报告摘要

2H18 A-Share Power Equipment Outlook Summary

Core Content

This report provides an outlook on the A-share power equipment industry for the second half of 2018. It highlights the positive trends in the industrial control sector, the growth in new energy consumption, and the impact of electricity market reforms. The analysis also covers the development of national brands and the potential for SOE reform and asset securitization to drive industry growth.

Main Points

1. Industrial Control Industry Growth

Positive Trends: The industrial control industry has shown strong growth, with China's manufacturing PMI remaining above 50% in 2018.
Revenue Growth: Major players in the industry have reported revenue growth of over 20% in 1Q18.
Future Outlook: The industry is expected to maintain mid/high growth for the next 2-3 years due to factors such as industry upgrades, an aging population, and rising wage costs.
Market Segments: Project-based market will recover due to supply-side reforms and manufacturing upgrades, while OEM market will grow rapidly driven by consumption and emerging industries.

2. New Energy Consumption and Power Equipment

Power Consumption: In 1Q18, China's domestic power consumption reached 1.59 trillion kWh, up 9.83% YoY.
New Energy Growth: On-grid electricity from wind and solar power increased by 4.8% and 1.8% respectively.
Infrastructure Demand: The growth in power generation has increased demand for transmission and distribution network upgrades and smart grid technologies.
Challenges: Instability in new energy generation negatively impacts grid quality and protection, creating a need for improved power consumption infrastructure.

3. Electricity Market Reforms

Market Trading Centers: All provinces in mainland China have established electricity trading centers, with a rising proportion of market transactions.
Spot and Ancillary Markets: Spot electricity and ancillary services markets are being developed, with Zhejiang's spot market expected to launch in 1H19 and Gansu's ancillary services market starting in April 2018.
Pilot Distribution Networks: The third batch of 97 new pilot distribution networks has been introduced, increasing the total number to 292.

4. SOE Reform and Asset Securitization

Performance Tying: Recent reforms tie worker salaries in SOEs to individual performance, potentially improving operational efficiency.
Asset Restructuring: NARI Technology has completed asset restructuring, and the State Grid continues with asset securitization.
Benefits: Asset securitization allows for the injection of high-quality assets into listed companies and introduces strategic investors, enhancing company development.

Investment Recommendations

Industrial Automation: Suggested to watch Inovance Technology (300124 CH), Xinje Electric (603416 CH), Hongfa Technology (600885 CH), Chint Electronics (601877 CH), Liangxin Electrical (002706 CH), and Megmeet Electrical (002851 CH).
New Energy Consumption: NARI Technology (600406 CH) is highlighted as a leading company in the field of new energy power consumption.
New Distribution Networks and Comprehensive Energy Services: Wisdom System (002090 CH) is recommended as a leading company in this area.

Key Risks

Manufacturing Recovery: If the manufacturing industry's recovery is less than expected, it could negatively impact the industry.
Import Substitution: If the pace of import substitution is slower than anticipated, it may affect growth.
Grid Investment Decline: A decline in grid investment could limit growth opportunities.
Electricity Market Reforms: If electricity market reforms fall short of expectations, it may affect the sector's performance.

Sector and Company Ratings

Sector Ratings

Positive: Sector expected to outperform the benchmark by more than 10%.
Neutral: Sector relative performance ranges between -10% and 10%.
Cautious: Sector expected to underperform the benchmark by more than 10%.

Company Ratings

Buy: Stock expected to outperform the benchmark by more than 15%.
Accumulate: Stock expected to outperform the benchmark by more than 5% but not more than 15%.
Hold: Expected stock relative performance ranges between -5% and 5%.
Underperform: Stock expected to underperform the benchmark by more than 5%.

Disclaimer and Legal Information

The report is for informational purposes only and does not constitute an offer to buy or sell securities.
No liability is accepted for losses arising from the use of the report.
The report may contain recommendations that differ from those of the proprietary trading division.
The views and opinions expressed are those of the analysts and not necessarily those of GF Securities (Hong Kong) or its affiliates.

Copyright

This report is copyrighted by GF Securities (Hong Kong) Brokerage Limited.
No part of the materials may be copied, reproduced, or re-disseminated without prior written consent.

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