Power equipment is mainly divided into power station equipment, power transmission and transformation primary equipment, secondary equipment and power environmental protection equipment. Among them, power investment mainly forms the demand for power station equipment and power environmental protection. The demand for primary and secondary equipment for power transmission and transformation includes investment from power grid and investment in fixed assets. The main raw material for the power equipment industry is steel. The country's power investment policy, the development of the steel industry and price fluctuations will have a profound impact on the power equipment industry. To gain profits above the industry average, power equipment companies need not only to have industry-leading technology, but also to use hedging and accurately predict fluctuations in raw material prices to control manufacturing costs and increase profit margins.

 

                                 

      Affected by the national power investment policy, power plant equipment manufacturers have huge orders in their hands. The production plan has been scheduled to be from 2006 to 2007, and the growth trend after 2007 will gradually slow down. The power transmission and transformation primary equipment, secondary equipment and power environmental protection equipment manufacturers are affected by the power construction cycle and the state's industrial policies to strengthen environmental protection construction, and their growth cycle is longer than that of power station manufacturers. Therefore, the power equipment industry will maintain a high growth rate in the next two to three years.

 

                                 

      In 2005, the country's electricity supply is still relatively tight, and the state's investment in power fixed assets construction is further accelerated. It is expected that the sales revenue of the power generation equipment sub-sector will maintain a rapid growth of around 50%, while the sales revenue of the secondary equipment sub-sector will remain around 25%. Rapid growth. From the perspective of investment, the investment in fixed assets of electric power is mainly invested in the "short, flat and fast" thermal power station project to ease the situation of tight power supply in the country as soon as possible. It is worth noting that China plans to build 40 nuclear power plants in the next 15 years. At present, the initial plan for China's nuclear power development plan is that by 2020, nuclear power will reach an installed capacity of about 36 million kilowatts, accounting for 4% of the country's installed power capacity. Therefore, nuclear power generation related equipment companies are worthy of attention.

                 

      1. Power generation equipment

 

                                 

      In terms of power generation equipment, the main products are power station boilers and steam turbines for thermal power generation, and hydroelectric generators for hydroelectric power generation. In the past 20 years, China's power generation equipment industry, as a cyclical industry, has shown its ups and downs in the industry under the planned economic system of "power station project construction administrative approval". Since large-scale power generation equipment is a capital-intensive, technology-intensive industry, industry barriers are high. Therefore, at present, the competition pattern of domestic large-scale power generation equipment industry is basically stable. The market is dominated by Dongfang Electric Group (including Dongfang Motor Factory, Dongfang Boiler Factory), Shanghai Electric Group (including Shanghai Boiler Factory, Shanghai Steam Turbine Plant) and Harbin Electric Group. Although the international generator manufacturing giants Alstom and Siemens have also established joint ventures or wholly-owned companies in China, the current market share is not large.

 

                                 

      The main raw material for power generation equipment production is sheet metal. The cost of steel is about 40% to 60% of the production cost. The rise of sheet price is not conducive to the development of power generation equipment industry. Judging from the orders of power generation equipment manufacturers, the delivery time is concentrated in 2005 and 2006, and the delivery orders after 2007 are few. Under the influence of macroeconomic regulation and control in 2005, power generation equipment manufacturing enterprises are not optimistic about the orders received after 2006. With the end of the climax of power plant construction in 2006, it is expected that a new round of industry depression will emerge. The effect of macro-control measures on the blind construction of power station projects started in November 2004 was gradually reflected. With the cessation of a series of illegal orders and the basic stability of the construction of power station projects, the power generation equipment industry is facing greater uncertainty after 2005. Sex. In the overheated situation of the power generation equipment industry, despite the significant increase in the performance of listed companies, it still maintains a neutral rating. The listed companies in the power generation equipment sub-sector mainly include Huaguang, Dongfang Boiler, Shanghai Power and Dongfang Motor.

                 

      2, power primary equipment

 

                                 

      The overall growth of the power primary equipment industry is good. China's electric power primary equipment industry is mainly divided into sub-sectors such as transformers and switchgear. At present, the transformer industry maintains a rapid growth momentum, but the silicon steel sheet of raw materials used in the transformer industry is in short supply, and there is no new capacity to be put into production in 2005. The price is still rising, and the gross profit margin of transformer products will still be under great pressure. The company's performance has fallen sharply, so investors are advised to evade the industry. The current industrial structure of China's transformer market has remained generally stable: in the case of extra large ultra-high voltage, the only manufacturers capable of producing 500kV transformers are Shenyang Transformer Factory, Xi'an Transformer Factory and Tianwei Baobian. Among the more than 100 transformer manufacturers in China, there are 12 manufacturers capable of producing 220kV transformers. Among the transformer products below 220kV, there are many manufacturers and the competition is fierce. The listed companies in the transformer sub-sector mainly include five companies, namely, TBEA, Tianwei Baobian, CITIC Electric and Galaxy Technology. Siyuan Electric is mainly engaged in the production of arc suppression coil products. The market and production raw materials of the products are very similar to those of transformers. Compare it with the transformer listed company.

                 

      The power primary switchgear is mainly composed of isolation switch, circuit breaker, grounding switch, current transformer and other series products. After the 1980s, with the improvement of the international manufacturing process, the switch, circuit breaker, grounding switch and current will be isolated. Products such as transformers are combined to create a successful closed combination device (GIS). Due to its high voltage, large capacity and miniaturization, GIS products are widely used in current high voltage switchgear. Among them, the high-voltage switch industry has performed relatively well, and has formed a relatively high monopoly pattern. However, the production cost is extremely sensitive to the price fluctuation of non-ferrous metals. At present, only a few manufacturers in China have new GIS product production technology, so the number of listed companies suitable for investment is very high. less. In the medium and low-voltage switch products, because of the low technical content, the large number of production enterprises, the excessive production capacity, and the fierce competition, the manufacturing enterprises are facing long-term difficulties, and no company is listed at present.

 

                                 

      The production cost of the high-voltage switch accounts for 88% of the raw materials, while the copper and aluminum insulation parts account for 80% of the raw material cost. Therefore, the production cost is extremely sensitive to the price fluctuation of non-ferrous metals. At the beginning of the year, the procurement of power equipment buyers used the pricing model of the price of the product to pass the risk of raw material price fluctuations to the equipment supplier. The listed companies in the high-voltage switchgear sub-sector are mainly Pinggao Electric, Tianyu Electric, Changzheng Electric, and Great Wall Electric. In addition to Pinggao Electric's ability to produce high-pressure GIS products, the other listed companies are mainly based on traditional products, with low investment value.

                 

      3. Power secondary equipment

 

                                 

      The secondary power equipment is an automatic system and equipment for monitoring and protecting primary power equipment. It depends on the primary equipment to a certain extent, and there is a certain lag effect on the market demand of the primary equipment. Its products mainly include three categories: main equipment protection automation system, power grid dispatching automation system and substation automation system.

 

                                 

      In the development of China's power secondary equipment industry over the past 30 years, after fierce market competition and survival of the fittest, the core enterprise group with production scale and competitive advantage has emerged, and the barriers to entry have been significantly improved. We will market the power secondary equipment industry. The competitive landscape is characterized by monopolistic competition.

 

                                 

      The market competition pattern of the three major sub-products of power secondary equipment is as follows: First, the power grid dispatching automation class. China's power grid includes national adjustment, network adjustment, provincial adjustment, land adjustment, and county adjustment. Almost all of the above-mentioned and large-scale dispatching automation system equipment adopts imported equipment. In terms of high-end product national adjustment, network adjustment and provincial adjustment, the domestic company is in a monopolistic competition situation between the two companies, namely Guodian Nanrui and Beijing Kedong Power Control System Co., Ltd. Second, the substation automation market is mainly divided by Guodian NARI, Guodian Nanzi, Beijing Sifang, Xuji Group and other enterprises. Guodian NARI's substation automation products have a domestic market share of 50-60%, and are concentrated in high-end substation automation products with a gross profit margin of around 50%. Third, the main equipment protection automation: In this category of products, due to historical reasons, Guodian South has a strong competitive strength, and in the 1990s once occupied more than 60% of the domestic market. However, after 2000, the market share of products of Guodian NARI and other companies gradually increased.

 

                                 

      At present, there are high barriers to competition in the market. In addition to several well-known international companies, only a few companies such as Guodian NARI, Beijing Sifang, Guodian Nanzi, Xuji Electric and Huali Technology competed and the products were maintained high. Gross profit margin. In terms of industry rankings, Guodian NARI is a well-deserved leader. At present, the gross profit margin of secondary power equipment products has increased slightly. Guodian NARI and Guodian Nanzi are both good investment products with core competitiveness and rapid growth in performance.