In the context of “carbon neutrality”, various measures to support new energy in my country continue to emerge. The growth of several major sectors of new energy, such as lithium power, photovoltaics, wind power, and energy storage, is still continuing. Among them, Wind energy is particularly strong. The prices of most leading stocks have risen sharply. The market has begun to explore small and medium-sized market capitalization stocks with strength and potential. It has been in the forefront of the industry for a long time, and at the same time, the expansion of production capacity brings about future expectations of heavy volume, and the prospects are promising. Guoyuan Securities believes that the 2022 valuation of Industrial Co., Ltd. will be significantly lower than that of comparable companies, and the company’s market value can at least double in the short term.
Recently, there have been waves of good news about wind power. On November 16, the relevant departments issued the “Notice on Early Release of the Local Funds Budget for Renewable Energy Price Additional Subsidy for 2022” and issued a total of 3.88 billion yuan in new energy subsidies, of which the wind power subsidy budget reached 1.55 billion yuan, accounting for This time nearly 40% of the total amount of new energy subsidies. In addition, offshore wind power has also become a key development area of the country’s renewable energy. As of the end of October 2021, the country’s installed power generation capacity was approximately 2.3 billion kilowatts, a year-on-year increase of 9%. Among them, the installed capacity of wind power is about 300 million kilowatts, a year-on-year increase of 30.4%.
Since 2021, domestic wind turbine prices and bidding volumes have exceeded market expectations. Under the long-term goal of “carbon neutrality”, financial support, and technological advancement, the wind power industry is still a good track, focusing on upstream, Top quality stocks in the midstream industry chain. However, the early stage of the wind power sector’s upward trend was very strong. The prices of many stocks have risen several times. The market has begun to explore those small and medium-sized market capitalization stocks with strength and potential, such as the small leader Industrial Co., Ltd. (603928) in the field of wind power casting molding materials driven by wind power. . Recently, the Industrial Development Co., Ltd. has been trending strongly. It hit the daily limit today, and the market outlook may continue to spur upward momentum.
According to statistics from China Foundry Association, Xingye’s main products, self-setting furan resin and cold box resin for casting, have the features of energy saving, high efficiency, and emission reduction. The domestic market share has been ranked second and No. One, industry competition is in an advantageous position.
According to the data, driven by the strong demand of some downstream industries and the company’s increased marketing efforts for new products, the production and sales of the main products of Xingye Co., Ltd. in the first half of the year have increased differently year-on-year, and the sales volume of foundry resin increased by more than 10% year-on-year. The sales volume of phenolic resins increased significantly year-on-year. In addition, Xingye Co., Ltd. is investing in the construction of 300,000 tons of phenolic resin and furan resin production capacity (200,000 tons of phenolic resin will be built in 2 years, and 100,000 tons of furan resin will be built in 4 years). The company’s production capacity is still expected to expand significantly in the next year.
Guoyuan Securities pointed out that Xingye’s furan resin has risen rapidly recently, especially the demand for furan resin for wind power has risen rapidly. Furan resin for wind power is the highest-end product of casting resin, with a higher gross profit margin than normal. At the same time, the furan resin supply is almost rigid, and the company has a strong ability to premium downstream. The company is expected to benefit from the substantial increase in demand for downstream wind power installations, and overall revenue and profitability will improve next year.
According to estimates by the China Foundry Association, each MW fan needs about 20-25 tons of castings as a whole, and about 25-30 kg of self-hardening furan resin or 10-15 kg of cold box resin is needed to produce 1 ton of castings. In 2020, my country’s new grid-connected installed capacity for wind power will reach 71.7GW. It is calculated that my country’s wind power casting market in 2020 will be about 14.34-1.7925 million tons, and then it will be calculated to require 3.59-53.8 million tons of self-hardening furan resin or 1.43 tons of cold box resin. -44,800 tons.
Considering the demand for wind power installations in the future, by 2025, the global installed capacity of wind power will be about 137.6GW, and the demand for wind power castings will be about 3.44 million tons. Considering that China’s wind power castings account for about 80% of the world market share, China’s wind power casting demand in 2025 will be about 267 10,000 tons, the scale of the foundry resin market will increase by about 1.5-2 times.
Guoyuan Securities analyzes that in 2025, wind power castings will become the largest sub-industry of casting resins, driving the CAGR of casting resins to at least 10% in the next five years. The CAGR of less than 3% in the past five years has doubled, and the casting resin industry is undergoing qualitative changes.
At present, the wind power sector has received intensive attention from funds, indicating that the era of “wind power” in the capital market is coming. Industry insiders believe that the current market value of Xingye shares is 3.2 billion yuan (December 1). Excluding the market value of the company’s 1.5% equity in Ronghui Lithium, the market value of the company’s main business is less than 3 billion yuan. It is expected that the company’s revenue in 2022 will be at least Reached 2.5 billion yuan, the net interest rate is assumed to be 12%, and the company’s net profit is 300 million yuan, corresponding to only 10 times the valuation in 2022. At present, the domestic casting resin participating companies are mainly Shengquan Group, Industrial Co., Ltd. and foreign-funded enterprises. Other participants are mostly small and medium-sized enterprises. Therefore, the comparable company in the sub-industry is Shengquan Group. Its current market value is 30.1 billion yuan (December 1) , Haitong Securities gives Shengquan Group a 42-45 times PE valuation range in 2022. Guoyuan Securities analysis believes that the valuation of Industrial Co., Ltd. in 2022 will be significantly lower than that of comparable companies. If the production capacity is in line with expectations, the company’s room for growth is extremely imaginative. The company’s market value can at least double in the short term.