STARLIGHT

The High Prosperity of the New Energy Industry Continues, and the Development of Energy Storage Has Become a New Focus

Source|21st Century Business Herald

    With the concept of energy saving and carbon reduction gradually gaining popularity, reducing carbon emissions, implementing energy revolution, and industrial revolution have become topics for the whole people. Under the goal of "carbon peaking and carbon neutrality", more and more companies in the industrial chain have seized the opportunity and ushered in a period of rapid development.

    The 21st Century Business Herald reporter noticed that in the past two years, the new energy industry, including the new energy vehicle industry chain, photovoltaics, and wind power, has become the most promising area for many investors. However, recently affected by factors such as the macro market environment, the new energy industry has entered a short-term adjustment.

    In the opinion of market participants, the long-term growth logic of the new energy industry is still strong, and the periodic adjustment makes the valuation of the new energy industry more cost-effective, and may usher in a better layout opportunity. In the future, with the strong support of policies, the scale of my country's new energy market is expected to develop rapidly, and the industry's prosperity will continue to rise.

    On the whole, the short-term market adjustment of the new energy sector is mainly affected by sentiment, the industry boom continues to improve, and the fundamentals of related listed companies are also in good condition.

    Taking the new energy vehicle industry chain as an example, public data shows that in August, the global production and sales of new energy vehicles hit a new record high, with 691,000 and 666,000 vehicles completed respectively, an increase of 1.2 times and 1 times year-on-year respectively. Among them, the total sales of new energy vehicles in China reached 530,000 units, a year-on-year increase of 111.4%.

    "The high demand for new energy vehicles will continue in 2022. It is expected that domestic production and sales will reach 6.5-7 million units, nearly doubling the growth rate, and once again exceeding the expectations at the beginning of the year. Consumption-driven is the core driving force for the continuous explosion in recent years. Outlook From the perspective of 2023, domestic new models will continue to be produced, and sales are expected to reach 8.5-9 million units, maintaining a growth rate of about 30%." A well-known brokerage e-new team pointed out.

    In the context of high industry prosperity, the performance of power battery industry chain companies has also continued to shine.

    According to SNE data, the domestic power battery leader CATL's overseas market share has reached 6.5% and 12.9% in 2020 and 2021, and 17% and 19% in the first and second quarters of 2022, respectively.Market participants expect the increase in the European market share to be even more pronounced.

    In the first half of this year, CATL achieved revenue of 112.971 billion yuan, a year-on-year increase of 156.32%; net profit attributable to shareholders of listed companies was 8.168 billion yuan, a year-on-year increase of 82.17%

    CATL has also reached further supply agreements with overseas automotive companies such as BMW, Ford, Solaris, and Arun Plus, and announced the expansion of the second European factory of 100GWh in Hungary, and the establishment of a ternary industrial chain integration base in Indonesia, the process of globalization is further accelerated.

    In addition, some institutions predict that the gross profit margin of lithium batteries will be under pressure due to the impact of price increases in the middle and upper reaches this year. However, considering that since 2H21, the CAPEX growth rate of the lithium battery industry chain has diverged, and the growth rate of CAPEX in the middle and upstream materials and resources has gradually overtaken the lithium battery link, or will drive the reversal of the bargaining power of the industry chain, as many mid-to-upstream links enter the downturn cycle in the first half of 2022, prices are expected to continue to decline, and lithium batteries are expected to usher in a mid-term bottoming out of gross profit margins.

    In addition to the vigorous development of power batteries, the application scenarios of lithium batteries have been further expanded, and energy storage is an application scenario that has grown significantly this year.

    Investment institutions predict that the domestic independent energy storage business model has basically taken shape. In the future, the cost reduction of renewable energy and the further improvement of electricity market-oriented transactions will enable the transformation of energy storage from zero to one. In 2022, the global installed capacity of energy storage is expected to reach 50-60GWh, and the demand in the industrial chain is expected to reach 90-100GWh, achieving double growth; the energy storage industry is expected to maintain a compound growth of 70%-80% from 2023 to 2025, which will be the demand for lithium batteries important increment.

    The performance of related listed companies also performed well. For example, Sungrow, the leader of photovoltaic inverters, achieved main revenue of 12.281 billion yuan in the first half of the year, up 49.59% year-on-year; net profit attributable to the parent was 900 million yuan, up 18.95% year-on-year;The deduction of non-net profit was 795 million yuan, a year-on-year increase of 10.52%; in the second quarter of 2022, the company's single-quarter main income was 7.714 billion yuan, a year-on-year increase of 58.6%; the single-quarter net profit attributable to the parent was 490 million yuan, a year-on-year increase of 32.21%.

    From the perspective of revenue growth, energy storage has become an important source of Sungrow's performance growth. In terms of business structure, photovoltaic inverter revenue in the first half of the year accounted for 48.31%, a year-on-year increase of 65%; energy storage revenue accounted for 19.42%, a year-on-year growth rate of 159.33%.

    Specifically for the second half of the year, at the investor briefing on September 20th, Cao Renxian, Chairman of Sungrow, said that the company’s orders for photovoltaic inverters and  energy storage in the second half of the year are full, and the current production capacity basically meets the demand for orders, and will further expand production capacity in the future.  In 2021, the company has fixed a capital increase of 3.6 billion yuan for the company's 100GW new energy power generation equipment manufacturing base project, R&D innovation center expansion project, global marketing service system construction project and supplementary working capital.

    Cao Renxian said that due to the rapid rise in lithium carbonate prices recently, demand has been suppressed, but in the long run, the gross profit margin of the energy storage business has rebounded, and he is still full of confidence in the future of the energy storage business.

    Regarding the new development direction and goals in the next three years, Sungrow revealed that the new direction is to focus on the development of energy storage, distributed energy, etc., and the goal is to maintain the leading level in the industry.