Riyue Co., Ltd. (603218): Strategic layout of sea wind power finishing fully opens up growth space

Event: Sun and Moon announced the 14th session of the 4th Board of Directors, which decided to issue convertible bonds with a size not exceeding USD 1.2 billion, 8 of which.

4 million US dollars to build 12 large-scale offshore wind power key component finishing production line construction projects, the remaining 3.

6 million plans to supplement working capital.

Guoxindian’s new perspective: 1) The large-scale offshore wind power component finishing capacity is a scarce capacity worldwide, and it is a substitute for the current large-scale offshore wind turbine unit casting production of more than 8MW.
2) Riyue’s products are currently favored by the world’s top ten wind turbine manufacturers, and the utilization of future production capacity will be effectively guaranteed.

It is expected that the company will reach a 40-inch casting capacity by the end of 2019. The existing finishing capacity is 10 inserts, which can fully digest and add 12 intervention finishing capabilities.

3) The company follows the development trend of the industry and deepens the “two seas strategy” of the landing company: the internal offshore wind power currently has more than 10GW of projects under construction and under construction, and is facing the urgent point of construction and grid connection to maintain the approved electricity price; the cost of electricity in the future will decrease rapidlyThe domestic market will trigger a larger demand for installed capacity, and the market has a bright future.

In the past year, offshore assemblers were mainly above 4MW, and European offshore wind power has entered the 8MW-10MW stage, and it will be further increased to 12MW in the future.

In 2019, OEMs represented by Shanghai Electric, Goldwind Technology, and Mingyang Intelligent began to enter small batch commercial applications of offshore models over 6MW.

In the first year of commercialization of large-scale offshore wind power units, Riyue Co., Ltd. will arrange the finishing capacity in advance, firmly grasp the market opportunity, and consolidate its leading position.

4) Risk warning: due to the industry’s development speed or the company’s customer cooperation is not up to expectations, the company’s finishing capacity cannot be fully utilized, and the raised funds have reached the expected value.

5) Investment suggestion: Assuming that the convertible bonds are merged through the company’s shareholder meeting and approved by the CSRC, the finishing costs of large offshore wind power components can reach more than 7,000 yuan / ton, and equipment depreciation, labor and material costs over one yeartotal.

5-1.

8 trillion, 12-inch refining processing capacity (among which wind turbine hub base processing is expected to be 10 spindles) will contribute 4 to the company.

4-4.

The 700 million profit after tax will greatly improve the company’s performance in 2020-2021, and it is recommended to pay active attention.

Continue to maintain the profit forecast, and expect to return to the net profit of the mother in 19-21 4.

90/8.

04/9.

2.3 billion, corresponding to an EPS of 1.

20/1.

97/2.

27 yuan, corresponding to the current total PE of 19.

2/11.

7/10.

2x, maintain “Buy” rating.

Comment: The large-scale offshore wind power component finishing business has brought very high marginal ROE. In the past ten years, offshore machine assembly machines have mainly been above 4MW, and the European offshore wind power market has entered the 8MW-10MW stage, and it will be further increased to 12MW in the future.high.

At present, the installed capacity before the sea is less than 4MW. From 2019, the complete machine manufacturers represented by Shanghai Electric, Goldwind Technology, and Mingyang Intelligent have begun to enter a small number of small-scale commercial applications above 6MW.

The commercial application of the large-capacity offshore wind turbines on which Riyue Co., Ltd. has been deployed in the first year of the year, firmly grasps the market opportunity and consolidates its leading position.

The current market price of offshore wind power castings is 1.

50,000 yuan-1.

80,000 yuan / ton, a premium of more than 5,000-8000 yuan / ton over the morning product. The core of the premium is the difference in finishing costs. The finishing capacity has a very high marginal performance contribution capability.

The large-scale offshore wind power component finishing business is the exclusive blue ocean market wind power casting finishing capability that only exclusive wind turbine casting enterprises can enjoy. The casting power must be matched with the casting capability. Therefore, the control of these businesses is entirely in the hands of casting manufacturers.

At present, the supply of high-quality wind power castings is tight, and the outbreak of offshore wind power demand has further tested the supply capacity of a few high-quality casting manufacturers.

Domestic market: Compared with onshore wind power classification, the energy utilization rate of offshore wind energy resources should be 20% -40% higher. It has the advantages of high wind speed, large power, stable operation, and suitable for large-scale development. According to preliminary investigation by the Chinese Academy of Meteorological SciencesThere are 750 GW of wind energy reserves that can be developed and utilized near offshore.

In December 2014, the National Energy Administration issued the National Offshore Wind Power Development and Construction Plan (2014-2016), which explicitly cited 44 projects with a total approved capacity of 10.

5GW.

China’s “Thirteenth Five-Year Plan” for wind power development proposes that 2016-2020 will actively and steadily promote offshore wind power construction, focusing on the promotion of offshore wind power construction in Jiangsu, Zhejiang, Fujian, Guangdong and other provinces, and construction of offshore wind power in the four provinces mentioned above by 2020.The scales are all over one million kilowatts; in 2020, the country will strive to achieve the construction scale of 10GW, and transform the grid-connected capacity from 1 in 2015.03GW increased to more than 5GW.

The corresponding demand for wind towers suitable for offshore 3MW and above units is in a period of rapid development.

The current offshore wind power started late. In 2007, the first offshore wind turbine was hoisted on the Bohai Bay oil drilling platform. Only in 2017 did it begin to achieve large-scale development with an annual installed capacity exceeding 1GW.

But overall, it will take only five years to grow rapidly.

According to industry statistics, the annual bidding capacity for offshore wind power in 2018 is about 5GW, an annual increase of 60%.

Finally, by the end of 2018, China’s offshore wind power gradually installed about 3.

6GW, behind the United Kingdom and Germany, ranking third in the world. Completed grid-connected projects are concentrated in Jiangsu and Shanghai. At the same time, the progress of offshore wind power development in Fujian, Guangdong, and Zhejiang has accelerated significantly.6.

6GW.

At present, offshore wind power has basically reached the 南京桑拿网 conditions for large-scale development. The next stage must be through technological innovation and large-scale development, supplement the dependence as soon as possible, and achieve rapid development through marketization.

With reference to the experience of developing offshore wind power in Europe, the large-scale and large-scale generating units have a significant effect on reducing the cost of offshore wind power.

Currently domestic 2.

5-4MW offshore wind turbine technology has matured, 5-6MW units have been officially applied in the market in batches, and new high-power wind turbines are being replaced by small and medium-sized wind turbines transitioning from onshore units.

In addition, domestic operators in construction operation, maintenance, survey and design are gradually accumulating corresponding experience.

In the international market, the average 上海夜网论坛 cost of long-term offshore wind power has dropped significantly, especially in northern Europe, a key area for offshore wind power development.

In 2017, the bid price of the Hornsea One wind farm on the northeast coast of England was 57.

50 pounds per megawatt-hour, half the price of the 2015 offshore wind supplement project.

In 2018, there were also zero-supply offshore wind power projects in Germany. In addition to technological advances, the reduction in global wind power cost has a lot to do with the project development model shifting to the bidding-to-grid mechanism.

In terms of technology, the increase of single machine capacity is the key, and the large-scale unit has quickly reduced the construction and operation and maintenance costs of non-fan sections.

At present, the scale of overseas 8MW has been fully commercialized and has become mainstream, and the latest determination has been changed from 9.

5-12MW development.

GE’s 12MW will be hoisted in 2019.

In 2011, a study funded by the European Union indicated that the current materials can support the development and production of units with a capacity of up to 20MW.

There is still room for progress in the future.

Since Mexico and Spain first launched bidding for wind power in 2016, overseas new wind power projects have all turned to the bidding model.

This trend has affected the installed demand in some markets in the short term, and brought significant downward pressure on wind turbine prices in 2017-2018, but also opened up the long-term development space for wind power.

Bidding on the grid promotes the long-term competitiveness of wind power. Bloomberg New Energy predicts that the price of offshore wind power before 2025 will replace 4 cents per kilowatt-hour.

The UK Department of Commerce, Energy and Industry Strategy (BEIS) plans that by 2030, 30% of the UK’s electricity supply will come from offshore wind power. By then, the UK’s offshore wind power installations will increase the current 8GW to 30GW, and the British government will recognize it5.

5.7 billion pounds of subsidies promote industrial development.

Investment suggestion: Actively pay attention to the company’s performance space and further open up due to the improvement of finishing capabilities. Assume that this convertible bond has passed the company’s shareholder meeting and obtained the approval of the China Securities Regulatory Commission.Total labor and material costs.

5-1.

8 ppm, 12 initial finishing capacity (10 spindles scheduled for wind power hub base processing) will contribute 4 to the company.

4-4.

The 700 million profit after tax will greatly improve the company’s performance in 2020-2021, and it is recommended to pay active attention.

Continue to maintain the profit forecast, and expect to return to the net profit of the mother in 19-21 4.

90/8.

04/9.

2.3 billion, corresponding to an EPS of 1.

20/1.

97/2.

27 yuan, corresponding to the current total PE of 19.2/11.

7/10.

2x, maintain “Buy” rating.