Dagong International: Credit Risk Outlook for the Electrical Equipment Industry in 2020

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  Text: The “post-replenishment era” guided by Dagong’s international policy promotes the structural adjustment of electrical equipment manufacturing enterprises, the transition of new energy from subsidies to parity, and intensified internal competition in various sectors and industries, which will promote leading companies with scale advantages and cost advantages in the industry in the long run.Development, industry concentration will increase.

The short-term internal power supply will remain in excess, but it must bring about the release of high-quality power generation through the advancement of internal supply-side reforms, as well as new needs such as ubiquitous Internet of Things, new energy power, and ultra-high voltage to promote some investment in the future.

It is expected that the power grid investment situation will face downward pressure in 2020, and the credit quality of debt issuance enterprises of electrical equipment manufacturing will generally remain stable.

  Industry policy: In 2019, the scale of power grid investment will decline, and the ubiquitous electric power Internet of Things construction outline will be issued. The grid construction-related industries will face structural adjustments; the wind power and photovoltaic industries will gradually achieve parity on-line access. In the long run, it will promote the scale advantage in the industry.With the development of leading enterprises with cost advantages, the industry concentration will be improved; the impact of the epidemic on the electrical equipment manufacturing industry is mainly concentrated on the project progress and output in the first quarter, and the overall long-term impact is limited.

  Industrial structure: The current stage of power supply is still in a relatively surplus state, and the release of high-quality capacity brought by the advancement of supplementary supply-side reforms has increased the electricity consumption of the whole society; affected by the wind power replacement policy,The installation tide will continue, and the amount of power supply investment will increase.

  Profitability: In 2019, the electrical equipment manufacturing industry is affected by policies. In the future, it will face industry structural adjustment and certain profit uncertainties. It is expected that in 2020, with the stability of grid construction investment and compensation for decline, revenue will continue to grow, butOverall profitability will face some downward pressure.

  Debt financing: Since 2019, the newly issued bonds within the industry have been affected by the increase in the issuance of convertible / exchangeable corporate bonds, the scale of newly issued bonds has increased, and the issuance of medium-term notes has declined. Generally, the medium- and long-term bonds are still the main types.

  Credit quality: In 2019, the level of electrical equipment manufacturing enterprises remained stable, and the number of graded enterprises decreased compared to 2018. It is expected that in 2020, the credit level will remain stable under the same policy.

  Industry policy The scale of grid investment declines in 2019, and the ubiquitous electric power IoT construction outline is released. Structure-related industries will face structural adjustments; the wind power and photovoltaic industries will gradually achieve parity on-grid access. In the long run, it will promote the industry’s scale advantages andThe development of leading enterprises with cost advantages will increase the industry concentration.

  The power consumption of the whole society changes with the level of economic development. The increase in demand for direct power consumption in industry and living has caused the demand for power supply and grid equipment in the society. This demand is met through unified national planning and investment. The amount of investmentFinally, the number of orders for electrical equipment products from downstream enterprises was determined.

The unified national policy planning and guidance can greatly guide the construction investment and other development trends of the electrical equipment manufacturing industry. At the same 佛山桑拿网 time, there are many sub-sectors in the electrical equipment industry. Differences in national policies will lead to demand conditions in different sub-sectors of the electrical equipment industry.difference.
Therefore, the electrical equipment industry is affected by electricity, transmission network construction investment, and the impact of the entire society’s electricity consumption, which is closely related to national policies.

  Affected by the macroeconomic downturn and Sino-U.S. Trade frictions in 2019, the State Grid issued the “Notice on Further Strict Control of Grid Investment” on November 22, 2019, requiring strict control over the scale of grid investment. It is expected that grid investment will be completed in 2019.About 450 billion yuan, down by 7 every year.

96%. It is expected that the national grid investment in 2020 will not exceed the investment scale in 2019, which will have a certain impact on the growth rate of the grid-related equipment and materials industry, and the industry will continue to adjust structurally.

  In addition, on December 10, 2019, State Grid issued the “Outline of the Ubiquitous Electricity IoT Key Construction Tasks in 2020”, which outlines the progress and achievements of the “ubiquitous” constructive tasks in 2019, and proposes that in 2020Focus on 40 key construction tasks in energy ecology, customer service, production operation, business management, enterprise mid-stage, smart IoT, basic support, and technical research directions. State grid investment is related to its own strategic planning for the year. It is expected to be intelligent in 2020.The direction of the power grid and the ubiquitous electric power Internet of Things is tilted, and industries related to power grid construction will face structural adjustment.

  The wind power and photovoltaic industries will gradually achieve parity on-line access. In the long run, it will promote the development of leading enterprises with scale advantages and cost advantages within the industry, and the industry concentration will improve.

On May 30, 2019, the National Energy Administration issued the “Notice on Construction of Wind Power and Photovoltaic Power Generation Projects in 2019”, which set out four general requirements: First, to actively promote the construction of affordable grid-connected projects, and organize the work timeIn turn, the construction of budget parity grid-connected projects will be implemented first, and then the competition allocation that requires supplementary national projects will be carried out. The second is the standard and normative supplementary project competition allocation. The average value of projects that require national supplementation must follow the standard competitive allocation method.Important competition conditions, priority is given to projects with low supplementary intensity and strong decline; third is to comprehensively merge power transmission and consumption conditions, and supplementary construction projects must be at the expense of the power grid’s reduced consumption capacity to avoid new problems of wind and light abandonment.Under the same conditions, priority should be given to guaranteeing the conditions for power transmission and consumption for affordable grid-connected projects; the fourth is to optimize the investment and business environment.

It is expected that the parity and supplementary projects will be maintained at the same time in 2020, and the supplements will still be distributed through competitive declaration. In the long run, the wind power photovoltaic industry will gradually achieve parity on-line access, forcing internal industry companies to reduce costs and increase efficiency, which will promoteThe development of leading enterprises with scale advantages and cost advantages in the industry will increase the concentration of the industry.

  Affected by the epidemic, on January 31, 2020, the Comprehensive Department of the National Energy Administration issued a notice on effectively completing the epidemic prevention and control power protection service and the current power safety production work. The notification required that the enterprise should re-determine a reasonable time limit and cancel the rush.Rush schedule.

In terms of new energy power generation, due to the delay in logistics and the short-term reduction of upstream parts supply, or the extension of some installations, the overall installed delivery volume may have declined slightly in the first quarter.It will continue, and in the long run, the parity project will continue to advance; public health emergencies may have an uncertain impact on overseas trade, but the World Health Organization does not recommend any travel or trade restrictions. Overseas photovoltaic demand is gradually being released gradually, and the overall power supplyInvestment completion is expected to increase.

In terms of power grid equipment, some construction plans may be postponed for a short period of time, but after the restoration of supply and logistics, it will have a small impact on the completion of a series of investment and construction.

  In terms of new energy batteries, in addition to short-term raw material supply and logistics, the resumption time of downstream new energy vehicles including automobile companies in Hubei Province may have a certain impact on the installed capacity of power batteries in the first quarter.

The epidemic has limited impact on the overall electrical equipment manufacturing industry in the long term; in the short term, in the long term, the long-term production and sales are affected by the delayed resumption of work. It is expected that the epidemic will gradually recover after the epidemic situation, and the progress of large-scale power construction projects will improve.The lag in construction progress will bring certain liquidity risks.

  At the current stage of the industrial scale, the power supply is still in a relatively surplus state, but through the release of high-quality capacity brought by the advancement of supply-side reform, it is expected that the electricity consumption of the whole society will remain constant and stable; affected by the wind power supplementary decline policy, the tide of installationIt will continue, and the amount of power investment completed will increase.
  In 2018, the average utilization hours of power generation equipment nationwide increased by an hour and 73 hours, and rose slightly to 3,862 hours. However, from the historical interval, the average utilization hours of power generation equipment is still low, and the electricity supply is still relatively surplus.

  In 2018, the entire society gradually used 6,844.9 billion kilowatt-hours of electricity, an increase of 8 per year.

49%, an increase of 1 over the same period last year.

.

Nine digits, the growth rate hit a new high since 2011.

The electrification level has increased, and economic restructuring has led to short-term power elasticity (1?
2 years) The transformation has been enlarged, but it has not changed its long-term downward trend; instead, it has gradually entered a new stage through supply-side reforms, and high-quality capacity has been released again.

On January 12, 2019, the cumulative electricity consumption of the whole society was 7.255 trillion kilowatt-hours, which increased by 4 as a result.

50%.

In 2020, it is expected that the highest supply-side reform will shift to a structural adjustment, the rate of increase in production capacity will improve, and the electricity consumption of the whole society will remain stable.

  The industrial prosperity of the electrical equipment industry is affected by the national and local policies of the industry. Investment in power projects is the main driving factor on the demand side.

Absolutely, the pace of clean development in the world is accelerating, and domestic power investment is mainly driven by the “electricity replacement” policy that promotes the development of clean energy.

  In November 2016, the National Development and Reform Commission and the Energy Bureau released the “Thirteenth Five-Year Plan” for Electric Power Development (hereinafter referred to as the “Plan”), which for the first time promoted the replacement of electrical energy to the construction of a modern energy system at the national level, and promoted the optimization and upgrading of the energy structure.Important progress.
According to the plan, the proportion of non-fossil energy will be further increased. According to the requirement that the proportion of non-fossil energy reaches 15%, it is expected that by 2020, the installed capacity of non-fossil energy will reach 7.

About 700 million kilowatts, accounting for 39%, and the proportion of power generation increased to 31%.
Based on the calculation of the installed power generation capacity of the power plant in 2018, the current non-fossil energy installed capacity has reached 39.

80%, the planning goal has been basically achieved, and the disappearance of policy dividends has become one of the important reasons for the continued decrease in new investment in power supply construction.

  In terms of power infrastructure construction investment, due to the previously low growth rate of power consumption and the planned power installation machines have been put into operation, the investment in power construction projects has basically deviated. During 2018, the amount of power infrastructure construction investment has been gradually reduced.
20%; through the issuance of wind power feed-in tariff policy, it is clear that the subsidy subsidy policy will be implemented by the end of 2020, and those that have not completed the grid connection after the end of 2020 will no longer be replaced.Significantly increased. On January 12, 2019, the investment in power infrastructure construction gradually increased by 12%.

60%.

Affected by the low growth rate of power demand and the state grid’s strict control of the scale of grid investment, in 2019?
In December, the investment in power grid infrastructure construction was gradually reduced.

60%.

It is expected that in 2020, the tide of wind power installation will continue, and the investment in power infrastructure construction will continue to increase; the scale of investment in power grid infrastructure construction will continue to decline.

  Profitability It is expected that the industry’s overall revenue will continue to increase in 2020. Affected by the parity Internet access policy, gross profit margins will decline, and at the same time, it will face certain profit uncertainties.

  Taking the industrial capital goods-electrical equipment in the credit and debt industry as a sample, we selected 41 debt-issuing companies with surviving debt and complete data as a sample, and extracted the median of each indicator for comparative analysis.

  Since 2017, the electrical equipment manufacturing industry has been affected by national subsidy policies, and its income has continued to increase year by year. Under the condition that the investment in grid construction remains stable, the surge in installation caused by the replenishment of wind power will further promote the overall income level of the industry in the short term;However, rush installation will promote enterprises to increase project financing, and the asset-liability ratio of internal enterprises in the industry will further increase in 2020. Under the general trend of tax rebates for industrial compensation and parity on-grid in the future, wind power and photovoltaic policies will transition from subsidies to parity during the short-termProsperity is expected to continue, but after the overall structural adjustment of the industry, internal competition in various sub-sectors intensifies, power construction investment is affected by the downward pressure of the macro economy, and companies within the industry are facing certain earnings uncertainty.

  New bonds issued by the debt financing electrical equipment manufacturing industry are still mainly medium- and long-term entities; since 2019, the scale of new bonds has improved, and the number of medium-term notes issued has fallen sharply due to the increase in debt issuance by convertible / exchangeable companies.In the next one to two years, we will still face some short-term repayment pressure.

  In 2019, 37 bonds were issued by electrical equipment manufacturing enterprises, with a total of 254 bonds issued.

US $ 9.7 billion, affected by the growth in the issuance of convertible / exchangeable corporate debt, the total number of bonds issued increased by 5 each time.

71%, the distribution budget is increasing by 5 per year.

91%; the overall term structure has not changed much, mainly in medium and long-term bonds; among them, targeted instruments, ultra short-term financing, corporate bonds, convertible / exchangeable corporate bonds and medium-term notes accounted for 4 of the bond issuance scale.

17%, 20.

42%, 33.

21%, 38.

87% and 3.

33%, the proportion of convertible / exchangeable corporate bonds and medium-term notes in the same period last year to the scale of bond issuance was 8 respectively.

89% and 30.

At 14%, the scale of convertible / interchangeable issuance showed an increasing trend, and the issuance volume of medium-term notes dropped significantly.

From the perspective of bond issuers, the average value of bond issuers in the electrical equipment manufacturing industry in 2019 is above A +, with AAA accounting for 13.

twenty one%.

  As of the end of 2019, the outstanding bond balance of electrical equipment manufacturing enterprises was 736.

34.1 billion, an increase from the end of 2018.

Electrical equipment manufacturing companies are mainly small and medium-sized private enterprises. Due to the decline in the macro environment and tightening financing, the scale of new debt issuance in 2018 declined, and the scale of debt repayment was larger than that of newly issued debt.

With the implementation of favorable industry development policies and the impact of the supply-side reform entering a new stage, the overall profitability of electrical equipment has improved, and it will continue to thrive in the future. Therefore, there has been a net inflow of financing since 2019.

  As of the end of 2019, the survival bonds of electrical equipment manufacturing enterprises are mainly concentrated in the future.
Expires within 2 years, 2020?
The proportion of bonds due in 2021 to the total size of surviving bonds is about 25 respectively.

67% and 32.

36%, there is still some short-term repayment pressure.

  Credit quality In 2019, the credit quality of electrical equipment manufacturing companies has declined, and the credit rating has been downgraded, but the number of graded companies has decreased compared to 2018.

  From the perspective of bond issuers, the average value of bond issuers in the electrical equipment manufacturing industry in 2019 is above A +, with AAA accounting for 13.

twenty one%.
  Regarding the level adjustment, as of the end of 2019, a total of six companies in the electrical equipment manufacturing industry have adjusted their levels. Four of them have lowered their outlook, and their levels and outlook have been downgraded at the same time. The reasons for the downgrade are mainly due to continuous changes in the company’s own operating risks, and the allocation is frozen.There may be risks involved.

There is no upward adjustment of enterprises.

In 2019, the credit quality of electrical equipment manufacturing companies has declined, and the credit rating has been downgraded, but the number of downgraded companies has decreased compared to 2018.

  It is expected that in 2020, when the scale of grid investment and construction remains stable, the profitability of enterprises within the industry will be structurally differentiated, but the income level of grid-related industries will remain stable; affected by the wind power replacement policy, the selective wind power industry will remain in the future.Rush installation will be maintained, and wind power companies’ revenue will improve in the short term; under the trend of parity on the Internet, in the long term, it will be beneficial to the development of leading enterprises with scale advantages and cost advantages in the industry, industry concentration will improve, and electrical equipment manufacturingThe domestic enterprises as a whole will face structural adjustment.

It is expected that in 2020, the credit level will remain stable with the same policy.