Analyze the counter periodicity and investment opportunities of electrical equipment as the main force of infrastructure construction from the macro level; We also issued UHV: new infrastructure, strong support and high growth to demonstrate UHV specifically. We believe that the improvement of distribution network investment is at the right time, and it is expected to realize an investment of about 770 billion yuan in the next two years; In the long run, the energy Internet will catalyze new demand. Leading enterprises with distribution network solution capability and relatively strong financial strength are expected to distribute a larger cake.
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At present, the progress of distribution network investment is less than expected. We believe that the distribution network investment is expected to reach 770 billion yuan in the next two years. The reasons are as follows:
In terms of natural attributes, power grid investment has the characteristics of from power generation to distribution and from primary to secondary. China has entered the stage of completing the peak of power supply investment, optimizing transmission construction and strengthening distribution network construction;
Exogenous factors: since 2018, the State Grid has deepened the mixed reform, supported the participation of social capital, and emphasized the implementation of the second and third batches of incremental distribution networks;
Endogenous factors: there is a large gap between China’s overall automation rate, line loss rate and other indicators and developed countries, and the rural power grid obviously lags behind the urban power grid. In the medium and long term, the construction of smart grid and active power grid still has a long way to go in the future.
Based on the analysis of winning the bidding, we believe that the distribution network bidding is an inflection point, and we are optimistic about the distribution network system scheme and equipment supplier:
1) In terms of bidding, in 2018, the bidding frequency was accelerated and the bidding volume increased. The bidding amount of primary equipment accounted for about 89%, and the bidding proportion of secondary equipment and primary and secondary integration equipment increased significantly;
2) In terms of winning the bid, the main station of distribution network automation has high competitive barriers, Nari and XJ occupy half of the country, primary equipment and terminal barriers are low, the pattern is relatively scattered, the leading categories of distribution network are complete, the leading position is stable, and has obvious first mover advantage.
At present, the proportion of distribution network secondary equipment has increased, and the long-term energy Internet will catalyze new demand. We believe that leading enterprises with core technology advantages, distribution network solution capability and relatively strong financial strength are expected to allocate a larger cake.