In the context of the "carbon neutral", China's new energy to support a variety of measures appear constantly, the inside of the new energy of several major parts, such as lithium electricity, solar, wind power, energy storage, such as growth continues, among them, the wind power is especially strong, most of the leading stock prices have surged, market started digging power has the potential to small and medium-sized market value of the shares, For example, Xingye Co., LTD. (603928), a small leader in the segmentation field of wind power driven wind power casting molding materials, has a long-term market share of casting resin related products in the forefront of the industry, while capacity expansion brings future volume expectations and a promising prospect. Guoyuan Securities believes that societe Generale shares in 2022 valuation significantly lower than comparable companies, the company's market value can at least achieve a short-term doubling of the increase.
Recently, there has been a wave of good news about wind power. On November 16, the relevant authorities issued a notice on allocating in advance the budget of local Funds for additional Subsidies for renewable Energy electricity prices in 2022, allocating a total of 3.88 billion yuan for new energy subsidies, of which 1.55 billion yuan for wind power, accounting for nearly 40% of the total new energy subsidies. In addition, offshore wind power has also become a key field of national renewable energy development. By the end of October 2021, China's installed power generation capacity was about 2.3 billion kilowatts, up 9 percent year on year. Among them, the installed wind power capacity was about 300 million kw, up 30.4% year on year.
Since 2021, the price drop of domestic wind turbines and the amount of bidding have exceeded market expectations. Under the premise of the long-term goal of "carbon neutrality", financial support and technological progress, the wind power industry is still a good track, focusing on the top quality stocks in the upstream and midstream industrial chain. But the wind power plate early rise is very fierce, many stock prices have risen several times, the market began to tap those small and medium-sized market capitalization stocks with strength and potential, such as wind power driven wind power casting molding materials subdivision of the small leader Industrial shares (603928). Recently, Societe Generale shares strong trend, today hit trading, or continue to have high momentum.
According to the statistics of China Foundry Association, the main products of Xingye Stock, such as self-hardened furan resin and cold-core box resin for casting, have the function characteristics of energy saving, high efficiency and emission reduction, and occupy the second and first place respectively in the domestic market share for many consecutive years, and are in a dominant position in the industry competition.
Data show that driven by the strong demand of some downstream industries and the company to increase the marketing efforts of new products, Industrial Shares in the first half of the main products casting resin and phenolic resin production and sales have different growth compared with the same period last year, casting resin sales increased by more than 10%, phenolic resin sales increased significantly compared with the same period last year. In addition, Industrial Shares is investing in the construction of 300,000 tons of phenolic resin and furan resin production capacity (including 200,000 tons of phenolic resin built in 2 years, 100,000 tons of furan resin built in 4 years), the company's capacity in the next year or two is still expected to expand substantially.
Guoyuan Securities pointed out that Industrial shares in the near future furan resin rose faster, especially wind power with furan resin demand rapidly rising. Wind power with furan resin casting resin for the most high-end products, the gross margin is higher than ordinary, while the furan resin supply is almost rigid, the company has a strong ability to premium downstream. The company is expected to benefit from a significant increase in downstream wind installation demand and overall improvement in revenue and profitability next year.
According to the estimation of China Foundry Association, each megawatt fan needs about 20-25 tons of casting, and each 1 ton of casting needs about 25-30 kg of self-hardened furan resin or 10-15 kg of cold-core box resin. In 2020, China's new grid-connected installed capacity of wind power reached 71.7GW. It is calculated that China's wind power casting market in 2020 is about 1.434-1.792,500 tons, and then it is calculated that the self-hardened furan resin is 359-53,800 tons or the cold-core box resin is 143-44,800 tons.
Considering the future wind power installed demand, the global wind power installed capacity will be about 137.6GW by 2025, and the wind power casting demand will be about 3.44 million tons. Considering that Chinese wind power casting accounts for about 80% of the world market share, the wind power casting demand in China will be about 2.67 million tons in 2025, and the casting resin market size will increase by about 1.5-2 times.
Guoyuan Securities analysis believes that wind turbine casting will become the largest segment of casting resin industry in 2025, driving the casting resin CAGR to reach at least 10% in the next five years. Compared with the growth rate of CAGR of less than 3% in recent five years, the casting resin industry is undergoing qualitative changes.
At present, the wind power plate to obtain the intensive attention of funds, indicating that the capital market belongs to the era of "wind power" is coming. Industry insiders believe that the current market value of Xingye's shares is 3.2 billion yuan (On December 1), excluding the company's holding of 1.5% equity market value of Ronghui Lithium, the company's main market value is less than 3 billion yuan, the company's revenue is expected to reach at least 2.5 billion yuan in 2022, 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 foundry resin participating enterprises are mainly Shengquan Group, Xingye Shares and foreign-funded enterprises, and most of the other participants are small and medium-sized enterprises. Therefore, the comparable company in the subdivision industry is Shengquan Group, whose current market value is 30.1 billion yuan (on December 1). Haitong Securities gives shengquan Group 42-45 times PE valuation range in 2022. Guoyuan Securities analysis believes that the valuation of Societe Generale shares in 2022 is significantly lower than comparable companies, if the production capacity is in line with expectations, the company has a very imaginative space for growth, the current market value of the company can at least double in the short term.
