Analysis of the current market situation of the po

Analysis of the current market situation of the power supply industry in 2018, the profit space of products is constantly compressed

Abstract: power supply refers to devices that can provide electric energy. The power source is based on the principle of "magnetic power generation", which is generated by renewable energy such as water power, wind power, ocean tide, dam water pressure difference, solar energy, and burning coal and oil residue. In recent years, with the steady development of China's macro-economy, China's power supply industry as a whole has been growing, and the profitability of the industry has also remained at a stable level

power supply refers to a device that can provide electrical energy. The power source is based on the principle of "magnetic power generation", which is generated by renewable energy such as water power, wind power, ocean tide, dam water pressure difference, solar energy, and burning coal and oil residue. In recent years, with the steady development of China's macro-economy, China's power supply industry as a whole has been growing, and the profitability of the industry has also remained at a stable level

1. The total profit of the industry has maintained growth in the past three years

in recent years, the total profit of China's power industry has shown a fluctuating trend. After declining in 2013, it has increased for three consecutive years, reaching 10.24 billion yuan in 2016. In the past three years, due to the development of new energy vehicles and distributed power stations, the profitability of the industry has been continuously improved

in 2017, the profits of most listed enterprises in the power industry increased. In 2017, the net profit of sunshine power attributable to shareholders of listed companies was 751 million yuan, an increase of 152.93% over the same period last year; The main reason is that the company's photovoltaic power station system integration business and inverter business increased significantly in this period. On the other hand, Nandu power announced that it was easy to sell the press from Northeast China to Hainan 3 yadu. It is estimated that the net profit attributable to shareholders of Listed Companies in 2017 will be 362million to 461million, with a year-on-year change of 10.00% to 40.00%. The forward looking Industry Research Institute estimated that in 2017, the total profit of China's power industry was about 11.1 billion yuan, an increase of 8.40% year-on-year

Chart 1: trend chart of total profit of China's power industry in (unit: 100 million yuan,%)

source: sorted out by the forward looking Industry Research Institute

2. The profitability of industry products showed a stable trend

in, the gross profit margin and sales profit margin of China's power industry remained stable, maintained at about 16% and 13% respectively. According to forward-looking estimates, the gross profit margin of the power industry fell to 15.91% and the sales profit margin fell to 12.99% in 2017. The analysis of sample enterprises shows that most of the low-end products produced by enterprises have overcapacity, prices have fallen, and profit space has shrunk; In addition, some enterprises have weakened the control of costs and expenses, and the growth rate of the three expenses is high, resulting in a significant decline in gross profit margin and sales profit margin. However, compared with other power equipment industries, the sales profit of the power industry is still at a high level

chart 2: trend chart of gross profit margin and sales profit margin of China's power industry in (%)

source: sorted out by forward looking Industry Research Institute

3. The profitability of industry assets has improved

from a numerical point of view, the return on total assets of China's power industry was stable in, both maintained at about 15%. This is mainly because since 2011, a large number of power supply enterprises have been listed and their financing ability has been enhanced. After the implementation and operation of new projects, their asset profitability has remained at a stable level. In 2016, affected by profit growth, the return on total assets of the industry increased significantly; According to forward-looking estimates, the return on total assets of China's power industry in 2017 was about 20.86%, down from 2016, but still maintained at a high level

chart 3: after too long-term development, the trend chart of the return on total assets of China's power industry in 2017 (unit:%)

source: the forward-looking Industry Research Institute sorted out

4. The level of industrial capital operation was stable

in 2012, affected by the oversupply of the photovoltaic industry, the capital preservation and appreciation rate of the power industry fell sharply. In recent years, the growth of market demand for new energy vehicles has driven the development of the power industry to a certain extent; In, the industrial capital operation level was stable, and the capital preservation and appreciation rate was maintained at about 110%. According to forward-looking estimates, the value preservation and appreciation rate of industrial capital in 2017 was about 111.44%

chart 4: trend chart of capital preservation and appreciation rate of China's power industry in (unit:%)

source: forward looking Industry Research Institute collates

5. Analysis of industry profit level in 2018

influencing factors affecting industry profit scale, mainly including sales volume, production cost, price, tax, etc

during the 13th Five Year Plan period, China will speed up the construction of distributed power generation. We will liberalize the construction of distributed power generation on the user side, promote the operation mode of "self use, surplus power supply, and power regulation", and encourage enterprises, institutions, communities, and families to invest in the construction of roof mounted solar, wind, and other distributed power sources according to their own conditions. Encourage the promotion and construction of distributed energy projects in conditional industrial clusters, industrial parks, business centers, airports, transportation hubs, data storage centers and hospitals, and develop small and medium-sized distributed low-temperature geothermal power generation, biogas power generation, biomass gasification power generation and other projects according to local conditions. Supporting these points out that road industrial enterprises should speed up the construction of waste heat, residual pressure, residual gas and gas power generation projects for the development of the automotive industry. This measure will effectively promote the demand growth of the power industry. We have worked with Tier 1 suppliers and Fraunhofer igcv1

in terms of cost, resistance accounts for a small proportion of the overall cost of power supply, which is about 3%; However, capacitors account for 10% of the material cost, which has increased by more than 100% in 2018, which means that the gross profit of power supply is directly reduced by 10 percentage points, so the material cost pressure is relatively large. The fierce market competition environment has prompted power manufacturers to constantly adjust prices, and the price of finished power products has reached the bottom. At present, the gross profit margin of small and medium-sized power supply itself is not high, and the power supply enterprises have basically been unable to absorb the cost pressure brought by the rising price of materials

chart 5: analysis of factors affecting the profit scale of the power industry

source: the foresight Industry Research Institute collated

the above data and analysis are from the "analysis report on market demand forecast and investment strategic planning of China's power industry in" released by the foresight Industry Research Institute