(report producer/analyst: Tianfeng Securities Sun Qian Zong Yan)
. Focusing on the field of dedicated air conditioning, the revenue share of leading customers is stable .1. Focusing on the field of dedicated air conditioning, the company's revenue has grown steadily
Guangdong Shenling Environmental Systems Co., Ltd. was established in 2000. It is currently one of the major enterprises in the field of dedicated air conditioning with a large scale, advanced technology and complete products in the field of special air conditioning.
company mainly engages in air environment regulation equipment represented by special air conditioners, and is committed to providing overall solutions for artificial environment regulation for application scenarios such as data service industry environment, industrial process production and research environment, professional special application environment, and public building indoor environment.
has been developing for more than 20 years and has won many honors. Company was established in 2000. It is the first certified enterprise for the national refrigeration equipment product production license, the project undertaking unit of the National 12th Five-Year Plan, and the vice chairman unit of the China Refrigeration and Air Conditioning Industry Association. It has the first-level professional contracting qualification for electromechanical equipment installation engineering, and has won the "Lu Ban Award" in the construction engineering industry, and its products have won the titles of "Guangdong Province Independent Innovation Product" and "Guangdong Province High-tech Product".
company has rich product matrix, covering four major application scenarios. According to the application scenarios, product forms and core functions of special air conditioning equipment, the company's products mainly involve the following sub-categories: dedicated air conditioning for computer rooms, constant temperature and humidity air conditioning , clean air conditioning, rooftop air conditioning, aircraft ground air conditioning, environmental governance and other special air conditioning equipment. Overall, according to the industry or field of the corresponding customer's location, the company divides environmental adjustment products into four categories: data service, industrial, special types, public buildings and commercial categories. At the same time, the company also provides customers with overall solutions.
The company's main business revenue consists of six projects: data service air conditioner, industrial air conditioner, , special air conditioner, public construction and commercial air conditioner, material, engineering and service. Among them, material revenue is mainly the sales revenue of accessories; engineering revenue is mainly the engineering contract for providing overall environmental system solutions including solution design, construction, etc. to customers in need; service revenue is the service revenue for providing maintenance, maintenance, technical transformation and other services for air-conditioning and refrigeration systems. In 2022H1, the company's main business revenue reached 1.078 billion yuan; at the same time, since 2020, the year-on-year changes in main business revenue were +8.01%/+22.48%/+59.75%, respectively, with a significant growth trend.
core categories are stable, and the revenue share and growth rate of data services and industrial air conditioners are outstanding. According to categories, data service air conditioners, industrial air conditioners and special air conditioners account for a large proportion. From 2018 to 2021, the three items accounted for about 80% of the company's main business income. In H1, the revenue of industrial air conditioners was 263 million yuan, up 50.50% year-on-year; in H1, data service air conditioners, revenue was 263 million yuan, up 42.44% year-on-year; at the same time, the revenue of special air conditioners product categories increased 13.18% year-on-year, also achieving double-digit growth.
.2. The sales model mainly focuses on bidding and tendering, with a stable revenue share of leading customers
bidding and tendering. company mainly obtains business opportunities through bidding, competitive negotiations, etc.; among them, from 2018 to 2020, the revenue obtained by the bidding model accounted for 58.55%/69.35%/62.73% of the main business revenue, accounting for more than half; in 2020, 96.45% of the company's top 20 customers were obtained through bidding model, and the proportion of bidding model increased year by year from 2018 to 2020.
The revenue share of old customers and top customers is stable. In 2020, the company's top five customers were Huawei Investment Holdings Co., Ltd. , Capital Airport Group Co., Ltd. , China Petroleum and Chemical Corporation and China Southern Power Grid Co., Ltd. ; among them, since 2018, Huawei Investment Holdings Co., Ltd. and State Grid Co., Ltd. have remained in the top five customers of the company; from 2018 to 2020, the number of old customers and revenue share of the company also remained at a stable level. From 2018 to 2020, the revenue share of the top five customers remained above 40%.
.3. The equity structure is concentrated, and employees enjoy equity
The actual controller of the company is Cui Yingqi and his daughter Cui Zihua; among them, Cui Yingqi, as the chairman of the company, holds a total of 30.6% of the company's equity. After the company issuance, the employee stock ownership platform Zhongcheng Investment holds 9.67% of the company's equity. The company has a clear organizational structure. The company has 20 functional departments including human resources and administrative centers, financial centers, intelligent manufacturing centers, procurement centers, quality centers, research institutes, and industrial public construction departments, which helps improve management efficiency.
. The downstream market demand has increased considerable, and the industry has broad development prospects special air conditioner application scenarios are diverse.
special air conditioners are equipment designed and manufactured to meet the needs of certain industrial processes and special environments, which strictly control the physical parameters of the controlled environment (such as temperature, humidity, wind pressure, wind speed), chemical parameters (such as the concentration of corrosive gases), biological parameters (such as air dust content, microbial quantity) within a specific range, or equipment specially designed and manufactured for special requirements of use scenarios (such as explosion-proof, shock-proof, impact-resistant). They are widely used in various industrial scenarios.
Special air conditioners include many subdivided categories, including data service industry scenarios, industrial production and research scenarios, professional special application scenarios, public buildings and large-scale commercial building scenarios, etc.
application industry expands, and the special air conditioner market is improving.
With the continuous emergence of new economy, new industries, new demands, etc., the extension of specialized air conditioners is constantly expanding, and the breadth of the application industry will continue to expand. For example, the " new infrastructure " industry covers G infrastructure, ultra-high voltage, intercity high-speed railways, urban rail transit, big data centers and other sectors all belong to the key service areas of dedicated air conditioning. With the continuous deepening of my country's economic development and industrial upgrading, the product layout of specialized air conditioners is expected to expand horizontally and vertically, and the market size is also expected to expand further.
.1. Computer room air conditioning : The scale of data centers is growing rapidly, and the competition pattern of domestic computer room air conditioning has not yet been solidified
Computer room dedicated air conditioning was born in the United States in the 1970s. In order to prevent improper control of environmental temperature and humidity parameters and unstable power supply, resulting in interference in computer computing processes, printer paper jams, head damage, and static electricity. With the continuous development of modern technology industry, precision air conditioners in computer rooms are widely used in high-precision environments such as data centers and computer rooms, and at the same time provide heat dissipation solutions and achieve precise temperature and humidity control. The application industries include telecommunications, finance, IT industries, big data, cloud computing , Internet of Things, smart cities, industrial control, etc. The core market is the field of data center computer rooms.
During the period from 2018 to 2021, the company's data service air conditioner business revenue remained at around 30%; in 2022, the company's data service air conditioner business revenue reached 263 million yuan, an increase of 42.44% year-on-year, achieving rapid growth. We believe that benefiting from the country's fast-growing data center market, the company's data service air conditioning business revenue is expected to be further improved.
Global data centers continue to develop steadily.
According to data from the China Institute of Information and Communications Technology , the annual increase in global servers from 2015 to 2021 is relatively stable, with the net added value remaining between 5,000 and 7,000 megawatts. It is expected that the scale of data centers will continue to grow steadily in the next few years. According to Dgtl Infra's forecast, the general cost of building a data center is US$7-12 million per megawatt, of which the construction cost of HVAC /mechanical/cooling system (including machine room air conditioning, machine room air processor, air-cooled chiller, refrigerant storage and pipelines) accounts for between 15-20%.
We assume that ① The annual increase in global servers is 6,000 megawatts; ② The construction cost of data service-specific air conditioners in data centers accounts for 15%, so the annual increase in the global data service-specific air conditioners market size is US$6.3-10.8 billion, with a large annual new market capacity.
my country's data center scale maintains rapid growth, and the future is promising under the dual wheels of policy and investment.
According to data from the China Academy of Information and Communications Technology, as of the end of 2021, the scale of data center racks in my country has reached 5.2 million, with an average annual compound growth rate of more than 30% in the past five years; it is expected that the number of racks in 2022 will reach 6.7 million, an increase of 28.85% year-on-year, and is expected to maintain a relatively high level of growth.
At the same time, the "Notice on the 14th Five-Year Plan for Digital Economy Development" issued by the State Council in 2021 mentioned that in the future, my country should promote the integrated development of cloud network collaboration and computing network integration, and accelerate the construction of a national integrated big data center system with the collaboration of computing power, algorithms, data, and application resources. After the
policy was promulgated, Xinhuanet news report: At the 2022 China Computing Power Conference, the three major operators, China Tower , China Radio and Television, Inspur , Huawei , Alibaba Cloud and other companies signed contracts to launch 26 national data centers and cloud network integration projects, with a total investment of nearly 50 billion yuan.
Foreign companies weidi technology market share ranks first, and the pattern has not yet been solidified.
According to the official website news of Weidi Technology , in the "2020-2021 China Machine Room Air Conditioner Market Research Annual Report" released by third-party authoritative institutions such as CIDI Research Institute, ICTresearch, and MIR Rui Industry, Weidi Technology ranks first in the domestic machine room air conditioner market with a large market share, and has maintained the first place for 16 consecutive years. Competitors in other industries include AiteNet, Imikon, Jialitu , Yingweik , Huawei, Inspur , etc. At the same time, the share of domestic brands is constantly increasing, and the industry is still showing a trend of fierce competition among competitors, relatively low concentration, and a pattern that has not yet solidified. In the field of computer room air conditioning, the company Shenling Environment continued to be the main manufacturer of the industry from 2015 to 2019, with a market share of between 5-10% in 2019, and there is still a certain room for growth.
2.2. Industrial air conditioning: diversified application scenarios and wide development prospects
Industrial air conditioning is mainly used in industry scenarios such as ultra-high voltage power grid, electricity, chemical industry, metallurgy, food and beverage, machinery and equipment, cement, new energy vehicle industry chain, etc. Depending on the application scenario, product form and core functions, the industrial production and research scenarios mainly include chiller , combined air conditioners, terminal units, unit air conditioners, constant temperature and humidity air conditioners, roof air conditioners, dehumidifiers, clean air conditioners, etc.
During the period from 2018 to 2021, the company's industrial air conditioning business revenue remained at around 27%; in H1, the company's industrial air conditioning business revenue reached 263 million yuan, an increase of 50.50% year-on-year, achieving rapid growth. We believe that benefiting from the increase in fixed asset investment in in the downstream industrial air conditioning industry, the company's industrial air conditioning business revenue is expected to be further improved.
2018, the market size of constant temperature and humidity air conditioners turned positive year-on-year, and the market size of clean air conditioners maintained growth from 2015 to 2019. According to the "2019 China Industrial Machine Room Air Conditioning Industry Annual Research Report", the market size of constant temperature and humidity air conditioning began to rebound in 2019, with the year-on-year growth rate of reaching 3.71%; from 2015 to 2019, the growth rate of the market size of the clean air conditioning was 5.10%, 8.59%, 8.75%, 10.31% and 4.27% respectively.
The roof air conditioner market is under pressure in 2019, and product upgrades are expected to bring new growth points. The rapid development of urban construction has compressed the installation space of air-conditioning equipment. Roof machines have obvious advantages in rail transit, medical purification and other fields due to their centralized equipment and no need for cooling towers.
According to the "2019 China Industrial Machine Room Air Conditioning Industry Annual Research Report", under the restrictions on applicable scenarios and the expansion of other air conditioning products, the domestic market size of roofing machines declined in 2019, with a year-on-year period of -10.88%. By equipped with functional modules such as fresh air and purification, rooftop machines are accelerating their layout in the fields of medical purification and rail transit. The stable expansion of the application market is expected to bring more development opportunities for rooftop machines.
Under construction subway tracks are large in scale, and dedicated industrial air conditioners have a large expansion range.
In recent years, China is in a stage of rapid urbanization development. With the concentration of population into cities, the total amount of urban transportation demand has also increased sharply.According to Wind data, in 2020, the length of subway under construction nationwide was 4,697 kilometers, -9.47% year-on-year; and the length under construction exceeded half of the current subway operating length, and the scale of subway tracks in the country will still maintain a large room for growth in the future. We believe that with the growth of the national subway operation length, the demand for corresponding subway-specific air-conditioning equipment is expected to maintain a continuous upward trend.
Downstream industries have a significant growth rate of fixed asset investment, promoting the release of demand for special industrial air conditioners.
Industrial air conditioners are mainly used in industry scenarios such as ultra-high voltage power grid, electricity, chemical industry, metallurgy, food and beverage, machinery and equipment, cement, new energy vehicle industry chain, etc.
According to data from the National Bureau of Statistics, in 2021, the growth rate of fixed asset investment in agricultural and sideline products processing industry, food manufacturing industry, chemical raw materials and chemical products manufacturing industry, pharmaceutical manufacturing industry, electrical machinery and equipment manufacturing industry, and special equipment manufacturing industry was 18.80%, 10.40%, 15.70%, 10.60%, 23.3% and 24.30% respectively, with growth rates at a relatively high level; compared with the data of various industries in 2019 and 2020 in the early stage of the epidemic, fixed asset investment recovered significantly.
At the same time, according to Wind data, in Shenwan's first-level industry, in 2021, except for the basic chemical ingredient industry, the key application areas of industrial air conditioners, including petroleum and petrochemical components, machinery and equipment components, electricity and food and beverage ingredient industries, etc., the cash paid for long-term assets of has achieved a year-on-year increase of , among which the machinery and equipment components and food and beverage ingredient industries have increased by more than 30% year-on-year. We believe that with the recovery of fixed asset investment in downstream industrial air conditioning industries, the demand for special air conditioning is expected to be further released.
High temperature and humidity air conditioning are fierce in the field of constant temperature and humidity air conditioning, and the market is beginning to experience polarization; in the field of rooftop air conditioning, one of the few brands that continue to maintain a good growth rate, and will continue to maintain a leading market share in 2021.
Under the categories of constant temperature and humidity machine , dehumidifiers and roof air source air conditioning units, the company has always been the leading manufacturer in the industry, with a market share of more than 10% in 2019. Competitors in other industries include Invik, Nanjing Tianjia Environment , Jialitu, Yimikang and Tongfang Artificial Environment , etc.
.3. Special air conditioning: Multiple industries demand continues to be released, and emerging environmental protection fields are to be further developed
Special air conditioning requires air conditioning systems to have anti-corrosion, explosion-proof, earthquake-proof, impact-resistant, extreme temperature and humidity resistance, high altitude tolerance and other capabilities. These scenarios mainly occur in environmental protection governance, transportation (subway, high-speed rail, airport, railway), nuclear power, military industry and aerospace, hospitals and pharmaceuticals, and mainly include various special nuclear power air conditioning (chillers, combined air conditioning, etc.), aircraft ground air conditioning and other industries.
During the period from 2018 to 2021, the company's special air conditioning business revenue remained at around 20%; in H1, the company's industrial air conditioning business revenue reached 205 million yuan, an increase of 13.18% year-on-year. We believe that benefiting from the release of demand for industries such as subways and nuclear power downstream of special air conditioners and the further development of emerging environmental protection fields, the company's special air conditioner business revenue is expected to be further improved.
Infrastructure construction drives the growth of the market size of air conditioners for subway stations.
The air conditioner for the subway station is designed to create a healthy, comfortable, energy-saving and reliable air environment for the station hall and platform public areas, as well as station equipment and management rooms. According to the company's calculations, if the new subway operation length is 800 kilometers per year and one subway station is built at about 1.5 kilometers, an average of about 500 underground stations will be added every year; based on the investment of 5 million yuan in air conditioning equipment (including installation and commissioning) for each station, the air conditioner used in subway stations has a market capacity of about 2.5 billion yuan per year (including installation and commissioning).
my country's nuclear power plant construction started late and developed slowly.
According to data from the National Bureau of Statistics, in 2021, the proportion of nuclear power generation in total power generation was 5.02%, far lower than the world average of 17%.According to National Atomic Energy Agency data, China's nuclear power installed capacity maintains a growth trend, with installed capacity exceeding 7.09% year-on-year in 2021.
" China Nuclear Energy Development Report 2021" shows that my country's independent third-generation nuclear power will achieve large-scale and batch development at the approval pace of 6 to 8 units per year; it is estimated that by 2030, nuclear power generation will account for about 8% of the national power generation. We believe that the rapidly developing nuclear power generation field is expected to bring new additions to special air conditioners for nuclear power plants.
●Environmental protection field—VOCs control and sludge drying
Policy & funds drive VOCs control in both directions. Volatile organic matter (VOCs) are one of the main pollutants that increase the concentration of ozone and fine particulate matter (PM2.5) in the atmosphere, and the petrochemical industry is one of the important sources of VOCs emissions in my country.
According to the "HTM1 Key Area Air Pollution Prevention and Control" " and "Key Engineering Projects for Air Pollution Prevention and Control in Key Areas" released by the state, the investment demand for oil and gas recovery project in the "HTM10 Key Areas" is about 21.5 billion yuan.
The 13th Five-Year Plan Outline has included VOCs in the total control indicators. Under the mandatory constraints of the total control standards, the company expects that the progress of VOCs governance will accelerate. In the future, with the improvement of oil and gas emission standards for gas stations and oil depots and the relaxation of the terminal oil and gas recovery market, the company conservatively estimates that the market capacity in the oil and gas recovery field will be about 30 billion yuan during the 13th Five-Year Plan period.
new solution for sludge disposal under the technological transformation - low-temperature drying.
sludge drying is to solve the problem of sludge retaining sludge containing toxic and harmful substances after biotechnology of activated sludge biotechnology treats sewage. According to the data of the "In-depth Research and Investment Strategic Planning Analysis Report" released by the Forward-looking Industry Research Institute, the total amount of sludge in China reached 90 million tons in 2020, an increase of 16% year-on-year, and the market size of the sludge treatment industry will reach 126 billion yuan.
Air ground air conditioning breaks the monopoly of foreign companies, and emerging fields of environmental protection are expanding. The early market was basically monopolized by foreign companies in the field of aircraft ground air conditioning units. As local enterprises continue to increase their investment in R&D of this type of products, the technical capabilities of domestic aircraft ground air conditioning have reached the international advanced level, and many domestic airports have adopted national brand aircraft ground air conditioning. Shenling Environment is one of the major manufacturers in this field.
Environmental protection field is an emerging market for artificial environmental regulation equipment. The VOCs recycling equipment and sludge low-temperature drying equipment launched by the company are technologically innovative and market-oriented. The company is now actively expanding the overall industry extension.
. Company core competitiveness: technology leads to shape the company's strong competitiveness, improves the marketing service system to ensure customer loyalty .1. Product side: technology leads to shape the company's strong competitiveness
six core technology systems, participating in the drafting of a number of industry standards.
is a leading or participating enterprise in the formulation of many national and industry standards in the field of special air conditioning. It occupies an important position in the technical leadership and industrial standards leadership of the special air conditioning industry. The company participates in the drafting of standards in multiple special air conditioning fields.
has six core technology systems: ultra-high energy efficiency, environmental protection and green engineering, intelligent control, extreme environmental protection, explosion-proof and corrosion-proof, earthquake-resistant and impact-resistant, etc. As of June 2022, the company has a total of 454 patents; among them, invention patents ,139 and 311 utility model patents; as of June 2021, the company has a total of 20 innovative products and technical achievements won national and provincial awards, including the second prize of the National Technology Invention Award in 2012 and 2016.
●Data center air conditioner—Liquid cooling technology
Rapid evolution and practice of liquid cooling technology. liquid cooling technology uses liquid as a heat exchange medium to perform heat exchange and refrigeration near the heat source, and does not require indirect cooling through air like air cooling. Since liquid has a relatively high specific heat capacity of , its cooling effect and energy efficiency are much higher than air cooling cooling, and it has obvious advantages in high-density, large-scale and high-heat dissipation data centers.
Company has a number of innovative liquid cooling key technology patents, and one machine meets multiple requirements. Company successfully developed key technologies and applications of liquid/gas dual-channel precision and high-efficiency refrigeration systems in data centers to meet the needs of high-density data centers. It is an innovative technology in the industry and has formed relevant patents. This technology combines two methods: indirect liquid cooling and gas cooling. Without changing the existing operating mode of the system, it efficiently solves the problem of high-density heat dissipation, and has the characteristics of good energy saving effect, high reliability and strong applicability.
The new dual-channel data center air conditioner developed based on this technology can reduce the data center PUE to below 1.15 and greatly improve the power density of a single cabinet of the server to above 20kW. At the same time, the indirect liquid cooling method adopted by the system can keep the core components of the server away from the water source to improve safety, solve the data center heat island and local overheating to reduce the risk of server overheating and downtime, and significantly save the land use scale of data room and the investment cost of data centers.
horizontal layout, speeding up the application and promotion of machine room air conditioning technology. As of September 2022, the company owns 30.31% of Guangdong Annaizhi Energy Saving Technology Co., Ltd., and Annaizhi's main business is the application of liquid cooling technology in IDC data center computer rooms (including communication computer rooms), as well as the development, integration and application of liquid cooling technology products for related comprehensive energy-saving construction and transformation projects.
Low PUE data centers will become the mainstream of data center development in the future, and new requirements for energy-saving technology for dedicated air conditioners in computer rooms are put forward. Companies with technical and technological advantages are expected to win in market competition. The company has reached the international leading or international advanced level in the field of information and communications (key technologies and applications of data center liquid/gas dual-channel precision and efficient refrigeration systems), and has six core technology systems: ultra-high energy efficiency, environmental protection and green engineering, intelligent control, extreme environmental protection, explosion-proof and corrosion-proof, and earthquake-resistant and impact-resistant. We believe that the company will rely on its technological advantages to usher in new business growth points in the context of rapid growth in data centers.
.2. Production side: Rich production management experience, strictly control product quality
Special air conditioners. Some categories need to be tailor-made in production, so that the company needs to have stronger manufacturing process management capabilities. As a company that has developed for many years, Shenling Environment has excellent resource scheduling capabilities and rich manufacturing process management experience, and can quickly formulate corresponding production processes according to customer needs.
Company strictly controls product quality. product quality management is a very important link in the company's production process. The company attaches great importance to comprehensive quality management and has established a mature quality management and quality assurance control system to strictly process, process and refined management of the entire process of product research and development, manufacturing, marketing, engineering and service.
Company has four multifunctional laboratories: 20HP comprehensive performance laboratory, 120HP comprehensive performance laboratory, 1,800kW comprehensive performance laboratory, and comprehensive performance laboratory installation group, with high product performance testing capabilities.
In addition, the company has formulated detailed quality assessment indicators and improved the quality assessment system. Through regular and irregular internal audits and management reviews, the company can promptly discover and solve problems arising in the quality system, forming a self-improvement of the company's quality management mechanism.
.3. Channel & Marketing End: High customer loyalty, a perfect marketing service system
has rich customer resources, covering multiple industry fields. Since its establishment, has accumulated rich customer resources, and its customers are widely distributed in industries such as electricity, information and communications, transportation, nuclear power, VOCs governance, etc.
winning rate exceeds the industry average. takes the airport-specific air conditioner and State Grid customer bidding projects that the company participated in public bidding and had relatively complete bidding records for participating parties as an example. From 2018 to 2020, the winning rate of airport-type bidding projects was 36.00%, and the winning rate of State Grid quotation projects was 24.14%, both higher than the average winning rate of bid participating enterprises in the same industry for such projects.
has stable customer groups, and revenue has increased with the expansion of customer business. Since 2018, Huawei Investment Holdings Co., Ltd., State Grid Co., Ltd. and China Petroleum and Chemical Corporation have always been among the top five customers of the company, and their cooperative relationship is solid. In 2021, the company and Huawei's business achieved rapid growth: the revenue of data service air conditioners increased by 14.5% year-on-year, the revenue of other products such as engineering services increased by about 126.1% year-on-year, and the revenue of consolidated Huawei's business increased by about 31.8% year-on-year.
At the same time, according to the company's 2022 semi-annual report, in 2022, the company and H Company's business achieved rapid growth: data service air conditioner revenue +28.07% year-on-year, engineering services and materials other products +422.41% year-on-year, and merged H Company's business revenue +74.92% year-on-year.
As an important data service air conditioner and engineering service provider in the data center air conditioning field of Huawei, Telecom , China Unicom and other companies, with good performance in product quality, delivery capabilities, R&D and innovation capabilities, related businesses are expected to achieve rapid growth with the rapid development of customer company's data center business volume.
Complete marketing service system. Company relies on its headquarters as its service center, 8 service areas and more than 40 service outlets to ensure that it provides customers with high-quality and fast full-process professional services anytime, anywhere. In addition, Shenling Environment has also set up exclusive service centers for key projects, which will help better implement the projects.
In the future, the company will continue to expand its business by mining stocks and expanding its incremental volumes.
1) Data Service Air Conditioner: will further increase the business expansion of customers in operators, Internet companies and other data center fields. In 2022, H1 achieved a year-on-year increase in air conditioners' revenue for data services except H Company.
2) Industrial air conditioning: combines the trend of national energy development and change, the company has strategically increased its investment in 's new energy sector, focusing on electrochemical energy storage and other new energy storage, lithium battery manufacturing and other application scenarios.
3) Special air conditioning: combined with the national development plan, the company has increased its expansion in special application fields, especially nuclear energy, confidential businesses, hospital medical care, oil and gas recovery and other business areas.
4) Public construction and commercial air conditioners: gradually increases the business expansion of public construction and commercial fields, and has established a new heat storage company. With the accumulation of heat pump technology used in the special industrial field and the development and integration of various technologies and products such as photovoltaic power generation, photothermal heating, electricity and heat storage, etc., it provides customers with integrated heat pumps and photothermal storage products to the European market.
. Establish a joint venture to layout a new heat pump & energy storage track to track market demand Event: On July 27, 2022, the company plans to sign the "Investment and Operation Company Agreement" with Zhongzhi Investment, Shenling Investment and Zhongmei Investment, and all parties jointly invest to establish Guangdong Shenling Thermal Storage Technology Co., Ltd.
joint venture company registered capital is RMB 30 million. Among them: The company plans to subscribe RMB 20.1 million with its own funds, accounting for 67% of the registered capital.
business scope includes design, research and development, manufacturing, sales, technical consulting services, installation, debugging and repair of air source heat pump water heaters and air source heat pump heaters; research, development, design, sales, and installation of solar photovoltaic and thermal utilization equipment; design, development, production, sales, technical consulting services, installation, debugging and repair of energy storage equipment, etc. Guangdong Shenling Thermal Storage Technology Co., Ltd. has completed its industrial and commercial registration on August 18, 2022.
.1. Heat pump: a new outlet industry with dual support from domestic and foreign sales
is energy-saving and comfortable, with a wide range of application scenarios. Heat pumps are mainly divided into three types: air source, water source and ground source. They collect heat from outdoor air, water or ground respectively and concentrate them indoors. The most common type of heat pump is air source heat pump .
Compared with resistance heating such as electric furnaces and skirting heaters, air source heat pumps can reduce heating electricity consumption by about 50%; compared with standard central air conditioners, high-efficiency heat pumps also have better dehumidification, thereby reducing energy use and improving refrigeration comfort in summer.The subdivided fields under the air source heat pump include hot water, heating, drying, etc.: Under the hot water of the air source heat pump, household hot water and commercial hot water are subdivided; under the heating, household heating and engineering heating are subdivided. Under the household heating, household water coal-to-electricity, household water retail, hot air fan , etc.; under the drying, they are divided into grain, fruits and vegetables, tobacco and sludge, etc.
According to the data of the "2021 China Heat Pump Heating Industry Development Yearbook", the market size of my country's heat pump industry reached 24.82 billion yuan in 2021, a year-on-year increase of 22.87%; from the perspective of the overall heat pump market, the proportion of air source heat pumps has continued to increase in five years, accounting for 95.8% in 21 years, with a scale of 22.71 billion yuan.
air source heat pump mainly focuses on domestic sales, and domestic and foreign sales are growing at the same time. industry online data shows that compared with 2020, the domestic and foreign sales markets of air source heat pumps have seen significant growth in 21 years. Domestic sales and foreign sales increased by 17.20% and +100.5% year-on-year respectively, and exports doubled. At the same time, in 2020 and 2021, the domestic sales of air source heat pumps accounted for 85.76% and 77.88% respectively, and the export proportion exceeded 7.9pct month-on-month, with a significant increase, but domestic sales still maintained the leading share.
2021 China's air source heat pump exports to many countries and regions around the world, and Europe is the main export area of domestic air source heat pumps. Among them, France (18.6%), Italy (11.1%), Australia (9.5%), Germany (7.6%), Netherlands (6.3%) and other countries account for a relatively high proportion.
Europe has higher requirements for energy conservation and environmental protection, and is the most growing region in the past 10 years (the cumulative increase of air source heat pumps from 2011 to 2021 is 138%). At the same time, according to data from the European Heat Pump Association (EHPA), based on the REPowerEU proposal (planning to stop relying on Russian fossil fuels by 2030), the number of air source heat pumps in the European market is expected to achieve double-digit growth within ten years. We believe that energy conservation and energy efficiency stipulated by law are long-term influencing factors, and the subsidy policies introduced by various countries are short-term factors (the 21-year Federal Building Energy Efficiency Funding Plan provides 35%-45% of the cost of installing heat pumps as a subsidy, and if the overall renovation of the building's comprehensive energy efficiency is an additional subsidy). The two will jointly promote the acceleration of domestic air source heat pump products exported in Europe.
We believe that compared with China's air conditioning industry that accounts for more than 80% of the world's output share (industry online caliber) for many years, the production share of the air source heat pump industry with similar product principles still has a large room for growth in the export market. In addition, the heat pump product ownership in many countries around the world is benchmarked against Norway (currently the highest penetration rate, about 50%), which can still significantly increase, and the overall export market size has a large room for growth.
.2. Energy storage thermal management: Energy storage demand increases rapidly, temperature control grows with the trend
Energy storage is energy storage. According to the different forms of energy storage, broad energy storage includes three categories: electrical energy storage, thermal energy storage and hydrogen energy storage. Electric energy storage is the most important energy storage method. According to the different storage principles, it is divided into two types of electrochemical energy storage and mechanical energy storage. Among them, electrochemical energy storage refers to various secondary battery energy storage, mainly including lithium-ion batteries, lead-acid batteries and sodium-sulfur batteries; mechanical energy storage mainly includes pumped energy storage, compressed air energy storage and flywheel energy storage.
Large capacity & high-speed battery development energy storage system, the importance of energy storage thermal management is highlighted.
In the process of my country's energy transformation, the development of photovoltaic power generation, wind power generation and new energy vehicle industries have all promoted the growth of domestic energy storage batteries. According to Guanyan Tianxia data, in 2021, my country's shipments of energy storage lithium batteries achieved nearly double year-on-year growth, reaching 47.5GWh.
Guanyan Tianxia stated that under the development trend of large capacity of energy storage systems and high battery magnification in my country, the heat generation of energy-type and power-type energy storage projects will continue to increase. In order to prevent temperature loss caused by loss of temperature, thermal loss, low temperature interference and other problems of lithium batteries in energy storage systems, the demand and importance of energy storage temperature control continue to increase.
application scenarios are diversified, and the installed capacity of electrochemical energy storage is expected to maintain a high growth rate.
energy storage application scenarios include power side, power grid side, user side and distributed microgrids. Among them, electrochemical energy storage technology represented by lithium-ion batteries has developed rapidly at home and abroad in recent years, and its application scale has developed towards Gigawa-level large-scale applications.
According to TrendForce's statistics, the global installed capacity of electrochemical energy storage in 2022 is expected to be about 65GWh, and it can reach 1160GWh by 2030, with a CAGR of up to 36% from 2022 to 2030.
energy storage temperature control market is expected to develop rapidly, and liquid cooling plans are expected to account for nearly half of them in 2025.
According to national policies, diversified energy storage systems will be strongly promoted, and the value of the energy storage temperature control link is expected to continue to increase.
According to GGII's calculations, the market size of China's energy storage temperature control will grow from 4.66 billion yuan to 16.46 billion yuan from 2022 to 2025, with a CAGR of 52.3%; among them, liquid cooling is a medium- and long-term technical solution, and the market penetration rate may gradually increase. GGII predicts that the liquid cooling market share is expected to reach about 45% by 2025.
This company has good market development space, and the future market development potential is great and the return prospect is good. The company decided to plan the field of air energy heat pump heating, combining solar energy utilization and energy storage technology, and new energy changes in Europe to provide integrated solutions for customers in the European market and even globally. We expect that the heat pump heating business is expected to become a new profit growth point and may become a strong support for Shenling's environmental internationalization strategy.
. Financial analysis: The revenue growth rate is obvious, ROE performed well .1. Revenue side: Revenue has increased year by year, and net profit has rebounded
2022 H1 revenue & performance growth rate is impressive year-on-year. In 2022H1, the company's operating income reached 1.081 billion yuan, an increase of 59.57% year-on-year; the net profit attributable to shareholders was 103 million yuan, an increase of 60.41% year-on-year. The increase in the company's business scale has a significant positive effect on revenue. Although the company's net profit attributable to shareholders fell slightly in 2019, in 2021, the net profit attributable to shareholders quickly rebounded to 140 million yuan, an increase of 12.6% year-on-year.
by region, the company's domestic marketing revenue accounts for a large proportion. In 2021, the company's revenue in mainland China was 1.792 billion yuan, accounting for 99.68% of the revenue; the revenue in overseas regions was 0.06 million yuan, -53.81% year-on-year, with a significant decline.
.2. Cost side: Gross profit margin is relatively stable, profit level is reasonable
Gross profit is increasing year by year, and gross profit margin remains at a relatively stable level. In H1 in 2022, the company's gross profit was 294.51 million yuan, up 36.48% year-on-year; since 2018, except for 2020, the company's gross profit growth has remained at double digits year-on-year.
Company's gross sales profit margins in 2018-2022H1 were 31.65%, 30.57%, 30.50%, 27.71% and 27.25%, respectively, with a slight downward trend, but overall, it remained at a relatively stable level.
The decline in the sales gross profit margin of H1 in 2022 is due to the rise in operating costs due to the increase in raw material prices and the impact of the epidemic. As the epidemic situation improves in the future, the company's gross profit margin is expected to increase.
company's gross profit margin is at the middle level in the industry, basically consistent with the average gross profit margin level of comparable businesses of comparable listed companies, and the profit level is reasonable. Judging from the
points, industrial air conditioners have the highest gross profit. In H1 in 2022, the gross profit margin of industrial air conditioners reached 32.04%, and since 2018, it has remained above 30%. At the same time, the gross profit margin of data service air conditioners is relatively low, and the gross profit margin of H1 in 2022 did not exceed 20%, which is a certain gap with other products.
.3. Expense side: R&D expenses have increased significantly year-on-year, and the overall cost rate is better
The company's sales expenses mainly include employee salaries, freight, travel expenses, after-sales service fees, etc. The company's sales expenses increase with the expansion of sales scale. In 2018, 2019, 2020, 2021 and 2022 H1, the company's sales expense ratio was 8.14%, 8.86%, 8.43%, 7.91% and 6.65%, respectively, and the overall proportion remained stable and showed a downward trend. Compared with the sales rates of comparable companies in the same industry, the company's sales expense ratio is higher than that of Imikon and lower than that of Jialitu and Invik, and is generally within a reasonable range.
The company's management expenses mainly constitute employee compensation, office expenses, depreciation and amortization.From 2018 to 2020, the company's management expense ratio was higher than other comparable companies. The main reason was that in the process of rapid business development in recent years, the company has increased the salary level of managers and increased investment in re-technology and product research and development, resulting in a rapid growth in the management expense ratio.
Company's financial expenses are on a downward trend. In 2018, 2019, 2020, 2021 and 2022 H1, the company's financial expense ratio was 1.71%, 1.07%, 0.94%, 0.62% and 0.33%, respectively, which is at a relatively low level for comparable companies in the same industry.
The R&D expense rate of the company is relatively stable and there is a certain degree of dilution. In H1 in 2022, the company's R&D expense ratio is lower than that of Imikon, Jialitu and Invik, but the amount of R&D investment in the company increased by 55.27% year-on-year. Considering that the company's revenue has a significant increase, there is a certain degree of dilution of R&D expenses.
.4. Compared with listed companies in the same industry, the ROE performance is better
2018-2021, the company's ROE was 14.62%, 13.14%, 14.7% and 12.04% respectively.
The company's return on equity is at the industry's leading level, and the leading gap is more obvious compared with the average return on equity level of comparable listed companies Yingweike and Jialitu.
According to data from H1 in 2022, compared with comparable listed companies, the company's asset turnover rate performs better. The company is in the special air conditioning industry, and the characteristics of the industry determine that the company's operating assets such as accounts receivable and inventory are low.
. Profit forecast We split according to the company's main business, and the revenue forecast is based on the following core assumptions:
Hypothesis 1: Data Service Air Conditioner:
In recent years, the rapid growth of mobile Internet business has promoted the construction of data centers. The company will combine the promotion of the national "East Data and West Calculation" project to increase investment and promotion of high-efficiency new technologies and products such as DPC phase change cooling systems, fluorine pump natural cooling units, high-efficiency evaporative cooling units, liquid-cooled cooling systems, etc. Therefore, the demand for data service air conditioners will continue to grow. In the future, the company will maintain a growth trend in this business. We will give the revenue growth rate of 23%/21%/19% from 2022 to 2024 respectively.
Hypothesis 2: Special air conditioning:
Many domestic civil aviation airports and urban subways use special air conditioners produced by the company. The country is in the stage of rapid urbanization development. The total investment in airports and urban rail transit is growing. The company's special air conditioner revenue growth will also accelerate accordingly. We give the revenue growth rate of 45%/40%/35% respectively from 2022 to 2024.
Hypothesis 3: Industrial Air Conditioning:
Considering that the upgrading and transformation of manufacturing industry will drive the growth of demand for industrial air conditioning, and the company will strengthen its business in the new energy industry chain such as wind and light power generation, energy storage, etc., we will give the revenue growth rate of 35%/35%/33% in 2022-2024, respectively.
Hypothesis 4: Public construction and commercial air conditioning:
Considering that the company's business base is low, and the subsidiary Shenling Commercial specializes in commercial air conditioning, after more than a year of expansion, it has gradually achieved revenue growth. We give revenue growth rates of 120%/80%/50% respectively from 2022 to 2024.
Hypothesis 5: Other products:
contains engineering and services, materials, and other businesses. Considering the expansion of the company's revenue business and the low base of its own business revenue, the revenue growth rate in 2022-2024 will be 89.5%/43.4%/45.2% respectively.
At the same time, the company launched an equity incentive plan, with the target value based on the operating income in 2021, and the operating income growth rate in 2022 shall not be less than 40%; or based on the net profit in 2021, and the net profit growth rate in 2022 shall not be less than 40%.
is based on operating income in 2021, and the operating income growth rate in 2023 is not less than 82%; or based on net profit in 2021, and the net profit growth rate in 2023 is not less than 82%. Highlight the company's confidence in its own high growth in the future.
Based on the above situation of the company, we expect the company's revenue scale from 2022 to 2024 to be 2.64/3.63/4.88 billion yuan, respectively, 46.6%/37.6%/34.6% year-on-year. The net profit attributable to shareholders was RMB 23/35/480 million, with a growth rate of 65.5%/50.8%/38.3% respectively; the corresponding EPS was RMB 0.97/1.46/2.02/share, respectively.
. Valuation Analysis The company's main business is specialized air conditioning products. There are three comparable companies in the industry, namely Invik, Jialitu and Tongfei Co., Ltd. Based on the PE of comparable companies in the industry and the industry average valuation, and considering the revenue increase expected by the company's new heat pump business, we give the company a reasonable valuation range of 37-40 times in 2023, corresponding to a market value of 13-14 billion yuan in 2023, and a reasonable price range of 54.0-58.4 yuan per share.
. Risk warning market competition risk. There are many enterprises engaged in the production of special air conditioning equipment in the country, and the market competition is fierce. The company's core competitiveness lies in its strong R&D technology innovation capabilities, excellent manufacturing management and product quality advantages, complete sales and after-sales service, as well as rich project experience and customer resources. But companies will also face competitive pressure from other companies in the industry that have strong advantages in these capabilities.
If a company fails to keep up with changes in the market environment and demand in a timely manner, improves its financial strength to increase R&D investment, promotes product updates and upgrades, and optimizes product structure, the company may lose its core competitiveness, which will affect the company's operating conditions and profitability.
Customer demand fluctuation risk. has rich customer resources and extensive business, but the demand of downstream customers may be affected by the recent industrial transformation and slowdown in economic growth, and a downward trend will appear, which will reduce the number of orders of the company and have an adverse impact on the stability and sustainability of orders, resulting in fluctuations in the company's operating performance.
Technological innovation risk. With the development of the professional air conditioning industry, market competition has gradually become fierce, and customers' demand for product customization has continued to increase. Technology innovation has gradually become an important part of the core competitiveness of special air conditioning companies. If you cannot follow up on market demand in time and be at the forefront of technological innovation, it will be difficult for the company to obtain profits above the industry average and maintain its continuous and stable profitability.
In addition, if the company does not invest enough in later R&D, or there are deviations in the R&D direction, the company may lose its leading position in technology and market, which will have an adverse impact on the company's operating performance.
Raw material price fluctuation risk. As a professional air conditioner manufacturer, the raw materials used by the company are mainly copper, steel, aluminum, compressors, motors, fans, etc. Judging from the cost structure of the company's main business, the proportion of direct materials has dropped from 88.93% in 2018 to 85.97% in 2020. The proportion of raw materials has dropped slightly, but it still occupies a major position. Therefore, fluctuations in raw material prices will directly affect production costs. If the prices of raw materials continue to rise in the future, the company's production costs will also rise, which will have an adverse impact on the company's operating performance.
The risk of decline in operating performance due to the increase in management and R&D expenses. In order to stabilize the company's position and competitive advantages in the industry, the company has continued to introduce outstanding talents in recent years and increased investment in technology, product research and development, so the company's management expenses have continued to rise. In 2020, the company's management and research and development expenses increased by 24.08% compared with 2018.
In the next few years, the company may continue to increase its investment in technology research and development, management, etc. The benefits brought by these investments to the company will take a long time to reflect. If these investments do not generate the expected benefits of the company in the short term, the increase in company management and R&D expenses will lead to a decline in operating performance.
core technology leaks and the risk of loss of technicians. technological innovation is one of the company's core competitiveness. Therefore, the company has established a complete system for talent introduction and talent training and constraints and incentive mechanisms, and established a confidentiality system for core technology development to reduce the possibility of core technology leaks and personnel loss, but this does not guarantee that the core technology will not leak.
In addition, the demand for technical personnel in the specialized air conditioning industry is increasing. If the company cannot continue to maintain a good talent training system and incentive mechanism in the future, it may face the risk of technical personnel loss.
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Selected report from [Fuanzhan Think Tank]
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