In 2020, the scale of my country's power supply market reached 328.8 billion yuan. In five years, the scale of the switching power supply market reached 183.2 billion yuan, the scale of the inverter market reached 30.4 billion yuan, the scale of the inverter market reached 13.4 b

Category：hotcomm

2025-06-18

(Producer/Author: Guojin Securities, Fan Zhiyuan, Liu Yanxue, Deng Xiaolu)

. Market: Power supply demand is growing steadily, and we are optimistic about the increase in the share of mainland manufacturers and enter the new energy

1. Power supply market: Demand is growing steadily, and the Chinese market reaches 540 billion yuan in 2025

Power supply refers to the device that provides the required power to electronic devices, also known as power supply (PowerSupply). In most cases, the electrical energy emitted by generators, batteries, etc. does not meet the requirements for use of electrical objects such as electrical or electronic equipment, and needs to be changed again. The function of the power supply is to convert primary power such as mains or batteries into secondary power suitable for various electricity objects.

power supply products mainly include switching power supply , uninterruptible power supply (UPS power supply), inverter , linear power supply, frequency converter and module power supply, etc. In 2020, the size of my country's power supply market reached 328.8 billion yuan. In five years, the size of the switching power supply market reached 183.2 billion yuan (56%), the size of the inverter market reached 30.4 billion yuan (9%), the size of the inverter market reached 13.4 billion yuan (4%), the size of the UPS power supply market reached 10.4 billion yuan (3%), and the size of the module power supply market reached 10.3 billion yuan (3%). From the perspective of market size, switching power supplies, frequency converters and inverters are currently the mainstream power products in the market, with the three accounting for 67.65%. Among them, switching power supplies have completely replaced linear power supply in terms of low power. From the perspective of growth, the inverter has the best growth potential, with a CAGR of 18% from 2015 to 2020.

switching power supply: also known as switched power supply, it is a high-frequency power conversion device. Its function is mainly to convert a level voltage into the voltage or current required by the user through different forms of architecture. The input of the switching power supply is mostly AC power supply or DC power supply, while the output is equipment that requires DC power supply, so the downstream is mainly in consumer electronics and industrial applications.

UPS Power supply : That is, uninterruptible power supply, the main function is to backup power supply, preventing major losses caused by sudden power outage of important equipment. Therefore, UPS power supplies are widely used in government, telecommunications, finance and other fields. According to the product, it can be divided into three types: backup, online, and online interactive, among which online accounts for about 80% of the overall scale.

Inverter Power Supply: The main function is to convert DC power into AC power, which is composed of inverter bridge, control logic and filter circuit . Inverters mainly include photovoltaic inverter , portable inverter, vehicle inverter and other types, among which photovoltaic inverter has the highest growth potential.

linear power supply: AC current can be reduced through the transformer, and then rectified by rectifier circuit to obtain pulsed DC power, and then filtered to obtain the voltage of the DC voltage linear power supply with a tiny ripple voltage . Due to its weaknesses such as large size, low efficiency and high input voltage range, it has been replaced by switching power supplies in many occasions. It is mainly used in research institutions and industrial and mining enterprises. The demand is relatively stable, and the market size does not change much each year.

frequency converter power supply: is a power control device that uses the on-off effect of frequency conversion technology to convert the power frequency power supply into another frequency, and controls the AC motor by changing the frequency of the motor's working power supply. It is mainly divided into two categories: low voltage and high voltage inverters. Currently, low voltage is the main one, but the market potential of high voltage in the future is greater. The downstream fields mainly include coal, petrochemicals, and household appliances.

module power supply: mainly plays the role of regulating output voltage and protecting input circuits. Currently, the market is divided into DC-DC and AC-DC, among which DC-DC module power supply accounts for more than 90% of the market share. As a new generation of power supply products, its downstream applications are mainly concentrated in new energy vehicles, communication power supplies, and military industries.

power supply products have a wide range of downstream applications. According to China Power Society data, the market size of industrial control and new energy industries account for the highest proportion, 27% and 19% respectively. The others are rail transit, telecommunications base stations, IT and consumer electronics, accounting for 14%, 11% and 9% respectively.

In recent years, the global and domestic power supply markets have shown a steady growth trend.

(Producer/Author: Guojin Securities, Fan Zhiyuan, Liu Yanxue, Deng Xiaolu)

. Market: Power supply demand is growing steadily, and we are optimistic about the increase in the share of mainland manufacturers and enter the new energy

1. Power supply market: Demand is growing steadily, and the Chinese market reaches 540 billion yuan in 2025

In recent years, the global and domestic power supply markets have shown a steady growth trend.According to data released by the China Power Supply Society, the global power supply market size reached US$90.5 billion in 2015, of which US$38.5 billion in switching power supply. With the continuous and rapid growth of my country's economy, my country's power supply industry has shown a good development trend. According to the China Power Supply Association, it is estimated that my country's power supply market size will reach 360.3 billion yuan in 2021, an increase of 7.39% year-on-year, and it is expected that its market size will increase to 540 billion yuan by 2025, with a CAGR of 11% from 2021 to 2025.

2. Switching power supply: The Chinese market reached 250 billion yuan in 2025, and it is optimistic that the share of mainland manufacturers will increase

From the application fields of my country's switching power supply, the current industrial field accounts for the highest proportion, reaching 54%, followed by consumer electronics, communications and PC, accounting for 33%, 7%, and 3% respectively.

In the future, with the continuous growth of mobile phones, PCs, and server power supply power supply market size in the global and Chinese are expected to continue to grow. According to data from the China Power Supply Society, the total value of the global consumer switching power supply market is approximately 175 billion yuan in 2020, and is expected to grow to 225 billion yuan by 2025, with a CAGR of 5% in five years. The Chinese switching power supply market is expected to grow from 183.2 billion yuan in 2020 to 253.2 billion yuan in 2025, with a CAGR of 5.5% during the period.

Chinese Taiwanese manufacturers currently occupy the main market share of switching power supplies, and mainland power supply manufacturers have better cost control and service capabilities, and are expected to quickly seize market share in the future. The global power supply industry has basically been transferred to China. Taiwanese manufacturers have entered the market earlier and have rich technology accumulation, occupying most of the market share. In 2020, Delta Electric, Optoelectronics, Qunguang and Kangshu power supply products revenue reached 360, 189, 81, and 4.9 billion yuan, with a market share of 37%. Domestic companies generally have low market share.

2.1 Consumer electronic power supply: Benefiting from the fast charging upgrade, it is expected that the global market will reach 96 billion yuan in 2025

Consumer electronic power supply mainly includes power supplies for charging smart terminal products such as mobile phones, smart wearable devices, and smart homes. In the future, it will grow steadily with the shortening of downstream product update cycles and the continuous emergence of new application fields.

We expect the global consumer electronic power supply market to reach 96.267 billion yuan by 2025, with a CAGR of 11.44% from 2020 to 2025, of which the market sizes of mobile phone power, PC and PAD power supply, smart wearable power supply and smart home power supply will reach 44 billion yuan, 24.6 billion yuan, 8 billion yuan, and 19.6 billion yuan respectively. By 2025, the market size of China's consumer electronic power supply will reach 20.1 billion yuan, with the CAGR of 12.35% from 2020 to 2025. Among them, the market sizes of mobile phone power, PC and PAD power supply, smart wearable power supply and smart home power supply will reach 8.6 billion yuan, 4.1 billion yuan, 2.2 billion yuan and 5.2 billion yuan respectively.

We estimate that the current average price of mobile phone power supply is 19 yuan, PC and PAD power supply is 50 yuan, smart wearable device power supply is 10 yuan, and smart home power supply is 15 yuan. With the continuous increase in penetration rate of high-power fast charging , the unit price of power supply will be further increased in the future. Taking Huawei charger retail price as an example, the price of 18W fast charging is 49 yuan, the price of 22.5W fast charging is 98 yuan, and the price of 40W fast charging is 159 yuan.

According to IDC and other data, we expect that by 2025, the global mobile phone, PC and PAD, smart wearable, and smart home shipments will reach 1.778 billion, 492 million, 800 million, and 1.31 billion units respectively, and the proportion of China's shipments will be 20%, 17%, 28%, and 26%, respectively.

The TOP5 downstream consumer electronics manufacturers have a high market share. We believe that high downstream market concentration is conducive to mainland power manufacturers to seize the market share of Taiwanese manufacturers in China faster.

The market share of the world's top 5 mobile phone manufacturers has increased year by year, from 60.65% in 2017 to 70.93% in Q1 2022. The market concentration of the top 5 mobile phone manufacturers in China is also high, basically maintaining above 75% from 2017 to 2021. The top 5 market share in 2021 are vivo, oppo, Xiaomi , Apple and Huawei , respectively, with corresponding market share of 21.50%, 20.40%, 15.50%, 15.30%, and 11.70% respectively.

The market share of the global TOP5PC manufacturers has continued to maintain around 75% in recent years. The top five manufacturers in Q1 2022 were Lenovo , HP , Dell , Apple and AcerGroup, with market share of 22.70%, 19.70%, 17.10%, 8.90%, and 6.80% respectively.The top 5 PC manufacturers in China are Lenovo, Dell, HP, Asus and Huawei, with market share in Q2 2021 being 40.29%, 13.67%, 7.91%, 6.47%, and 3.60% respectively.

The market share of the world's top 5 smart wearable device manufacturers has increased year by year, from 55.56% in 2017 to 62.50% in 2021. The top five manufacturers in 2021 are Apple, Xiaomi, , Samsung, , Huawei and ImagineMarketing, with market share of 30.30%, 10.20%, 9%, 8%, and 5%, respectively. The top 5 smart wearable device manufacturers in China are Huawei, Xiaomi , Apple, oppo and BBK , and the market share in Q4 2020 was 22.30%, 19.5%, 19.20%, 4.60% and 4.00% respectively.

2.2 Server power supply: Benefiting from the improvement of chip performance, it is expected that the global market will reach 31.6 billion yuan in 2025

Server power supply is mainly used in data center scenarios, mainly used in servers, memory and other devices. We expect the global server power supply market size to reach 31.6 billion yuan by 2025, with a CAGR of 11% from 2020 to 2025, with a Chinese market size to reach 9.1 billion yuan, with a CAGR of 11% from 2020 to 2025.

According to the Continental Connect issue, we estimate that the current average price of server power is about 550 yuan. A server requires a 1:2 or 1:4 power module configuration. We believe that with the improvement of server chip performance, server power consumption is higher and the demand for power supply is higher, and the unit price of server power supply continues to rise at a growth rate of 10%.

According to IDC data, we expect global server shipments to reach 14.407 million units by 2025, and China will reach 4.162 million units, accounting for 29% of the world.

According to IDC data, the global TOP5 server manufacturers market concentration is high, basically maintaining at 50%. The main players are Dell, HPE, Inspur , Lenovo and SuperMicro, respectively, accounting for 16.40%, 13.80%, 10.10%, 6.20%, and 4.90% respectively in Q1 2021. The market share of China's TOP5 server manufacturers has also maintained a high level and is showing an increasing trend year by year. The market share in 2020 was 81.20%. The main players are Inspur, Huawei, , H3H3 , Dell and Lenovo, with market share of 35.60%, 16.80%, 15.20%, 6.90%, and 6.70%. We believe that the high concentration of downstream server manufacturers is conducive to the rapid expansion of market share of mainland power manufacturers.

2.3 Power tool power supply: stable demand, the market is expected to reach 23 billion yuan in 2025

According to estimates, we expect the global power tool market size to reach 23.2 billion yuan by 2025, the CAGR will reach 3.51% from 2020 to 2025, and the China power tool market size will reach 18.6 billion yuan, and the CAGR will reach 3.51% from 2020 to 2025.

Assume that the average price of power tools is about 40 yuan.

According to EVTank data, we expect global power tool shipments to be 580 million units by 2025, and 464 million units in China, accounting for 80% of the world.

According to EVTank data, the global TOP5 power tool manufacturers have a high market concentration and have formed a relatively stable competitive landscape. The market share in 2019 was 53%. The main players are Stanley Baide , Chuangke Industrial, Bosch , STIHL and Makita , respectively, accounting for 16.20%, 12.30%, 8.70%, 8.00%, and 7.80%. Although China is a major power tool producer, most manufacturers are still mainly OEM and ODM. The high-end market has been occupied by foreign manufacturers for a long time. The main domestic companies with high market share include Jiangsu Dongcheng and Baoshide. We believe that the high market concentration of downstream power tool manufacturers will help mainland power manufacturers seize the market share of Taiwanese companies in China. (Report source: Future Think Tank)

2.4 Office electronic power supply: stable demand, and the market is expected to reach 13 billion yuan in 2025

Office electronic power supply mainly includes power supplies for charging terminal devices such as monitors, printers, etc. In the future, its market size will grow with the growth of office demand in various countries. According to estimates, we expect the global office electronic power supply market size to reach 13.4 billion yuan by 2025, of which the LCD power supply and printer power supply market sizes will reach 4.3 billion yuan and 9.2 billion yuan respectively.By 2025, the size of China's office electronic power supply market will reach 2.8 billion yuan, with the CAGR from 2020 to 2025 reaching 1.23%, of which the market sizes of LCD display power and printer power supply will reach 1 billion yuan and 1.8 billion yuan respectively.

Assuming that the average price of the printer power supply is 100 yuan, and the LCD monitor power supply is 30 yuan.

According to IDC data, we expect that by 2025, the global LCD display will ship 142 million units and 92 million units respectively, and the proportion of shipments in China will be 23% and 20% respectively.

Downstream office electronics TOP5 manufacturers have a high market share. We believe that high downstream market concentration is conducive to mainland power manufacturers to seize the market share of Taiwanese manufacturers in China faster.

The global TOP5 LCD display manufacturers have a high market concentration, with market share basically remaining at 65% in recent years. The main players are Dell, Lenovo, TPV, HP and Samsung, respectively, accounting for 21.10%, 11.90%, 11.70%, 10.50% and 9.40% respectively in 2021. The market share of the TOP5 liquid crystal display manufacturers in China has also maintained a relatively high level. The market share in Q1 2021 was 71.70%. The main players are Lenovo, AOC, Dell, Philips and HP, with market share of 21.70%, 19.60%, 12.30%, 12.10%, and 5.00%.

The market share of the world's top 5 printer manufacturers has continued to maintain around 88% in recent years. The top five manufacturers in Q4 2021 are HP, Canon, Epson, Brother and Pantum, with market share of 37.90%, 20.30%, 19.70%, 8.10% and 2.00% respectively.

3. Based on the underlying power electronics capabilities, it is optimistic that the power supply companies will successfully extend to new energy vehicles and photovoltaic energy storage fields

3.1 New energy vehicle power supply & electronic control: It is expected that the global market will reach 190 billion yuan in 2025, and the CAGR will reach 41% in five years

Car power supply mainly includes vehicle charger OBC and vehicle DC-DC converter, among which OBC is the function of converting the mains AC input into the DC required for electric vehicle power batteries to charge the power battery; vehicle DC-DC converter converter converts the high voltage of electric vehicle power batteries to 12V or 24V Low voltage, powering low voltage batteries and other equipment on the vehicle. Electronic control mainly includes the vehicle controller VCU, the motor controller MCU, and the battery management system BMS, which mainly plays the role of controlling and monitoring the operation of the vehicle system.

We expect the global electronic control market size of new energy vehicles to reach 111.4 billion yuan by 2025, with a CAGR of 41% from 2020 to 2025, of which MCU reached 78.3 billion yuan, VCU reached 7 billion yuan, and BMS reached 26.1 billion yuan; the global automotive power market size reached 61.2 billion yuan, with a CAGR of 41% from 2020 to 2025. It is estimated that by 2025, the market size of China's new energy vehicle electronic control will reach 59.4 billion yuan, with a CAGR of 47% from 2020 to 2025; the market size of China's automotive power supply will reach 32.6 billion yuan, with a CAGR of 47% from 2020 to 2025.

According to the annual report data of Xinrui Technology and other companies, we estimate that the average bicycle value of the vehicle power supply (OBC+DC-DC converter) is 3,350 yuan, the VCU (body controller) is 400 yuan, the MCU (motor controller) is 4,500 yuan, and the BMS (battery management system) is 1,500 yuan. It is expected to decrease by 5% annually under the trend of integration.

Assume that by 2025, the global sales of new energy vehicles will reach 22.5 million, with a penetration rate of 25%, and China's sales will reach 12 million, with a penetration rate of 40%.

electronic control and OBC have high market concentrations, with the market share of the top 10 industries remaining at around 75% and 91% respectively in recent years. The pricing power is mainly in the hands of a few companies. From the perspective of the internal structure of the product, the electronic control product is similar to the power supply product. We are optimistic that power supply manufacturers have successfully expanded to the new energy vehicle field based on power electronics design capabilities, supply chain management capabilities, and intelligent manufacturing capabilities to seize market share.

3.2 Inverter: It is expected that the global market will reach 155 billion yuan in 2025, and the CAGR will reach 30% in five years

. Under the background of carbon neutrality, the rapid growth of downstream photovoltaic and energy storage installed capacity will accelerate the increase in the inverter market size. Inverters mainly include photovoltaic inverters, portable inverters and other types, among which photovoltaic inverters has the highest growth potential.We expect the shipment of photovoltaic & energy storage inverters to reach 542 and 1650GW in 2025 and 2030, the market size will reach 1550 and 399.9 billion yuan, the CAGR from 2020 to 2025 will reach 25%, and the CAGR from 2020 to 2030 will reach 23%. The industry's increase mainly comes from three aspects: 1) New demand: Benefiting from the rapid growth of the global photovoltaic installed capacity, it is expected that the new demand for photovoltaic inverter in 2025 and 2030 will be 400GW and 1000GW; 2) Replacement demand: IGBT and capacitors in the inverter The electronic components are affected by the internal environment, device temperature and current harmonics, and their service life is often lower than the power plant operation cycle (especially early inverter products). There is a replacement demand in the stock market. It is expected that the replacement demand for photovoltaic inverters will be 22 and 50GW in 2025 and 2030 respectively; 3) Energy storage demand: Energy storage is the only way to achieve a high proportion of renewable energy. With the increase in energy storage penetration rate, it is expected that the penetration rate of energy storage inverters will be 30% and 60% in 2025 and 2030, and the new demand will be 120 and 600GW respectively.

We are optimistic that domestic power companies will expand into the field of inverter OEM with their manufacturing capabilities. The industry barriers of photovoltaic inverters are mainly qualification barriers and brand barriers. The former mandates photovoltaic inverter manufacturers to pass the global multiple certification requirements, which takes a long time and complex procedures. The latter is mainly reflected in the inverter customers' tendency to choose industry leaders as suppliers. Therefore, it is very difficult for new entrants in the industry to establish long-term cooperation with downstream customers in the short term. According to Wood Mackenzie statistics, the domestic photovoltaic inverter market share is mainly occupied by Huawei and Sungrow Power Supply , with market share of 23% and 19% respectively.

3.3 Household energy storage: It is estimated that the market size will reach 118 billion yuan in 2025, and the CAGR will reach 50% in five years

The electricity price continues to rise, and household energy storage will grow rapidly. In 2021, due to the sharp rise in energy prices, electricity prices in Europe were high. In 2022, the conflict between Russia and Ukraine further aggravated the rise in energy prices and power shortage, and demand for household energy storage exploded rapidly. We expect the market size of household energy storage systems to reach 118.1 billion yuan in 2025, with a CAGR of 50% in four years.

According to WoodMackenzie, the global installed capacity of household energy storage in 2021 is expected to be 10GWh, and the global installed capacity of household energy storage in 2025 is expected to reach 50GWh.

household energy storage system mainly includes battery system and inverter system. The unit price of Paineng Technology battery system in 2021 is 1.37 yuan/Wh, and the unit price of Deye Co., Ltd. inverter system is 0.96 yuan/Wh. Assuming that the cost of the battery system and inverter system is 80%, the estimated unit price of the energy storage system is 2.9 yuan/Wh, and assuming that the price will drop by 5% year-on-year in the next few years.

From the perspective of global competitive landscape, Tesla has a market share of 15%, followed by Paineng Technology, reaching 13%. From the perspective of the German market with the highest electricity price and the highest household energy storage penetration rate, sonnen and BYD have the leading market share.

3.4 Portable energy storage: It is expected that the market will reach 63.7 billion yuan in 2025, and the CAGR will reach 72% in five years

portable energy storage power supply, referred to as "outdoor power", is a small energy storage device that replaces traditional small fuel generators with built-in lithium-ion battery . It has the characteristics of large capacity, high power, safe and portable. It is a power system that can provide stable AC/DC voltage output. It can match mainstream electronic equipment on the market. It is suitable for outdoor travel, emergency disaster relief, medical rescue, outdoor operations and other scenarios.

According to the forecast of the China Chemical and Physical Power Association, global and domestic portable energy storage will grow with the growth of outdoor electricity demand and the growth of emergency demand caused by natural disaster . It is expected that global and domestic portable energy storage shipments will reach 31.1 million units and 28.67 million units in 2026, respectively, with the corresponding market sizes of 88.2 billion yuan and 73.7 billion yuan, respectively, and the CAGR from 2021 to 2026 will reach 51% and 52% respectively.

In terms of shipments, Huabao New Energy's market share is the largest in the world, reaching 16.60% in 2020, followed by Zhenghao Technology and GoalZero, reaching 6.30% and 5.60% respectively. In terms of operating income, Huabao New Energy is still ranked first, with a market share of 21% in 2020. Portable energy storage is currently in the early stages of industry development, with low market concentration, with the TOP5 in 2021 being 35.90% (by shipment volume).We are optimistic about some leading power companies in the future to quickly seize market share by relying on their long-term power technology accumulation advantages.

2. Barriers: Technology + customer + scale + brand barriers are high, the industry's first-mover advantage is obvious

Technical barriers: mainly reflected in the high difficulty of customization and the fast iteration speed of downstream products.

Switching power supply technology belongs to power electronics technology , and is a multi-disciplinary cross-cutting technology, involving many technical fields such as power electronics, semiconductor devices, frequency conversion technology, electromagnetic technology, computer (microprocessor) technology and comprehensive automatic control. Therefore, the switching power supply industry is a technology-intensive industry. In addition, switching power supply products have high requirements for reliability design, manufacturing processes, etc., and require long-term and large-scale accumulation of process technology experience and R&D investment. At the same time, with the continuous advancement of science and technology and the continuous improvement of informationization, intelligence and high reliability requirements in downstream application fields, upstream and downstream enterprises need to conduct close technical exchanges, and downstream customers have high requirements for the technical communication and cooperation capabilities of power supply manufacturers. Therefore, switching power supply manufacturing enterprises need to make continuous technical investment and form a high-level R&D technical team.

downstream iteration speed is fast. The power supply industry is a technology-intensive industry and requires a large amount of technical experience accumulation and R&D investment in long-term. With the renewal of smart terminal equipment technology, power supply products are developing towards miniaturization, increasing power density, less heat generation and loss, and increasingly high safety requirements. Therefore, their production technology process has become more complicated. At the same time, as the renewal cycle of downstream consumer electronics continues to shorten, it is objectively required that power supply manufacturers must have fast market response capabilities, be able to keep up with market changes, and continuously shorten the new product design, research and development and large-scale production cycles, so as to better match the new changes in downstream terminal application fields, thereby maintaining and expanding the company's market competitiveness and market share.

customization is very difficult. With the development trend of personalization and diversity of smart terminal products, customer customization requirements have been further improved, making power supply products also have the characteristics of diversified forms. This requires manufacturers to have strong technical and process R&D capabilities and appearance design capabilities, and be able to quickly develop and design new products to meet the current market demand preferences. Because customized products have high added value, new entrants in the power supply market are often restricted by their lack of long-term technical accumulation and cannot respond quickly to customers' diversified needs, so they are quickly eliminated.

Customer + Product certification barriers: long customer assessment cycle + layer-by-layer certification requirements of various countries

long customer assessment cycle. During the business process, the threshold for power supply manufacturers to establish stable customer relationships with well-known customers is relatively high. Before officially becoming a qualified supplier of downstream customers, the comprehensive capabilities of power suppliers such as production scale, equipment advanced level, financial strength, goods delivery, logistics turnover, technical personnel configuration, R&D and design capabilities, product quality stability, market response speed, etc. need to go through the strict assessment and certification process of downstream customers, which generally takes 1-2 years. Moreover, as the product is gradually upgraded, downstream customers have become more and more strict in the requirements of power suppliers. However, if the power supply manufacturer meets customer requirements and enters its supply chain system, the customer generally does not easily change suppliers, thus forming a barrier to market entry for new entrants.

layer-by-layer authentication requirements. Since the safety and stability of power supply will have a significant impact on the use of terminal products, and since the municipal power supply standards are different in different countries, the safety standards also vary, so countries usually formulate clear certification standards for the entry of power supply products. Therefore, if power supply manufacturers want to achieve global sales of their own products, they must pass the certification of each country before they can perform. However, it takes a lot of money and time to obtain these certifications, and at the same time puts forward high requirements on the company's technical level, which poses certain obstacles and barriers to new entrants in the industry.

scale + funding barrier: mainly reflected in cost control, market expansion, large-scale production, etc.

Power supply manufacturing has obvious scale effect: 1) In terms of cost control, large-scale manufacturers have significant bargaining power for the procurement of upstream raw materials, which can reduce the cost of raw material procurement and the impact of raw material price fluctuations. 2) In terms of R&D, manufacturers with scale effects can effectively shorten the product development cycle by continuously strengthening investment in R&D equipment and technological innovation systems, while meeting the higher technical requirements of downstream electronic products; 3) In terms of production, large-scale enterprises focus on continuous technological transformation of production processes and improving the level of automated production, which is conducive to improving production efficiency and improving product quality; 4) In terms of informatization, larger-scale enterprises focus on supporting the rapid development of the company's business through information technology, and do not Strictly improve information systems such as project management, supply chain management, and human resources management to improve the company's overall operational efficiency; 5) In terms of market expansion, leading enterprises in scale accelerate the global layout process, and can further extend to domestic and foreign markets by investing a large amount of manpower and funds. Therefore, the scale effect poses a major barrier for companies newly entering the power supply industry, especially manufacturers positioned at mid-to-high-end power supply products.

Brand barriers: High popularity will ensure that power supply manufacturers expand their market share faster and enter the supply chain system

Brand awareness is a comprehensive reflection of a company's technical level, product quality, production capacity, etc. With the increasing concentration of downstream application areas of power supply, when choosing suppliers and allocating procurement shares, well-known downstream customers also pay more and more attention to the brand influence of suppliers while ensuring product quality and supply capabilities. When choosing suppliers for certification, manufacturers with high brand awareness and high industry recognition are preferred. Therefore, new entrants in the industry, especially when expanding the market to well-known and large customers in the industry, face high brand barriers.

3. Cost: Raw material prices stabilize + price transmission, domestic corporate profit margins are expected to rebound

The material cost in the power supply industry accounts for more than 70%, mainly including rubber shells, resistor capacitors, magnetic materials, and IC chips. In 2021, the prices of commodities (oil, copper) and electronic components (semiconductors, resistive capacitors, magnetic materials) rose sharply, squeezing midstream ODM's profitability. At present, the prices of commodities and consumer electronic components are gradually loosening, helping power companies to recover their profit margins. (Report source: Future Think Tank)

4. Finance: Mainland enterprises have better growth, and the leading net profit margin and R&D expenses in Taiwan are higher.

We selected Taiwan's leading power manufacturers Delta Electric and Optoelectronics Technology and mainland manufacturers Aohai Technology, Haineng Industrial, Oulutong, Kelike, Jingquanhua, Maoshuo Power, and Tianbao Group for financial comparison.

From the perspective of growth, thanks to the gradual expansion of the product category and the continued increase in share, the growth rate in the past five years was better than that of Taiwan's major manufacturers in China. Among them, Aohai Technology's five-year power revenue and net profit attributable to shareholders reached 35% and 17%, leading the industry. In Q1 2022, Aohai Technology's revenue and net profit attributable to shareholders increased by 30% and 27% year-on-year, ranking first in the first echelon.

From the perspective of ROE, the ROE of mainland power supply manufacturers fluctuates greatly, among which Maoshuo Power Supply has the highest volatility, reaching 19.74%. In 2021, the nine power supply manufacturers had the highest ROEs, reaching 33%, followed by Optoelectronics and Delta, with 19% and 18% respectively, and Aohai Technology and Haineng Industrial were both 15%.

DaidaDen leads the industry in profitability and has strong stability. From the perspective of gross profit margin, domestic power manufacturers generally declined in 2021, mainly due to the continuous rise in prices of raw materials such as commodities and electronic components. From the perspective of the decline, due to the good cost control capabilities, the decline was smaller than that of mainland manufacturers. Delta Electric's gross profit margin in 2021 was the highest, reaching 28%. Haineng Industrial's downstream customers mainly include overseas charger retail brands and gross profit margin reached 26%. The increase in gross profit margin is mainly due to the release of production capacity of Vietnam factories.From the perspective of net profit margin, due to the better cost control capabilities of mainland manufacturers, the net profit margins are not much different, but Chinese and Taiwanese manufacturers are more stable. In terms of R&D expense rate, mainland manufacturers have tied with Taiwanese manufacturers in China, but the latter has higher R&D expenses. In 2021, the R&D expenses of Taida Electric and Optoelectronics will reach 6.4 billion yuan and 1.4 billion yuan respectively, with R&D expenses reaching 9.00% and 3.70%. The R&D expenses of mainland manufacturers are Aohai Technology, with R&D expenses of 5% and 200 million yuan respectively.

From the perspective of fixed asset turnover rate, the various companies have a large difference, but overall remains stable. In 2021, Taiwan Power Corporation was 4.4 times, Guangbao reached 8.9 times, and Haineng Industrial had a minimum of 2.6 times. Judging from the weekly transfer rate of accounts receivable, Tianbao and Delta Electric are higher, with 5.4 and 4.7 times respectively, while Oulutong and Maoshuo Power Supply are the lowest, with 3.4 and 2.7 times respectively.

(This article is for reference only and does not represent any of our investment advice. If you need to use relevant information, please refer to the original text of the report.)