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Trainee reporter heard

On the evening of July 15, China Southern Power Grid Energy Storage announced that the company plans to invest a total of 24.476 billion yuan to build three pumped-storage power station projects, and participate in the establishment of private equity funds to invest in strategic emerging industry projects such as energy storage and new energy.

The controlling shareholder of CSG Energy Storage is China Southern Power Grid Co., Ltd. (hereinafter referred to as CSG), which also revealed the big news on the same day. Reporters learned that CSG is comprehensively promoting the large-scale renewal of power grid equipment, and the relevant investment scale is expected to reach 195.3 billion yuan from 2024 to 2027.

On the same evening, Shuangjie Electric announced that the company has been pre-selected as the winner of the first batch of framework bidding projects for distribution network equipment of the State Grid Corporation of China in 2024, with an estimated total bid amount of approximately 321 million yuan.

24.476 billion yuan added to the pumped storage sector

The three pumped-storage power station projects that China Southern Power Grid Energy Storage plans to invest in are the Guigang Pumped-storage Power Station Project in Guangxi, with a total investment of approximately RMB 8.117 billion; the Yulin Pumped-storage Power Station Project in Guangxi, with a total investment of approximately RMB 8.312 billion; and the Guanyang Pumped-storage Power Station Project in Guangxi, with a total investment of approximately RMB 8.047 billion.

According to the introduction of China Southern Power Grid Energy Storage, the total planned installed capacity of each of the above three projects is 1.2 million kilowatts (4×300,000 kilowatts), and they are all key implementation projects of Guangxi's "14th Five-Year Plan" in the National Energy Administration's "Medium- and Long-Term Development Plan for Pumped Storage (2021-2035)".

Taking the Guangxi Guanyang Pumped Storage Power Station project as an example, its construction location, Guilin, is a new energy base in the northern Guangxi region. After completion and operation, it will undertake tasks such as peak regulation, valley filling, energy storage, frequency regulation, phase regulation and emergency backup. It can further enhance the regulation capacity of the Guangxi power grid, promote the consumption of new energy in Guilin, and ensure the safe, stable and economic operation of the power grid.

Pumped storage is an important flexible power source for the power system and an important support for building a new power system and promoting the green and low-carbon transformation of energy. The company's investment in the above project is in line with its strategic layout and planning goals, and is conducive to further expanding its main business, according to the announcement of China Southern Power Grid Energy Storage.

China Southern Power Grid Energy Storage mainly engages in pumped storage, new energy storage and peak-shaving hydropower. As of the closing on July 15, its total market value was 29.82 billion yuan.

On the evening of July 15, China Southern Power Grid Energy Storage released a record of investor relations activities, showing that the company said during a survey by multiple investment institutions: "The long-term positive trend of pumped storage remains unchanged, and the company's strategy of accelerating the development of pumped storage remains unchanged."

The reporter noticed that the State Grid Corporation of China Energy Storage announced that it plans to invest in the above-mentioned project and also mentioned that it will help the high-quality development of the local economy and society.

On July 11, China State Grid Corporation of China and the government of Guangxi Zhuang Autonomous Region signed a framework agreement on comprehensively deepening strategic cooperation in the new era.

Meng Zhenping, Chairman and Party Secretary of China Southern Power Grid Co., Ltd., said that China Southern Power Grid Co., Ltd. will take the signing of this cooperation agreement as a new starting point, focus on the central government's requirements, Guangxi's needs, and the company's capabilities, and fully support Guangxi in building a national comprehensive energy security zone. Together with the company, it will promote high-quality development of power infrastructure, improve the power system and mechanism that adapts to the new energy system, accelerate the construction of new power systems, shape a new quality of power productivity, and help Guangxi build a modern industrial system.

Large-scale update of power grid equipment

Many listed companies benefited

At present, the State Grid Corporation of China is comprehensively promoting the large-scale renewal of power grid equipment, and it is estimated that the relevant investment scale will reach 195.3 billion yuan from 2024 to 2027.

Specifically, the State Grid Corporation of China will increase its investment by RMB 4 billion by mid-2024, bringing its annual investment to RMB 40.4 billion in 2024. It aims to achieve a 52% increase in investment in grid equipment renewal by 2027 compared to 2023.

The person in charge of the Transmission and Distribution Department of the State Grid Corporation of China introduced that equipment renewal is an important foundation for the safe and reliable operation and high-quality development of the power grid. This round of large-scale equipment renewal and transformation of the power grid will focus on five directions: improving the inherent safety of the power grid, building disaster prevention and mitigation, improving the digital power grid, improving energy conservation and efficiency, and upgrading green environmental protection.

Among them, the distribution network reliability improvement project occupies an important position in the current round of equipment renewal and transformation of the State Grid Corporation of China, with an investment proportion of 14.66%.

The State Grid Corporation of China predicts that by 2025, the distribution network will reach a level of 50 million kilowatts of distributed photovoltaics and 2.5 million charging piles, and basically achieve flexible, intelligent and digital transformation by 2027.

Public data shows that by 2023, my country's power grid investment will exceed 500 billion yuan, and the distribution network is the focus of power grid investment. State Grid Corporation of China plans to invest more than 1.2 trillion yuan in distribution network construction during the 14th Five-Year Plan period, accounting for more than 60% of the total investment in power grid construction.

At present, some A-share listed companies have benefited from the large-scale power grid equipment renewal plan.

On the evening of July 15, Shuangjie Electric announced that the company has been pre-selected as the winner of the first batch of framework bidding projects for distribution network equipment of the State Grid Corporation of China in 2024, with an estimated total bid amount of approximately 321 million yuan.

Guoyuan Securities recently released a research report pointing out that Shuangjie Electric has benefited from increased investment in the power grid and its power transmission and distribution business has gradually recovered. In 2023, the company's overall revenue from power transmission and distribution business will be 1.727 billion yuan, a year-on-year increase of 28.18%.

At present, 38 A-share listed companies in the power grid equipment industry have released their semi-annual performance forecasts for 2024. According to the estimated lower limit of net profit attributable to parent companies, 17 A-share listed companies are expected to increase year-on-year (including turning losses into profits), accounting for more than 40%.

Editor: Joey

Reviewer: Chen Siyang

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