Core Insights - Jiangning District's smart grid industry achieved a production value of 90.114 billion yuan from January to May, marking an 11.2% year-on-year growth, with a goal to reach a scale of 500 billion yuan by 2025 [1] - The district has signed a significant investment project with State Grid Electric Power Research Institute (Nanjing) to enhance its smart grid industry cluster [1] Industry Development - The smart grid has become a crucial industry in Jiangning, recognized as a national leader with over 252 large-scale enterprises and 17 listed companies, achieving a 60% market share in smart control devices across transmission, transformation, and distribution sectors [6] - The integration of smart grid technology with artificial intelligence and big data is emerging as a key trend in the industry [9] Technological Advancements - NARI Technology has been advancing its "network construction" technology since 2012, focusing on energy storage and flexible direct current technologies, with nearly 20 product series developed [4] - The "network construction" technology acts as a vital support mechanism for the grid, enabling rapid response to stability needs and enhancing power delivery capabilities [5][7] Future Goals - Jiangning aims to achieve a smart grid industry revenue exceeding 250 billion yuan by 2025, with plans to establish over 100 key facilities [13] - The district is committed to leading the industry from a domestic to a global level, focusing on technological innovation and establishing a world-class smart grid industry cluster [15]

Group 1 - The core concept of the new power system is to upgrade the grid to accommodate large-scale integration of renewable energy sources, moving away from a coal-dominated system to a more intelligent and flexible one [3] - The first batch of pilot projects focuses on seven key areas, including grid-structure technology, system-friendly renewable power plants, smart microgrids, and virtual power plants, with virtual power plants being particularly noteworthy [3] - The A-share market has seen an average increase of 3.43% in virtual power plant-related stocks since May, with notable performers like Weide Information rising by 56% [3][4] Group 2 - 26 virtual power plant stocks have seen increased leverage funding, with Shanghai Electric, Guodian Nari, and Zhongheng Electric each receiving over 100 million in net financing since May [4] - Institutions are actively monitoring these stocks, with 24 institutions rating Xucheng Electric and 22 for Guoneng Rixin, indicating strong institutional interest [4] - Companies like Longxin Group and Ruijun Power are expected to potentially double their net profits by 2025, reflecting optimistic forecasts from institutions [4] Group 3 - The core logic of the pilot projects includes stabilizing renewable energy generation through grid-structure technology, which could benefit equipment manufacturers [4] - Virtual power plants rely on software and algorithms for resource scheduling, making companies involved in power information technology and energy management, such as Longxin Group and Ruijun Power, worthy of attention [4] - The concept of synergy between computing power and electricity involves using big data and AI for optimizing power dispatch, which may attract funding for companies that integrate both power and computing capabilities [4] Group 4 - Companies like Guodian Nari and Xucheng Electric are well-positioned due to their strong fundamentals and alignment with policy catalysts, making them suitable for long-term investment [5] - The new power system is seen as a necessary step towards achieving carbon neutrality goals, with significant investments expected in this sector, potentially exceeding one trillion by 2030 [5] - The pilot projects aim to address bottlenecks in integrating renewable energy into the grid, highlighting the importance of understanding each company's position within the industry chain [5]

Core Viewpoint - The article outlines the initiation of pilot projects for the construction of a new power system, focusing on innovative technologies and models to enhance the integration and efficiency of renewable energy sources [1]. Group 1: Overall Requirements - The pilot projects will focus on seven key directions: grid-structured technology, system-friendly renewable power plants, smart microgrids, synergy between computing power and electricity, virtual power plants, large-scale high-proportion renewable energy delivery, and new-generation coal power [2]. - The approach will be tailored to local conditions, encouraging the adoption of new technologies and models while ensuring comprehensive management throughout the project lifecycle [2]. Group 2: Pilot Directions - **Grid-Structured Technology**: Aimed at areas with high renewable energy integration, this technology will address issues like reduced short-circuit capacity and enhance the stability of power supply [3]. - **System-Friendly Renewable Power Plants**: New or upgraded plants will improve system compatibility, with a target of increasing output reliability by over 10% during peak hours [4]. - **Smart Microgrids**: These will enhance self-regulation and balance capabilities, increasing the proportion of self-consumed renewable energy [5]. - **Synergy Between Computing Power and Electricity**: This involves planning for data centers' green electricity needs and optimizing the use of renewable resources [6]. - **Virtual Power Plants**: These will aggregate distributed energy resources to enhance flexibility and support renewable energy consumption [7]. - **Large-Scale High-Proportion Renewable Energy Delivery**: Focused on specific regions, this aims to improve the delivery of green electricity through advanced technologies [8]. - **New-Generation Coal Power**: This will promote cleaner and more efficient coal power generation, aligning with carbon reduction goals [9]. Group 3: Organization and Implementation - **Pilot Application**: Applications for pilot projects will be organized by provincial energy authorities or central enterprises, with a focus on feasibility and technical economics [10]. - **Pilot Review**: A third-party professional organization will evaluate applications based on established criteria, selecting projects for the first batch of pilots [11]. - **Project Implementation**: Local energy authorities and project units must adhere to the approved plans, with any significant changes requiring further approval [12]. Group 4: Support Policies - Supportive policies will be developed to facilitate pilot projects, including funding channels and prioritization of coal power projects that align with renewable energy initiatives [13]. - The results of the pilot projects will be integrated into the evaluation system for the new power system, influencing future assessments [14].

Investment Rating - The report assigns a "Buy" rating for the company with a target price of 82.53 CNY, based on a 2025 PE of 17.02X [6]. Core Insights - The company is a leading domestic energy storage system integrator, with over 99% of its revenue coming from energy storage systems. It has shown significant revenue growth, achieving a year-on-year increase of 213% in 2022 and 166% in 2023 [1][4]. - The company has made substantial advancements in overseas markets, particularly in Europe, the United States, and the Asia-Pacific region, with notable partnerships and product certifications [3][4]. - The company is actively developing new products, including self-researched energy storage PCS, and is focusing on innovative technologies such as grid-type technology and silicon carbide applications [2]. Company Overview - Established in 2011, the company specializes in energy storage systems and power battery systems, providing comprehensive solutions for various sectors including traditional and renewable energy generation [13][24]. - The company has a concentrated ownership structure, with the actual controllers holding a combined 32.33% of the shares [13]. Financial Performance - The company forecasts revenues of 82.35 billion CNY, 114.60 billion CNY, and 142.83 billion CNY for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 17.9%, 39.2%, and 24.6% [4]. - The net profit attributable to the parent company is projected to be 6.40 billion CNY, 8.62 billion CNY, and 10.63 billion CNY for the same years, with growth rates of 10.73%, 34.71%, and 23.23% [4]. Market Position - The company ranks among the top energy storage integrators in China, consistently achieving high shipment volumes and market share [19][49]. - The global energy storage market is expected to grow significantly, with a projected CAGR of 60.3% from 2023 to 2027, driven by increasing demand for energy storage solutions [49][50].