Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
泰坦能源技术 (2188:HK)
Company Visit
Not rated
China Titans Energy Technology Group Co Ltd
Sector: Industrials
Industry: Electrical Equipment
Sub-industry: Heavy Electrical Equipment
Key data
Price (HK$)
52wk High (HK$)
52wk Low (HK$)
Market Cap (HK$m)
Market Cap (US$m)
Shares outstanding (m)
Free float
1M Return
6M Return
52wk Return
YTD Return
Dividend yield (FY14)
S&P
HSCEI
Inst Ownership (Top 5)
XIN QING LI
WEI AN
BROAD OCEAN ELECTRIC
HONOR BOOM INVESTMEN
PILSCHEUR THOMAS KAR
潜力巨大
2.01
2.12
0.56
1,859
240
840
41.1%
36.7%
41.5%
101.0%
179.2%
10,050
21.40%
20.35%
9.09%
8.91%
7.16%
Source: Bloomberg
泰坦能源科技是港股唯一新能源汽车充电设备供应商标的，也是国内唯一一家做充
电设备经验超过 10 年的企业。国家电网公司在 2014 年 7 月退出后在今年 10 月份重
返充电设备招标，泰坦中标 8200 万人民币，占总 15 亿招标额的 5.5%。按国家发改
委 11 月公布的《电动汽车充电基础设施发展指南(2015-2020 年)》中明确的充电设施
建设指标规划，充电设备潜在市场价值到 2020 年可达千亿。
充电设备和运营业务快速扩张。电动汽车充电设备和直流电系统构成收入的两个主
要来源。电动汽车充电设备 2014 年收入通同比增长 433％，1H15 收入同比增长
44％。毛利水平在 45％左右，占 1H15 收入的 62％。直流电系统是公司传统业务，
20 年经验，2014 年和 1H15 收入同比下降 20％左右，毛利稳定在 25％上下，占
1H15 收入的 34％。充电站建设收取的充电服务费记在公司运营收入下。泰坦在十月
国家电网招标中中标 8200 万人民币，充电设备和运营费用占比会在今后进一步升高。
公司通过与当地企业合作迅速扩张并获取协同效应，至今已经完成了其在 2015 年承
诺的 5 个城市建设充电网络项目落地的指标。由于大量的资本开支和研发费用投入，
公司到 1H15 的盈利仍为负值。
.高增长的电动汽车充电行业。根据国家发改委 11 月公布的指导方针，“十三五”阶
段为满足超过 500 万辆电动汽车充电需求，到 2020 年需新增集中式充换电站超过
12100 座，分散式充电桩超过 480 万个。相较于 2014 年年底的工信部公布标的累计
建成充电设备数据统计，新目标相当于充换电站需扩大至少 17 倍，而充电桩数量要
扩大 171 倍来达到 2020 年目标，等同于 61%和 136%的年复合增长率。五年总投资
额粗算预估达 780 亿到 1200 亿之间。
Analyst
Vincent Yu
A0230513070005
BAM599
yuwh@swsresearch.com
Phone: (+86) 21 2329 7301
技术和先发优势维护公司领先充电设备供应和运营商行业地位。充电设备行业竞争
十分激烈，由于交流慢充充电桩基本没有太大技术壁垒，进入者涌现，市场份额在
行业成长初期也难以定位。泰坦直流充电技术领先，在该子领域有一定技术壁垒，
结合公司业内先发布局优势和国网历史次次中标的良好记录，公司管理层有信心在
现在和今后的战略布局和发展中维持公司领先新能源汽车充电设施提供商和运营商
的行业地位。
估值。公司目前交易在 3.6 倍市净率，市值达 19 亿。公司长期战略部署为泰坦在新
能源充电领域赢得了优势地位。但短期 4 个月内，公司 2015 盈利能否转正存在很大
风险。
Volume
3
Price
45k
40k
2
Financial Table
35k
30k
2
25k
20k
1
15k
10k
1
5k
Source: Bloomberg
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。1
10/2015
08/2015
06/2015
04/2015
02/2015
12/2014
10/2014
08/2014
06/2014
04/2014
02/2014
0k
12/2013
0
Revenue (m)
YoY (%)
Net income (m)
YoY (%)
Diluted EPS
YoY (%)
ROE (%)
Dividend yield (%)
Free cashflow per share
PE (x)
PB (x)
EV/Ebitda
Debt/Equity
11A
12A
13A
14A
324
-1.9%
41
-41.0%
0.05
-48.3%
7.4%
5.9%
-0.07
13.5
1.0
6.6
0.16
293
-9.3%
15
-64.5%
0.02
-64.3%
2.5%
0.0%
-0.04
28.9
0.7
10.6
0.19
222
-24.3%
(43)
-394.2%
-0.05
-394.2%
-7.3%
0.0%
-0.13
0.6
0.25
225
1.2%
(55)
29.3%
-0.07
28.4%
-10.2%
0.0%
-0.02
1.2
136.1
0.23
Source: SWS Research, Bloomberg
Please also find SWS Research on your Bloomberg terminal at SWSE <GO>, FactSet and S&P Capital IQ.
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Piling in
Titans is the only Hong Kong-listed company with electric vehicle charging equipment as
its core business, as well as being the only company in China with over 10 years of
experience in the charging business. State Grid Corporation of China (SGCC) resumed its
charging equipment procurement with an October tender after a one year hiatus,
awarding Titans a Rmb82m contract (representing 5.5% of the overall tender). The
National Development and Reform Commission’s (NDRC) release of the five-year plan
(2016-20) for electric vehicle charging Infrastructure in November suggests the market
may top Rmb100bn by 2020.
Quick expansion in charging segment. The company generates revenue from installation
of EV charging equipment and providing direct current (DC) products. EV charging
equipment sales rose 433% YoY in 2014 and 42% YoY in 1H15 to account for 62% of
revenue in 1H15, carrying a c.45% gross margin. Sales of electrical products decreased
c.20% YoY in 2014 and 1H15 to contribute 34% of 1H15 revenue, maintaining stable gross
margin at c.25%. With an Rmb82m SGCC contract won in October, we see a continued
shift in the proportions of revenue derived from its charging pile segment. The company
achieved the rapid expansion in charging business scale through cooperation with local
partners. It has already met its target of charging network construction and operation in
five cities by end-2015. Net profit was still negative in 1H15.
High growth of EV charging industry. The NDRC forecast that, in order to support to a
nationwide EV fleet of 5m units by 2020, the country would need an infrastructure of over
12,100 charging and battery-swap stations and over 4.8m independent charging piles. This
represents a 17x expansion in the number of charging stations and a 171x increase in the
number of charging piles from end-2014 numbers, equivalent to a six-year Cagr of 61% for
charging stations and 136% for charging piles. Total investment will range Rmb78-124bn
over the five years to 2020.
A leading stand in a soaring market. Competition within the charging facilities sector is
keen with entrants clustered to enter the market. In contrast with the low-barrier market
for alternating current (AC) piles, rapid-charge DC piles and charging station enjoy
relatively high entry barriers. While market share is difficult to gauge at this early stage in
the development of the market, given Titans’ advanced technology, long experience and
strong track record winning State Grid procurement contracts, management is confident it
can maintain its position in the market.
Valuation. The company is currently trading at 3.6x trailing PB with a HK$1.9bn market
capitalisation. However, the question of whether the company can achieve positive
profitability in 2015 remains a downside risk for the next four months.
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。2
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Deployment for charging and storage business
Titans has 20 years of experience in R&D, production and sales of electric DC products, 10
years in charging equipment. Though company has no major products in sales on energy
storage side, continued R&D expense was spend in deployment of storage business.
Figure 1: Dual drive strategy with two main products
Source: Company, SWS Research
Revenue from electrical DC products and charging equipment for electric vehicles
constitute the two main sources of turnover.
Figure 2: Revenue breakdown, 2012- 1H15
300
13%
250
110
0%
-5%
11
61
-10%
100
-15%
149
50
110
109
-26%
0
2012
Rmbm
10%
5%
1%
200
150
15%
2013
2014
-20%
41
-25%
23
-30%
1H15
Electric Vehicles
PASS products
Power grid monitoring and management products
Charging equipment for electric vehicles
Electrical DC products
Rev growth
Source: Company, SWS Research
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。3
Charging equipment has become the core element of its product mix and strategy, given
rising policy support and market demand for the products. Revenue from charging
equipment contributed more than 60% of revenue in 1H15, on top of which the company
secured Rmb82m in charging equipment contracts in the SGCC’s October tender.
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Figure 3: Charging equipment business revenue
120
Figure 4: Revenue breakdown, 1H15
500%
433%
100
400%
300%
80
200%
60
100%
42%
40
20
-90%
-200%
2012
2013
2014
monitoring
and
managem
ent
products
3%
Electric
Vehicles
1%
Electrical
DC
products
34%
0%
-100%
0
PASS
products
Power grid 0%
1H15
Charging
equipment
for electric
vehicles
62%
Charging equipment for electric vehicles(Rmbm)
YoY Growth
Source: Company, SWS Research
Revenue from charging equipment has fluctuated since 2012, as revenue from the
segment contributed just 6% to the company’s 13A topline after the SGCC imposed a
moratorium on investment in charging equipment until it felt the public was more familiar
with the market. The State Grid resumed procurement in 2014 after noting the influx of
private capital into the market, signalling better familiarity. Management believes the
resumption of procurement in 2015 was partially due to dissatisfaction with construction
of charging infrastructure during its absence from the market, and partially due to urgent
need for charging facilities nationwide to support the government’s targets of promoting
rapid adoption of EV technology by Chinese consumers. With the government now having
laid out clear EV sales targets by 2020, as well as for charging facilities, management sees
little likelihood of a repeat hiatus on purchases by SGCC in the next five years.
Domestic EV charging facilities are not yet built to a unified national standard. Tesla
(TSLA:US) indicated a national standard may emerge at end-2015 or in early 2016. Titans’
charging equipment adheres to the European charging standard. EVs built under other
standards such as BYD’s (1211:HK) will need a special power converter to use Titans’
charging equipment. However, as Titan’s is a member of one of the influential national EV
associations, it is possible that the country will adopt a compatible charging facilities
standard.
Titans guided to enter five cities with its charging network business this year. So far,
company has exceeded the guidance already with a presence in six cities: Beijing, and the
Guangdong Province cities of Zhuhai, Shaoguan, Mianyang, Zhongshan and Shenzhen. The
company generally seeks to enter a city by cooperating with a local partner that can
create synergy within the targeted area. For example, Titans and Zhuhai Urban
Construction Smart Technology formed a joint venture company in deploy a charging
network in Zhuhai. For Beijing, Titans supplies its charging technology and services by
setting up a JV with Pangda Auto (601258:CH) and cooperate with Tsinghua in the
meantime. To enter Zhongshan, Titans cooperated with Broad-Ocean Motor (Hong Kong)
Co. Unlike in tier-I cities such as Shenzhen or Beijing, lower-tier cities offer Titans the
opportunity to become the only supplier of charging networks.
Electrical DC product is a sort of traditional products with broad use in railway and nuclear
power construction. We see 20 years of experience stable gross margin in this market but
c.20% YoY decrease in 2014 and 1H15 sales. With radical construction in high-speed
railway and nuclear power stations, company considers not much risk in application and
demand of its electric DC products in the near future.
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。4
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Charging facilities, a Rmb100bn market
The National Development and Reform Commission issued Guidelines on the
Development of Electric Vehicle Charging Infrastructure (2015-2020) on 17 November
2015. The document provided specific guidelines for charging facilities development in
13th five year. According to the guidelines, in order to meet the demand of 5 million
electric vehicles in 2020, an incremental of over 12,100 charging and battery-swap
stations and over 4.8m independent charging piles need to be built before end-2020.
Three areas, Beijing-Tianjin-Hebei economic region, the Yangtze Delta region and Zhujiang
Delta zoon are required to lead inter-city fast charging network construction. The
government favours public private partnership (PPP) contracts for construction of
charging facilities.
Figure 5: National demand for charging stations and charging piles to 2020
2014
2020
Expansion
Average annual target
No. of charging and
732
12,100
17x
2,420
battery-swap stations
No. of charging piles
28,000
4.8m
171x
960,000
Source: NDRC, MIIT, SWS Research
Figure 6: Market value
Basic
12,100
Best
12,100
3
5
30,250
60,500
4.8
4.8
Proportion of AC charging piles
100%
90%
AC charging piles (m)
DC charging piles (m)
ASP for AC charging piles (Rmb)
ASP for DC charging piles (Rmb)
Investment for Charging piles (Rmbm)
Total investment (Rmbm)
4.8
0
10000
80000
48000
78,250
4.32
0.48
8000
60000
63360
123,860
Charging and battery-swap station
Investment per station (Rmbm, at least four
fast charging piles per station)
Investment for charging and battery-swap
station (Rmbm)
Independent charging piles (m)
2020 target
Market
Assumption
2020 target
Market
Assumption
Industry
Industry
Source: NDRC, Industry, SWS Research
Competition within the charging facilities market is keen with more and more entrants
entering the market.
Titans has three distinct advantages in the charging equipment market:
1)
Longest experience: only one in China that has 10 years of experience in charging
equipment.
2)
Good record in bidding for SGCC contracts: The company claims it has won every bid
made for SGCC charging equipment contracts, demonstrating its firm standing in this
sector and stable quality of products delivered.
3)
Tech barriers: Rapid-charge DC piles and charging stations enjoy relatively high entry
barriers.
Management has confidence to maintain its leading position in charging equipment and
related service sector.
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。5
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
High R&D expense, low profit visibility
Management indicated that the rise of gross margin from 43% in 2014 to 49% in 1H15 for
charging equipment segment is misleading. Overall margin for charging equipment in the
long run should decrease, and the short-term rise is merely caused by increased sales of
DC charging products in 1H15.
Figure 7: Gross margin breakdown, 2013-1H15
Figure 8: Gross margin breakdown, 2014
60%
50%
PASS products
49%
45%
40%
26%
43%
41%
30%
34%
27%
Power grid monitoring and
management products
42%
20%
Charging equipment for electric
vehicles
10%
43%
0%
2013
2014
1H15
2015
Overall gross margin
Electrical DC products
Charging equipment for electric vehicles
Power grid monitoring and management products
PASS products
Electrical DC products
28%
0%
10% 20% 30% 40% 50%
Source: Company, SWS Research
The company’s R&D expenses are included in administrative and other expenses. Given
high Capex planned for 2015, net profitability is not assured.
Figure 9: Administrative and other expenses vs gross profit
80
Figure 10: Net profit (Rmbm)
20
11.79
60
10
40
20
0
0
-10
2012
2013
-20
2014
1H15
-85%
-40
-77%
-60
2013
2014
1H15
-1.88
-20
-30
-118%
-80
-40
Administrative and other expenses (Rmbm)
-50
-33.81
-43.83
Gross profit (Rmbm)
Administrative and other expenses/Gross profit
Net profit attributable (Rmbm)
Source: Company, SWS Research
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。6
Project internal rates of return (IRR) for charging station of public transportation is more
than 15%, based on management statements. With 60-70% debt financing, equity IRR
could be at least two times levered. For other charging stations or separate charging piles,
returns are not as good and they varies dramatically with local circumstances.
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Company structure
China Titans Energy Technology Group was established in 1992 and listed on the Hong
Kong Stock Exchange in 2010. Main products are electrical DC products and charging
equipment. The company also provide power grid monitoring and management services
and is aiming at becoming an operation services provider along with enhanced standing
on product sales.
Titans currently controls 100% of six subsidiaries and two associates. Zhuhai Yilian New
Energy Motors was newly established in 1H15, mainly responsible for the investment,
planning, design, construction and operation of the company’s EV charging network. Apart
from charging and electric DC products, Titans also invests in storage product
development. One of the two associates, Zhuhai Titans New Power Electronics, is
responsible for this line of business.
Figure 11: Company structure
Controling
company
100%
China
Titans
Energy
Technology
Group
(2188 HK)
Anhui Titans Liancheng
Energy Technology
R&D, manufacture and sales of electrical DC products
Zhuhai Titans Power
Electronics
R&D,manufacture and sales of wind and solar power generation
balancing control products, charging equipment for electrical
vehicles and power grid monitoring and management products
Henan Hongzheng Electric
Technology
R&D, manufacture and sales of electrical DC products
Zhuhai Titans New Energy
Systems
R&D,manufacture and sales of electrical power generation
balancingcontrol and other products
Zhuhai Titans Technology
R&D,manufacture and sales of electrical direct current products
Zhuhai Yilian New Energy
Motors
R&D of charging technology and product manufacturing for electric
vehicles
20% in Beijing Aimeisen
Information Technology
R&D of charging equipment
30% in Zhuhai Titans New
Power Electronics
Production and sales of battery formation products
Associates
Source: Company, SWS Research
To enter Zhongshan City in Guangdong Province, Titans offered a 9% stake (19% if fully
exercised) to Broad-Ocean Motor (Hong Kong) Co in its total shareholding structure by
placing new shares and convertible bonds. The placement was completed in October 2015.
To date, no convertible bonds have been converted.
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Figure 12: Convertible bonds
Convertible bonds
Broad-Ocean Motor(Hong Kong)Co
Source: Company, SWS Research
Conversion Price
HK$1.19
Principal amount
HK$100m
Max shares
84,033,613
Maturity
2 years
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Figure 13: Major shareholders
Current shares outstanding
Li Xin Qing (Actual controller)
An Wei
Broad-Ocean Motor(Hong Kong)Co
Honor Boom Investments Limited
(Li Xiao Bin)
Thomas Karl Amade Pilscheur
(Thomas Karl Amade Pilscheur)
Public float
Total shares outstanding
Source: Company, SWS Research
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No. of shares
205,909,875
196,269,875
84,096,000
Percentage
22%
21%
9%
Upon full conversion of CBs
No. of shares
205,909,875
196,269,875
168,129,613
Percentage
20%
19%
17%
82,458,117
9%
82,458,117
8%
66,244,818
7%
66,244,818
7%
290,077,315
925,056,000
31%
100%
290,077,315
1,009,089,613
29%
100%
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
EBITDA
100
Hist Projected
Actual
Projected
150%
% Change
80
100%
60
50%
40
0%
20
-50%
0
-100%
-20
-150%
-40
-200%
FY1 2010
FY1 2012
FY1 2014
FY1 2016
FY1 2018
Source: SWS Research, Bloomberg
Diluted EPS Bef XO Items
0.1
Hist Projected
Actual
Projected
50%
% Change
0%
0.08
-50%
0.06
-100%
0.04
-150%
0.02
-200%
0
-250%
-300%
-0.02
-350%
-0.04
-400%
-0.06
-450%
FY1 2010
FY1 2012
FY1 2014
FY1 2016
FY1 2018
Source: SWS Research, Bloomberg
Net Income/Net Profit (Losses)
80
Hist Projected
Actual
Projected
50%
% Change
0%
60
-50%
40
-100%
-150%
20
-200%
0
-250%
-300%
-20
-350%
-40
-400%
-60
-450%
FY1 2010
FY1 2012
Source: SWS Research, Bloomberg
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。9
FY1 2014
FY1 2016
FY1 2018
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Thursday, 03 December, 2015
Bringing China to the World
Sales/Revenue/Turnover
350
Hist Projected
Actual
Projected
5%
% Change
300
0%
250
-5%
200
-10%
150
-15%
100
-20%
50
-25%
0
-30%
FY1 2010
FY1 2012
FY1 2014
FY1 2016
FY1 2018
Source: SWS Research, Bloomberg
Return on Equity
25
Hist Projected
Actual
Projected
50%
% Change
0%
20
-50%
15
-100%
10
-150%
5
-200%
0
-250%
-300%
-5
-350%
-10
-400%
-15
-450%
FY1 2010
FY1 2012
FY1 2014
FY1 2016
FY1 2018
Source: SWS Research, Bloomberg
Cash Flow per Share
0
Hist Projected
Actual
Projected
200%
% Change
-0.01
0%
-0.02
-0.03
-200%
-0.04
-0.05
-400%
-0.06
-600%
-0.07
-0.08
-800%
-0.09
-0.1
-1000%
FY1 2010
FY1 2012
Source: SWS Research, Bloomberg
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。10
FY1 2014
FY1 2016
FY1 2018
Fortune Cookies
Thursday, 03 December, 2015
Bringing China to the World
Appendix
Income Statement
HK$m
2011
2012
2013
2014
Revenue
323.6
293.4
222.0
224.7
Operating Income
62.4
24.6
-36.3
-6.2
Pretax Income
62.2
20.3
-48.1
-56.9
Income bef XO Items
39.8
14.4
-43.2
-54.1
Net Income
40.8
14.5
-42.7
-55.2
Basic EPS Before XO Items
0.05
0.02
-0.03
-0.02
Basic EPS
0.05
0.02
-0.05
-0.07
Diluted EPS Before XO Items
0.05
0.02
-0.03
-0.02
Diluted EPS
0.05
0.02
-0.05
-0.07
Dividends per Share
0.04
0.00
0.00
0.00
68.15
31.73
-26.51
4.46
7.37
2.48
-7.29
-10.22
HK$m
2011
2012
2013
2014
Total Current Assets
780.4
881.3
722.0
678.4
Total Long-Term Assets
100.9
116.6
132.4
94.1
Total Assets
881.3
997.9
854.4
772.5
Total Current Liabilities
283.1
360.9
268.0
246.8
Ebitda
Return on Common Equity
Source: Bloomberg
Balance Sheet
Total Long-Term Liabilities
14.2
13.7
12.0
11.6
Total Liabilities
297.3
374.6
280.0
258.4
Total Shareholders' Equity
584.0
623.4
574.4
514.1
Shares Outstanding
830.0
830.0
830.0
839.5
Book Value per Share
0.70
0.72
0.69
0.61
Tangible Book Value / Sh
0.70
0.72
0.69
0.61
66.26
62.46
67.23
66.55
HK$m
2011
2012
2013
2014
Net Income
40.8
14.5
-42.7
-55.2
5.8
7.1
9.8
10.7
Change in Working Capital
-7.3
19.0
-82.2
-11.2
Cash - Operating Activities
-25.0
-9.5
-95.9
-14.1
Capital Expenditures
-30.4
-19.6
-11.0
-3.7
Cash - Investing Activities
-91.3
-56.7
101.2
-11.8
Shareholder Equity/Total Liab
Source: Bloomberg
Cash Flow Statement
Depreciation and Amortisation
Cash - Financing Activities
9.3
61.8
-8.9
0.7
Net Changes in Cash
-107.0
-4.4
-3.6
-25.2
Free Cash Flow
-55.35
-29.15
-106.89
-17.80
Free Cash Flow / Basic Sh
-0.07
-0.04
-0.13
-0.02
Free Cash Flow / Diluted Sh
-0.07
-0.04
-0.13
-0.02
Cashflow per Share
-0.03
-0.01
-0.12
-0.02
Source: Bloomberg
本研究报告仅通过邮件提供给 民生加银 民生加银基金管理有限公司(research@msjyfund.com.cn) 使用。11
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