Core competitiveness of TBEA transformer leader

TBEA: Transformer leading core competitiveness (Figure)

TBEA is a listed enterprise mainly engaged in the production and sales of transformers and related equipment. It is the most competitive enterprise in the domestic transformer industry. The company now has an annual production capacity of 100 million KVA, which exceeds the domestic level of 70 million KVA of Tianwei Group, ranking first in China and third in the world. Among the company's main products, transformer is the core of the company. This business accounted for 58% of the company's revenue in 2007 and 710% of the profit. The import amount in January was more than US $1.566 million. The products have been in short supply, especially in high-end transformers, with a market share of more than 20%

the company is short of talents, and its subordinate Shenbian and hengbian are the two subsidiaries with the largest production capacity. Among them, Shenyang substation is the manufacturer of transformers with the highest voltage level and maximum capacity in China, and its products are mainly 500-1000kv transformers. At present, the annual capacity of Shenyang substation is 50 million KVA. The balance transformer focuses on the production of high-voltage reactors, including 500-1000kv reactors and 500-750kv transformers, of which the market share of reactors reaches 50%. The current capacity of hengbian transformer is about 40 million KVA

while ensuring the domestic leader of transformer, the company also actively explores the field of new energy (solar energy) and new materials. Xinjiang new energy invested by the company mainly produces monocrystalline silicon, and is building a production line with an annual output of 1500 tons of polycrystalline silicon. In addition, the company also produces battery cells and battery components in a joint venture with BP. Although we believe that due to the high production technology requirements of polysilicon, it is very difficult to produce large-scale polysilicon in China, the new energy business will still bring the company some performance improvement of drop hammer impact testing machine and non-metallic impact testing machine in the future. Xinjiang Zhonghe, which is controlled by the company, has also actively entered the new material industry. It has changed from a simple electrolytic aluminum enterprise to a company focusing on the production of new materials such as electronic aluminum foil

while maintaining the industry leader in China, the company also plans to expand overseas markets. The company's products have been adopted by countries such as the Middle East, the United States and Europe. The new change of the company will shoulder this important task

as the biggest problem facing the company is the lack of production capacity, the company is trying to change this situation. It is expected that the production capacity of the company will increase from the existing 100 million KVA to 150 million KVA in 2009, including 80 million KVA in Shenyang substation and 60 million KVA in balance substation. However, we believe that the rapid expansion of production capacity also has the hidden worry of overcapacity in the future, even if the power investment in the eleventh five year plan will reach 900 billion yuan. In addition, silicon steel accounts for 35% and copper aluminum accounts for 25% of the cost of the transformer, while the price of the above raw materials varies and the scale of the production enterprise is huge, so the bargaining power of the company is insufficient. In contrast, due to the uniqueness of the downstream users of the company's products, the company does not have bargaining power. Therefore, the company does not have bargaining power at both upstream and downstream ends. We believe that this is a great risk faced by the company

generally speaking, the company is a high-quality company with investment value, and investors are recommended to hold it in the medium and long term

the author declares that to the best of my knowledge, the institution, myself and the interested parties in the property have no interest in the securities evaluated. The views of this paper are only for investors' reference and do not constitute investment suggestions. Investors operate accordingly at their own risk