Higher demand from State Grid
? Wasion announced that it secured an Rmb137.7m contract in State Grid’s central bidding in 2022.
? Based on our understanding, the last round of central bidding is related to the procurement plan in 2021.
? We believe that Wasion’s strategic cooperation agreement with China Power has created growth potential. Wasion remains one of the beneficiaries of recent policies on the Internet of Energy, energy storage, carbon emissions reduction goals and new infrastructure.
? We reiterate our positive view on Wasion.
State Grid’s latest bidding results imply higher demand
? Wasion announced that it won contracts for about 294,000 smart meters with a contract value of about Rmb95.51m. Wilfar [68811.CH] won a contract for 36,500 data collection terminals and concentrators with a contract value of about Rmb42.15m. In total, Wasion has won contracts valued at Rmb137m in State Grid’s centralized bidding in 2022. Based on our understanding, Wasion ranked no.1 in terms of contract value in this round of tenders. Based on our understanding, this round of tender is the third tender for smart meters and power usage data collection equipment in 2022 (procurement plan formed in 2021). We expect another two rounds of tenders to be launched in 2022.
Progress regarding the agreement with China Power
? In late Feb 2022, China Power and the Ningxia Autonomous Region Yanchi County Government and Zhongning County Government signed an agreement regarding investment in the construction of green transportation and new energy. Wasion was invited to join and participate in the projects. As a strategic partner to China Power, Wasion will actively participate in the projects undertaken by China Power in the future, and will provide China Power with high quality products and services covering the entire process of project feasibility studies, development, project approval, construction, operation and maintenance in new energy-related fields, involving photovoltaic power stations, energy storage power stations and heavy-duty truck charging and exchange stations. Wasion and China Power will also actively participate in other new energy projects in Ningxia that revolve around the Ningxia-to-Hunan power supply project. We
maintain the view that Wasion, as a total solutions provider, will capture the growth potential from the development of new energy projects through cooperation with China Power. We believe that Wasion Holdings will leverage China Power’s resources (financial and pipelines) and grow with the huge CAPEX outlay. This will also help Wasion shorten the learning curve and development time.
Reiterate our positive view of Wasion
? We believe that apart from a sector rerating, company-specific catalysts include more disclosure about its roadmap and achievements in areas such as the Internet of Energy, energy storage, carbon emissions reduction goals, and new infrastructure. We also believe that Wasion Holdings will be one of the beneficiaries of the Chinese government’s investment in new infrastructure.