The speed of promotion of amorphous transformers is expected to accelerate: From the acquisition of Jianxin Electric (600517) by State Grid and the establishment of a joint venture with Antai Technology (000969), State Grid intends to promote non-alloy transformers on a large scale. The market has been worried about the speed of promotion of amorphous materials. This acquisition and joint venture proves the attitude of State Grid in amorphous alloy transformers.

Amorphous alloy transformer energy-saving effect is obvious, the market is vast. According to the experimental statistics, amorphous alloy transformers have a reduction of approximately 80% in no-load losses compared to conventional transformers and an approximately 85% drop in no-load current. This is the most ideal energy-saving transformer for distribution, and is particularly suitable for distribution in rural power grids and developing regions. In areas with low utilization rates, intermittent energy sources such as wind power also have a good application effect. Amorphous transformers have obvious energy-saving effects. The proportion of amorphous alloy transformers used in developed countries has exceeded 15%, while China has not yet reached a 1% ratio, and there is ample room for the future.

The speed of promotion may be limited by the localization speed of amorphous strips. State Grid’s acquisition and establishment of a joint venture company demonstrated its determination to implement non-alloy transformers. We believe that the current promotion speed depends on the production of amorphous strips by Antai Technology and the State Grid Joint Venture.

Amorphous alloy transformer related companies will benefit. Judging from the tender share, the company’s market share has not increased significantly and the competition is basically stable. We believe that the acquisition of Credit Electric by the State Grid Corporation is conducive to the promotion of amorphous alloys, but it does not mean that it believes that electricity monopolizes this field. Once the large-scale promotion of amorphous alloy transformers, the company will benefit from adequate technology reserves. The current market share of Conviction Electric is approximately 70%. We believe that with the large-scale promotion of amorphous alloy transformers, other related companies will actively enter. Its market share may have a certain degree of decline, but it still maintains its leading position.

Investment advice: In addition to focusing on directly benefiting the company's Trust Electric (600517) and Antai Technology (000969), it is recommended to pay attention to the Beijing Kerui (002350) (002350), which is a mature technology for amorphous alloy transformers. Currently, the independent research and development of non-alloy transformers has been successful. With a certain sales scale, the company is one of the members of the Beijing Amorphous Industry Alliance (including Antai Technology). After the large-scale promotion in the future, the raw materials are more secure and have certain first-mover advantages.

Investment risk: The joint venture company's strip production is much lower than expected.