New Energy Industry August 2012 Investment Strategy: New Energy Vehicles Entering Purchasing Peak

Nuclear power: In July, the situation of nuclear power at home and abroad continued to improve, and the environment for restarting nuclear power in China is gradually maturing. It is recommended to pay attention to the dynamics of the nuclear power window in August, and the restart may be delayed until November, giving the nuclear power industry a “neutral” rating. From an operational point of view, the installed capacity will increase by more than 6 times by 2020, and operators and related consumables will continue to improve for a long time. It is recommended to pay attention to Jiangsu Shentong and so on. At the same time, the overall localization rate of all domestic and under construction nuclear power plants is only 61.72%. Especially in nuclear islands, the task of localization of equipment is still quite arduous. It is recommended to pay attention to equipment manufacturers that have just realized and are implementing import substitution, and recommend self-tested shares, etc. . In the short term, 2012-2013 is the peak period for the delivery of nuclear power equipment, and it can focus on nuclear island equipment suppliers with the longest delivery cycle and greater impact on nuclear power, including Dongfang Electric.

Photovoltaic: Italy's fifth energy law was formally passed. Germany's latest subsidy reduction plan has been finalized. The German and Italian markets are expected to shrink gradually in the second half of the year, but emerging markets such as China, Japan, and the United States have risen rapidly. In 2012, global demand was basically the same as 2011. , Maintain at 25-30GW. The international trade war in the photovoltaic industry has deepened, and the core issue is still the downturn in the business climate, and the contradiction between overcapacity is prominent. It is expected that the photovoltaic industry will still be in the capacity adjustment stage throughout the year, and the elimination of high-cost production capacity will continue. It is expected that the first round of reshuffling will basically be completed in the fourth quarter or the first quarter of 2013. According to the profitability of photovoltaic companies in 2012, the valuation of A-share PV companies is still relatively high, giving the PV industry a “neutral” rating, and can focus on Zhongli Technology, the leading BT model of domestic photovoltaic power plants.

New energy vehicles: In the first half of 2012, new energy automobile policies were frequent and the industry's development accelerated. The "Energy-saving and New-energy Automobile Industry Development Plan" was formally introduced and clarified that "pure electric drive" and "plug-in hybrid drive" are the technological development directions of new energy vehicles. In 2012, it was the end of the “Ten Thousand Cities in Ten Cities”. Policy pressure will bring about a surge in municipal procurement demand in the second half of the year, and the market is expected to show growth of more than 100%. In the next 3-5 years, electric vehicles will still need to rely on state policy subsidy to be promoted. At this stage, the economical and energy-saving advantages of hybrid electric vehicles are highlighted, and it is expected that the auto-industry will be realized before the market's spontaneous promotion. The “New Energy Vehicles - Lithium Batteries and Battery Management System (BMS) - Battery Upstream Raw Materials” industrial chain will benefit the government procurement as a whole, and profitability will gradually improve in the second half of the year, giving the new energy auto industry a “recommended” rating. The company directly benefited from government procurement of BYD, a leading domestic electric vehicle, and Desai Battery, a company related to BMS.