《Smart Grid智能电网报告.ppt》由会员分享，可在线阅读，更多相关《Smart Grid智能电网报告.ppt（11页珍藏版）》请在三一办公上搜索。
1、Company,GlobalMarketsResearch,2010E,2009E,Hold,2.15,3.30,16.0,Buy,Buy,7.9,2010E,2010E,Hold,Hold,11.5,1.62,17.9,8.8,North America United StatesTMT Emerging technology8 February 2009,Smart Grid UpdateDistribuTECH,stimulus andearningsCarter B Shoop,CFA Bheeshm ChaudharyResearch Analyst Research Associa
2、te(+1)415 617-3043(+1)415 617-,Industry UpdateTop picksESCO Technologies(ESE.N),USD34.46Companies featuredESCO Technologies(ESE.N),USD34.462008A 2009EEPS(USD)1.80 1.80P/E(x)23.4 19.2EV/EBITDA(x)12.1 9.5Itron(ITRI.OQ),USD63.172007A 2008EEPS(USD)2.81 3.38,P/E(x),27.1,18.7,19.1,Industry outlook remains
3、 promising despite NT uncertaintiesFollowing DistribuTECH,senate negotiations on the stimulus bill and earningsfrom several smart metering companies last week,we believe the outlook forsmart metering companies remains encouraging longer-term.That said,wecontinue to believe that investor enthusiasm a
4、round the impact of the stimulusneeds to be tempered and recommend investors take a more measured outlookon the sector over the next several months.Reiterate Buy on ESCO and Holds onItron,Echelon and Badger.DistribuTECH 2009 recapOur key conclusion from DistribuTECH was that private smart grid compa
5、niesmomentum is accelerating.In addition to Silver Spring Networks announcementthat it won Pepco,conversations with several contacts suggested that the shortlists for major smart grid projects are being increasingly dominated by privatecompanies.Other key takeaways include 1)the traditional metering
6、 market isslowing down in the US and internationally faster than previously anticipated(-ivefor Itron),2)Itrons lack of AMI meters in the field is becoming increasinglyapparent and problematic,3)ESCO and Echelons pipeline for large AMI projectsremains limited and 4)competition for smart grid RFPs is
7、 intensifying.Stimulus:deal close at hand but impact largely unknownThe stimulus bill could be signed by the President as early as this week,whichwould give smart grid companies,utilities and PUCs a clear understanding of thebill and its implications by late April.While it appears that the House and
8、 Senateagree on the size($4.5B)and type(matching grants up to 50%of a utilitysinvestment)of stimulus for the smart grid,there are questions about who will getthe funding.If the funds are doled out to California IOUs and other early adopterswho have already announced their intentions to invest,we est
9、imate thatcompanies like Itron will see less than$40mln a year in incremental stimulusrelated revenue.,EV/EBITDA(x)17.2 11.5Echelon(ELON.OQ),USD6.992008A 2009EEPS(USD)-0.64-1.14P/E(x)EV/EBITDA(x)Badger Meter(BMI.N),USD28.972008A 2009EEPS(USD)1.69 1.42P/E(x)24.8 20.4EV/EBITDA(x)13.4 10.2,Reiterate Bu
10、y on ESCO,Holds on Itron,Echelon and BadgerWhile we dont see many near-term catalysts for ESCO,we like the valuation(14xCY09 EPS x-amortization;30%discount to ITRI)and believe the company has anattractive collection of diverse assets as well as a seasoned mgmt team with agreat track record of alloca
11、ting capital.While Itron and Badger have strongfranchises and promising longer-term outlooks,rich valuations keep us at Holdratings.At 2.9x CY09 sales and profitability nowhere in sight,we believe shares ofEchelon are also fully valued.Reiterate Hold(please see detailed valuations forcompanies on pa
12、ges 4-5).,Upcoming eventsDB Small and Mid Cap ConferenceNational Electricity Delivery Forum,DateFeb 10-12,Feb 18-19Itron 4Q08 earnings resultsFeb 18Metering AmericaMarch 22-25Deutsche Bank Securities Inc.All prices are those current at the end of the previous trading session unless otherwise indicat
13、ed.Prices are sourced from localexchanges via Reuters,Bloomberg and other vendors.Data is sourced from Deutsche Bank and subject companies.DeutscheBank does and seeks to do business with companies covered in its research reports.Thus,investors should be aware that the firmmay have a conflict of inte
14、rest that could affect the objectivity of this report.Investors should consider this report as only a singlefactor in making their investment decision.Independent,third-party research(IR)on certain companies covered by DBSIs researchis available to customers of DBSI in the United States at no cost.C
15、ustomers can access IR athttp:/or by calling 1-877-208-6300.DISCLOSURES AND ANALYST CERTIFICATIONS ARELOCATED IN APPENDIX 1.,8 February 2009Page 2,Emerging technology Smart Grid UpdateDistribuTECH 2009 recapFollowing over 20 one-on-one meetings with smart grid/metering companies,utilities andindustr
16、y consultants,along with several other conversations with employees at the variousbooths,our key conclusion from DistribuTECH was that private smart grid companiesmomentum is accelerating.In addition to Silver Spring Networks announcement that theywon Pepco,conversations with several contacts sugges
17、ted that the short lists for majorsmart grid projects are being increasingly dominated by private companies.Other keytakeaways from the show where that 1)the traditional electric,gas and water meteringmarket is slowing down in the US and internationally faster than previously anticipated(-ivefor Itr
18、on),2)Itrons lack of AMI meters in the field is becoming increasingly apparent andproblematic,3)ESCO and Echelons pipeline for large AMI projects remains limited and 4)competition for smart grid RFPs is intensifying.Private companies gaining momentumWe spent considerable time at DistribuTECH learnin
19、g more about Silver Spring Networks,Landis+Gyr,Elster,Sensus,Trilliant,GridPoint,eMeter,etc.In addition to meeting withsenior level executives at each firm,we met with many of their customers,integrators andconsultants.Of all the smart metering companies at the show,we were most impressed with Silve
20、rSpring Networks.Following meetings with the companys CFO,VP of Markets,ChiefScientist and its 2 largest customers(FPL and PG&E),we feel that SSN has quickly emergedas the company,along with Itron,to beat in the smart grid industry.In addition to having oneof the industrys most compelling technologi
21、cal offerings,the company has an impressive listof customers(FPL,PG&E,Pepco,etc),a large scale deployment at FPL that is exceedingexpectations(high packet success rate)and financial backing from well connected VC firms.The most common complaint that we heard about SSN going into the show was that wh
22、ileits RF-based mesh network was fast and IP-based,it wasnt truly open.The core RFtechnology is proprietary(like most of its competitors technology),which makes itimpossible to communicate with its network unless you have a SSN-enabled radio.At theshow,we learned that while the company plans to keep
23、 this networking technologyproprietary in nature,it is going to start licensing out the technology.This wont completelysilence its critics,but it will enable other radio and T&D equipment manufacturers tocommunicate over the network and broaden the companys reach.Over time,we envisionSSN increasingl
24、y becoming a software and services solutions company,versus most of itscompetitors more hardware-centric approach today.GridPoint is another well-funded(raised over$220mln in VC money)smart grid company thathas also been transitioning away from hardware to software and services.Over the past 2years,
25、the company has transformed itself from a residential storage solution provider tomore of an enterprise software and solutions company for utilities.GridPoint is helpingutilities accomplish one or all of the following:measure,control and verify customer loads at point of consumption(via a GridPointo
26、r 3rd party smart thermostat)integrate distributed renewable energy(wind,solar,geothermal,etc)integrate energy storage systems(utility scale)integrate PHEVsDeutsche Bank Securities Inc.,8 February 2009,Emerging technology Smart Grid UpdateWe believe there will be substantial demand for an offering l
27、ike GridPoints over the nextseveral years.A standardized solution offering like GridPoints should gain traction as utilitiesstruggle to manage the myriad challenges of evolving from a utility with little customerinteraction,centralized generating assets and a dumb grid,to a smarter utility.The utili
28、tyof the future will increasingly rely on intermittent,distributed and renewable generatingassets,while at the same time engaging its customer base like never before(PHEVs,dynamic pricing,residential renewable generation,etc).While GridPoint isnt as far along asSSN in regards to commercialization,it
29、 has partnered with Xcel Energy on several projectsincluding SmartGridCity in Boulder and a wind-to-battery project in South Dakota.Traditional meter business slowingWe met with many of the leading electric,gas and water metering manufacturers andconcluded that demand started to slow in the 4th quar
30、ter and remained weak in January.Assuch,we believe many companies or investors who are expecting the global meteringmarket to grow in 2009(Itron)will be disappointed.While difficult to estimate given thebreadth of the market,we estimate that Actaris revenue growth rate in 2009 could trenddown in the
31、 low-to-mid-single digits(on a constant currency basis;we are currentlyforecasting 2%Y/Y growth in CC and-3%Y/Y overall).Itrons lack of AMI meters in the field limiting chances for new winsItron has the largest backlog of AMI smart meters in the industry,but has fallen behind itscompetitors in getti
32、ng the meters in the field working properly.We believe there are a hostof reasons why Itron has not ramped to volume or may delay its scheduled ramps in 2009with SCE and others,including 1)regulatory delays,2)changing utility requirements,3)a lowpacket success rate and 4)delays at other vendors who
33、are participating on the RFP(MDM,etc).This lack of successful deployments in the field is hurting Itrons chances of winningfuture projects.For the next round of RFP awards,we believe utilities are increasingly lookingto how well a vendors technology is working in the field,versus performing detailed
34、 pilotprojects as they have done in the past(Itron won SCE,SDG&E,DTE and CNP based on howwell its pilots performed versus competitors).In addition to Silver Spring Networks 100,000 point deployment at FPL,we learned atDistribuTECH that a private company is ramping aggressively at Oncor and is approa
35、ching oralready at the critical 50,000 meter mark(if a network can scale to 50,000 meters and workwell,there is a good chance that it will successfully scale to full volume).If this private vendorreaches 50,000,they will be the 4th vendor,to our knowledge,that has deployments inexcess of 50,000 mete
36、rs in the field(of which at least 2 are working well).New deal pipeline not promising for ESCO or EchelonWe believe private companies are increasingly populating the short lists of the AMI RFPs inNorth America.While Itron is usually in the mix,our contacts suggest that their currentsuccess rate is u
37、nsustainable.In fact,all of the large(1mln points)contracts that webelieve will be announced in 2009 could go to private companies(we are expecting 3-5announcements).Unlike Itron,we dont see ESCO or Echelon on,or near,the short-lists forthe next several contracts.While ESCO remains well positioned i
38、n other parts of the industry(co-ops/munis,water and gas utilities,international electric utilities,etc),we believe thatEchelons only near term opportunity in the NA market is with Duke.Competition remains intenseThe number of companies in attendance who directly compete with Itron,ESCO and Echelonf
39、or smart metering contracts in North America speaks volumes about the competitiveenvironment(Silver Spring Networks,Landis+Gyr,Elster,Sensus,Trilliant,SmartSynch,Eka,Tantallus,Cannon,Arcadian Networks and Metrum).While we think the AMI market willconsolidate(similar to the AMR market),look for the p
40、ricing environment to remain,Deutsche Bank Securities Inc.,Page 3,8 February 2009Page 4,Emerging technology Smart Grid Updateaggressive for at least the next 3-5 years.In fact,we believe margins for AMI contracts aresignificantly below those for AMR.Stimulus:deal close at hand but impact largely unk
41、nownIt appears that the Senate has reached a compromise on the stimulus and could approve itMonday.If the Senate-House negotiations proceed quickly,the bill could be signed later thisweek by the President.Following the DOE review,smart grid companies,utilities and PUCsshould have a clear understandi
42、ng of the bill and its implications by late April.While itappears that the House and Senate agree on the size($4.5B)and type(matching grants up to50%of a utilitys investment)of stimulus for the smart grid,there are several unknowns.Inour view,the two biggest question marks are:What percentage if any
43、 of the stimulus will go to already announced projects?WillCalifornia and other IOUs(CNP,Pepco,etc)who have already announced detaileddeployment schedules,but not begun smart grid deployments,get funding?WithWaxman,Pelosi,Boxer,etc in the thick of the negotiations,we believe the CaliforniaIOUs will
44、get some funding.If these early adopters receive 50%grants for theirplanned investments,it will leave roughly half of the stimulus for new unannouncedprojects.If we include contracts that we believe will be announced over the next12-18months,regardless of the stimulus,we are looking at less than$1B
45、of actualstimulus to the industry.Assuming this is all used for smart metering programs(which it wont),that translates into roughly 6mln new meters being subsidized.This is based on the assumption that each smart metering initiative costs$300 permeter(all-in)and that each utility receives a 50%match
46、ing grant.If a company likeItron wins a quarter of those contracts(1.5mln meters),it would add roughly$150mln to revenue over the time it takes to deploy the meters(a typical 4 yeardeployment schedule translates into less than$40mln in additional revenue peryear).When will the investments in the gri
47、d need to be completed or initiated by toreceive federal funding?Given the time it takes a utility to select a vendor and toget state regulatory approval,we dont believe we will see accelerated smart gridinvestments from the stimulus until 2010 at the earliest.Given Obamas desire forshovel-ready pro
48、jects,some of the$4.5B may be redirected to more traditional gridinvestments(transformers,switches,circuit breakers,transmission and distributionlines,etc)that can boost the economy immediately.Reiterate Buy on ESCO,Holds on Itron,Echelon and BadgerFollowing DistribuTECH,senate negotiations on the s
49、timulus bill and earnings from severalsmart metering companies last week,we believe the outlook for smart metering companiesremains encouraging longer-term.That said,we continue to believe that investor enthusiasmaround the impact of the stimulus needs to be tempered and recommend investors take amo
50、re measured outlook on the sector over the next several months.Reiterate Buy on ESCOand Holds on Itron,Echelon and Badger.ESCO Technologies:Buy;PT$38Our PT assumes that ESCO trades at 15x our CY09 EPS est x-amortization to incorporatetemporarily depressed margins from accelerating R&D investments.We
