Opportunity of Intelligent Digital Signage under "new infrastructure" upsurge

Since the outbreak of the epidemic, the concept of new infrastructure construction (hereinafter referred to as "new infrastructure") has been pushed to the forefront with the launch of the 47 trillion yuan investment plan in 22 provinces and municipalities and the policy guidance from the central leadership. The commercial display industry, with its new infrastructure boom, will also see new opportunities under the onslaught of the epidemic.

As a matter of fact, "new infrastructure" is not a brand new concept. As early as the central economic work conference held at the end of 2018, the positioning of "new infrastructure construction" was made clear, mainly covering seven fields, including 5G relying on the technological end, industrial Internet and charging piles for new energy vehicles.

Sales of new energy vehicles have been rising steadily

Focusing on the new energy vehicle charging pile industry, in recent years benefited from the subsidy policy and the advantages of license plate and other factors, the new energy vehicle increment for two consecutive years more than 1 million, showing a rapid growth trend. Especially in 2018, when China's auto market suffered its first year-on-year decline in 30 years, new energy vehicles bucked the trend and rose, with production and sales both increasing by about 60% year on year. Among them, 984,000 pure electric vehicles were sold, accounting for about 78.3% of the production and sales of new energy vehicles.

In 2019, under the influence of such factors as transformation and upgrading, environmental standard switching and new energy subsidies, the sales volume of new energy vehicles declined slightly, but the overall trend of the whole year was good. The sales volume of new energy vehicles in 2019 decreased by 4.0% year on year, of which 972,000 were pure electric vehicles, down 1.2% year on year. Sales of plug-in hybrid vehicles fell 14.5 per cent to 232,000 units.

Judging from the growth rate in recent years and the recent positive signals sent by the government on the subsidy policy, the sales volume of new energy vehicles is expected to reach 1.35 million in 2020.

2012-2020f sales volume change of new energy vehicles in China

Data source: RUNTO, according to the public data collation unit: 10,000 units

Charging piles have a broad market prospect

In the context of the rapid development of new energy vehicles, as the most important link in the downstream of the electric vehicle application industry chain, the supporting charging infrastructure construction is relatively backward due to the constraints of many problems in the industry, such as low cost efficiency, opaque operation mode, unclear profit means and poor user experience. The charging pile market began to enter the explosive growth period after 2016. By the end of 2019, the total number of charging piles nationwide was about 1.22 million, with a year-on-year growth of 50.8%, and the ratio of vehicle piles was 3.4:1.

Under the dual drive of policy support and market demand, the charging pile industry still has a large potential for development, and will enter a period of rapid development of large-scale construction in the next few years. It is estimated that the charging pile quantity will reach 1.8 million in 2020.

2012 ~ 2020F China EV charging pile sales change

Data source: RUNTO compiled according to public data, unit: 10,000 units

Smart advertising machines will meet new opportunities

Intelligent charging piles, which conform to the trend of the Internet of things, are the most promising segments of the charging piles, and the current market situation is a blue sea. By the end of 2019, there were 22 large-scale operators (with charging piles holding quantity ≥1000) in China, accounting for 99.5% of charging piles. The top three are special power, star power and the national grid. State grid, for example, operates charging piles with an interconnection rate of more than 90%.

With the continuous improvement of the connection rate of charging piles, more and more enterprises have found opportunities to release information in a large amount of time in a fixed place. In recent years, enterprises such as Xunbao, Judian, Qijun, Xinyi andSuosu have entered the charging pile market one after another and realized intelligent operation such as information release by using the charging pile of intelligent advertising machine mounted on the screen. From the perspective of development status, the load rate of display screen is far less than expected. Bobo Liu, analyst of public information display supply chain at RUNTO, believes that there are several reasons for the low screen penetration:

Low advertising efficiency: limited by application scenarios and equipment, the current intelligent charging pile display equipment is mainly small screen, visual impact is small, the conversion rate and value of advertising investment is difficult to quantify scientifically, it is generally believed that it is difficult to achieve the expected return.

Narrow audience: the user group is basically fixed as the owners of electric cars, and the applicable advertisements and advertisers are relatively single. In addition, the audience base is small and the input and output are low, which makes it difficult to form commercial value.

The profit prospect is not clear: for the hardware business of charging pile of intelligent advertising machine, charging operator and media business, the profit means is single, and the profit distribution is difficult to ensure the interests of all parties. At present, the charging service fee is difficult to support the construction and operation costs of charging facilities, and the investment return cycle is long. Secondly, the current scale of charging facilities and electric vehicle market is still in the early stage of development, and most investors still hold a wait-and-see attitude towards this field.

Wang peiyong, chairman of Xunbao intelligent co., LTD., believes that the future of the charging pile of intelligent advertising machine lies in, on the one hand, the expansion of the market terminal base; On the other hand, to develop more diversified means of profit, through the collection of niche data information to explore the value of this particular user, rather than relying solely on advertising operations.

With the active guidance and steady progress of the "new infrastructure" policy, the market of new energy vehicles and charging piles will accelerate to maturity. The popularization of urban Internet of things projects, the upgrading of high-power and fast-charging equipment, and the replacement of V2G intelligent charging equipment will attract market capital to actively lay out the segments of the downstream of new energy vehicles, and the intelligent advertising machine charging pile industry will embrace a big leap in both business model and product technology. RUNTO predicts that the penetration rate of charging piles for smart advertising machines will exceed 25% in 2022.