[China Securities Journal] Luen Mei Holding Made Industrial Layout of Heat Pump Based on Optimistic View for the Industry

Release Time:2022-10

The concept of heat pump has continued to rise recently. On September 27, the air energy heat pump sector index rose 2.19% to 988.69 on a single day. As for the news, the European Union recently released a 565 billion euro energy plan, which explicitly mentions the installation of 10 million heat pumps in five years. The insiders pointed out that this measure would undoubtedly benefit Chinese enterprises in exporting heat pump products to Europe. Under the background of the European energy crisis and carbon emission reduction, companies who have made layout on heat pump business on A-share market usher in a new round of opportunities, and the market prosperity rose.

At present, the localization of the supply chain has been realized in China’s heat pump industry, and the overall heat pump market has maintained a high growth rate. According to the data of the Yearbook of China's Heat Pump Heating Industry Development in 2021, the market size of China's air source heat pump industry reached RMB 24.82 billion in 2021, with a year-on-year increase rate of 22.87%; the market size of water ground water source heat pump reached RMB 1.29 billion, and the market size of other heat pumps reached RMB 426 million. From the proportion of installed capacity in the global total capacity, the proportion of installed capacity of China’s ground water source heat pumps has risen from 0.04% to 23.61%, and the proportion of installed capacity of China’s ground source heat pumps in the global total capacity has risen to 34.11%, and the growth rate is accelerating continuously.

In the heat pump field, Luen Mei Holding has the water source heat pump project with the largest single unit installed capacity in China. Guohui Environmental Protection New Energy Co., Ltd. (hereinafter referred to as "Guohui New Energy"), a subsidiary of Luen Mei Holding, began to explore the recovery and recycling of urban sewage as early as 2007, and invested in the construction of the reclaimed water source heat pump heat supply project in Yuhong New City, Shenyang, using the patented self-developed thermodynamic centrifugal water source heat pump technology.

 Relying on the thermal thermodynamic water source heat pump technology, Guohui New Energy extracted the heat from the treated reclaimed water (about 12 ℃) of Xiannuhe Sewage Treatment Plant and circulated with the boiler, realizing the effective combination of renewable energy and traditional energy, which not only ensures the quality of heating, but also greatly reduces the pollution problem of traditional energy. In 2015, the project was included in the "Key Energy Saving and Emission Reduction Technology Catalog" by the People's Government of Liaoning Province.

In 2021, Guohui New Energy expanded the reclaimed water source heat pump project. The expanded project could realize the zero carbon heat supply for the building of more than 3 million square meters, providing a valuable demonstration effect for the comprehensive utilization of urban sewage and zero carbon clean heating.

In addition, Luen Mei Holding mentioned in Environmental, Social and Governance Report 2021 that, for the new heating business, the priority is given to the renewable clean energy, and new renewable energy technologies such as sewage source heat pump, air source heat pump, river water source heat pump, ground source heat pump and medium and deep geothermal energy are selected according to local conditions to continuously expand the proportion of renewable clean energy. (Source: “China Securities Journal”)