Event: on November 30, Longi Green Energy Technology Co.Ltd(601012) lowered the official quotation of monocrystalline silicon wafer. The price of 158.75/166/182mm silicon wafer decreased by 0.41/0.41/0.67 yuan / wafer, 7.4% / 7.2% / 9.8% respectively, and the thickness of silicon wafer increased from 170 μ M down to 165 μ m。
Pressure on the demand side causes Longji to reduce the quotation of silicon wafer.
Upstream after October 2021 The price of (silicon material and silicon wafer) has been further raised, and the high price of the industrial chain has made the global PV module installation weak. The superimposed module link is expected to have a strong demand for 2021q4 installation in the third quarter, thus accumulating a certain inventory. The two factors have put great pressure on the commencement recovery of the battery link. According to the statistical data of holly’s PV, the global battery operation rate has fallen to The lowest 43% in history, the weakness of the demand side has brought great shipping pressure to the upstream silicon wafer link.
The price reduction expectation of the industrial chain is getting stronger, and the downstream profit is expected to improve marginally, which will positively stimulate the installed capacity in 2022.
According to PV InfoLink data, the price of PV supply chain has loosened under the pressure of demand last week, and the prices of silicon wafers, cells and modules have decreased to a certain extent; After Longji reduces the silicon wafer quotation this time, on the one hand, the downstream demand pressure will be further transmitted to the silicon material link. On the other hand, with the relief of supply pressure after the release of silicon material capacity of Tongwei and poly GCL, we believe that the silicon material quotation in December is also expected to usher in a new wave of reduction.
After the price of silicon material and silicon wafer fell, (1) Terminal demand will continue to improve. With the introduction of positive policies to support photovoltaic development in Germany and the United States, we maintain our judgment that the global installed capacity of new PV will exceed 220gw in 2022; (2) the decline in upstream prices is conducive to the profitable repair of battery cells and modules and improve their operating rate; (3) The overall demand for silicon material is still relatively strong, the possibility of rapid and sharp price decline is low, and the slow price decline will not bring great pressure on the inventory of downstream links.
Investment suggestion: after the new round of price rise in the upstream in October, the downstream demand is under pressure and has been transmitted to the silicon wafer and silicon material link. After the silicon wafer price is loose, it is expected to further promote the decline of silicon material price. However, we believe that the rhythm of price reduction is expected to remain stable, so it will not bring great pressure on the inventory of integrated enterprises. After the upstream price drop, on the one hand, it will bring marginal improvement to the downstream links, on the other hand, it will also increase the expectation of new photovoltaic installed capacity in 2022, which will have an impact on all links.
(1) The profitability of integrated enterprises is expected to improve, and there is no need to worry too much about the inventory pressure of leading enterprises. Focus on Trina Solar Co.Ltd(688599) , Ja Solar Technology Co.Ltd(002459) , Longi Green Energy Technology Co.Ltd(601012) ; (2) inverters and auxiliary materials that benefit from the expected repair of “quantity” and do not participate in the price game of crystalline silicon industry chain
The festival will give priority to benefit, with emphasis on Sungrow Power Supply Co.Ltd(300274) , Hangzhou First Applied Material Co.Ltd(603806) , and it is recommended to pay attention to Arctech Solar Holding Co.Ltd(688408) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , Ningbo Deye Technology Co.Ltd(605117) , Shanghai Hiuv New Materials Co.Ltd(688680) , Flat Glass Group Co.Ltd(601865) , and Xinyi solar energy (H);
(3) After the price drop of the industrial chain, the cost pressure of downstream operators will be relieved, and the distributed photovoltaic projects are expected to be the first to increase the volume, with the opening of green power market-oriented transactions and further increase the support of financial institutions. We continue to be optimistic about the investment opportunities of new energy operators, focus on Jinko Power Technology Co.Ltd(601778) , China Three Gorges Renewables (Group) Co.Ltd(600905) , Jiangsu Linyang Energy Co.Ltd(601222) , Zhejiang Chint Electrics Co.Ltd(601877) , and suggest paying attention to Longyuan Power (H) , Guangdong electric power a, China National Nuclear Power Co.Ltd(601985) , Jiangsu New Energy Development Co.Ltd(603693) , Fujian Funeng Co.Ltd(600483) .
Risk analysis: the downward rate of profitability caused by the price game in the industrial chain exceeded expectations; Developers have low acceptance of price increase, resulting in lower than expected photovoltaic installed capacity in the future.
