Key investment points
Looking ahead to the 3-volt industry, we expect that the overall demand for components and production scheduling will be stable, the first-line manufacturers will continue to maintain the operating rate close to full production, the new capacity of silicon materials will gradually reach production, the supply will increase, and the price is expected to loosen, further stimulating the downstream demand. Mainly based on: 1) supply side: the new capacity of silicon material 21q4 is climbing steadily, which can contribute about 2700 tons of incremental output in March. 2) Demand side: the demand of distributed and overseas markets remains stable, and the demand and production scheduling of components are expected to maintain the level of February. 3) The new supply of silicon material may reduce the price of silicon material and further stimulate the downstream demand.
Overview of January and February: from January to February 2022, the demand for components in domestic and foreign markets was strong, the production scheduling continued to improve month on month, the supply of silicon material was still limited, and the prices of all links of the industrial chain gradually rose. Since 2022, the scale of replenishment of some ground power station projects and bid opening of components of central state-owned enterprises in China has exceeded 38gw; The overseas Indian market entered the BCD countdown of basic tariff, with obvious rush loading effect and concentrated release of component demand, which led to the increase of operating rate in all links of the industrial chain. The operating rate of battery / component enterprises of top5 component enterprises in January increased by about 10pp month on month. On the other hand, the new production capacity of 21q4.16 million tons of silicon material is slightly lower than expected. The incremental output at the beginning of the year is limited, the shortage of silicon material supply has not been improved, the price continues to rise slightly and transmitted to the downstream, and the average price of component bid opening has also been raised to about 1.87 yuan / W.
Looking forward to the follow-up supply links, the new silicon material production capacity continued to be put into operation in March, and the total supply in April is expected to increase by 8% month on month, and the silicon material supply will be gradually abundant. In March, the new capacity continued to climb and contribute to the increment. According to the prediction of the silicon industry branch, China’s total supply may reach 63000 tons (China’s 5.5 + import 0.8), an increase of 2700 tons month on month, supporting the output of about 22gw at the silicon wafer end. We expect that 13000 tons will be added in 21q4 from April, and the monthly production capacity will be fully put into operation. The total supply is expected to increase to 68000 tons, an increase of 8% month on month, corresponding to the output of 24-25gw at the silicon wafer end.
On the demand side, we believe that the component demand and production scheduling in March basically maintain the level of February: 1) in the short term, the rush loading effect in India will gradually fade after mid March. 2) The demand for replenishment of surface power stations in China has gradually declined in the past 21 years. 3) The component link transmits the rising cost of battery to the terminal. After the price rises, a new round of price game will be opened with high probability. 4) The positive impact of distributed and other overseas markets on demand.
In terms of both supply and demand, we believe that in March, under the continuous release of silicon incremental output and the overall stability of demand, the price is expected to loosen. Under the influence of volume increase and price decrease, it is expected to drive the growth of downstream installed demand. At present, all links of the industrial chain maintain normal inventory, the component production scheduling is flat month on month, and feed back to the upstream after the industrial chain price game is opened. The silicon material price is expected to loosen after mid March. On the other hand, with the loosening of silicon material price and the launch of China’s ground power station project, the terminal demand will also recover. Under the high price of natural gas and oil, the overseas installed demand will maintain a steady or growth, and the overall upstream and downstream demand will still maintain a good growth trend.
Investment suggestion: we insist that the change of downstream demand this year will affect the price of silicon material and form a positive correlation. The output of silicon material ensures the installed capacity of more than 200GW this year, bringing a growth rate of more than 30%. Recommended recommended silicon links Tongwei Co.Ltd(600438) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ etc.
Risk warning: the risk that the silicon material production progress is less than expected; Risks of policy changes.
