Affected by the tight supply of photovoltaic main and auxiliary materials and the sharp rise in costs in 2021, China’s photovoltaic terminal revenue is under pressure, resulting in a lower than expected installed capacity growth. It is estimated that the annual installed capacity will be about 50gw. At the end of the year, with the accelerated release of raw material production capacity in the upstream of the photovoltaic industry chain and the decline of product prices, the pressure on the photovoltaic supply chain is expected to be gradually relieved in 2022, benefiting the middle and downstream links. It is expected that China’s photovoltaic installed capacity will increase to about 75gw in 2022. As an important link in the middle and lower reaches, photovoltaic auxiliary materials benefit from the “double carbon” policy support on the one hand, and have stronger growth certainty than photovoltaic manufacturing industry on the other hand. In terms of investment suggestions, it is suggested to focus on the inverter industry in 2022, mainly benefiting from New + replacement, distributed driving series growth and opening of energy storage inverter space. Secondly, benefiting from the increased demand and proportion of double glass modules, the leading enterprises of photovoltaic glass and adhesive film have excellent profitability For individual stocks, it is recommended to pay attention to Flat Glass Group Co.Ltd(601865) , Hangzhou First Applied Material Co.Ltd(603806) , Sungrow Power Supply Co.Ltd(300274) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) .
Photovoltaic glass: the cost of raw materials such as soda ash and natural gas is relatively rigid. The double glass module opens the growth space of photovoltaic glass. Large size and ultra-thin realize cost reduction and efficiency increase, and accelerate the permeability of double glass module. According to the CPIA forecast, it is estimated that the average growth rate of photovoltaic glass demand during the 14th Five Year Plan period will be about 20%.
Photovoltaic adhesive film: multi layer coextrusion Poe adhesive film has both the super water resistance of Poe resin and the high yield and lamination efficiency of EVA. At the same time, it can reduce the cost and increase efficiency by reducing the use of Poe. According to CPIA data, the market share of multi-layer coextrusion Poe adhesive film is expected to reach about 21% by 2025. According to the forecast of Hangzhou First Applied Material Co.Ltd(603806) , by 2025, the newly installed demand of photovoltaic will be about 270-330gw, and the corresponding photovoltaic adhesive film market will be about 3.24-3.96 billion square meters.
There are three main positive directions in the inverter market: 1) the demand for “new + replacement” is accelerated. With high installed capacity and strong certainty, the replacement demand of superimposed photovoltaic power station will continue to grow during the operation cycle. 2) The share of series inverter increased. With the rapid advancement of the whole county project and the accelerated development of distributed photovoltaic projects, the demand for series inverters will increase greatly, and the proportion of series inverters in centralized photovoltaic power stations will also rise. Overall, according to CPIA data, the market share of series inverter in China will increase to 66% in 2020. 3) Energy storage inverter opens up new market space. According to IHS data, the market scale of energy storage inverter is expected to reach 17.4gw in 2022, with a year-on-year increase of about 19%.
Risk tips: the promotion of government policies does not meet expectations, the company’s performance does not meet expectations, vicious market competition, systemic risks in the secondary market outside China, the risk of epidemic deterioration beyond expectations outside China, and the economic recovery outside China is lower than expected.
