Demand: carbon neutralization target and technology cost reduction drive long-term growth and high prosperity of the industry
Driven by the goal of carbon neutralization and technology cost reduction worldwide, photovoltaic ushered in long-term growth. The Chinese market has gradually established a carbon neutral “1 + n” policy system, and the large base and the whole county promote to jointly drive the growth of photovoltaic. In the overseas market, the price of PPA rises under the background of energy transformation, so as to further improve the economy of photovoltaic. With the superposition of deferred and new projects, 2022 is expected to be a big year for photovoltaic installation. It is estimated that in 2022, the world’s newly installed photovoltaic capacity will be 230gw, with a year-on-year increase of more than 40%.
A new round of technology cycle brewing, fully embrace the technology dividend
In history, the biggest return of photovoltaic investment comes from investment technology dividends, Poly GCL and Longi Green Energy Technology Co.Ltd(601012) are typical representatives (benefiting from cold hydrogenation and single crystal instead of polycrystalline respectively). We believe that a new round of technology cycle is brewing in the photovoltaic industry. Silicon material and granular silicon have initially seen the dawn; crystal pulling and CCZ are the new direction of cost reduction; slicing, large-size, thin-film and thin-line continue to make progress, and the third-party OEM mode is rising; battery chip is the highlight of the technological revolution, and the era of n-type battery is coming; reverse Converter, policy or continue to promote the rise of component level control inverter (mple); tracking support algorithm upgrade, and artificial intelligence is used in the control system.
Grasp the main line of industry prosperity and focus on the links that exceed the growth of the industry
(1) Profit restoration: in 2021, the prices of upstream raw materials such as silicon, EVA particles and steel increased significantly, which eroded the downstream profits. With the easing of the tension between supply and demand in 2022, it is expected that the profits of relevant links will be repaired, including components, adhesive film and tracking support. (2) Concentration improvement: there are still opportunities to improve the concentration of some non main industrial chain links and auxiliary materials, including inverter, rubber film and tracking support. (3) supply and demand gap: the upstream high-purity quartz sand may form a supply and demand gap.
The neglected downstream ushers in comprehensive opportunities
Photovoltaic downstream applications have been neglected for a long time, but we see that the downstream is ushering in new opportunities for all-round development. China’s household photovoltaic mode is mature, and the whole county project accelerates the development of the industry. Industrial and commercial photovoltaic fully benefits from the market-oriented reform of electricity price, and will usher in accelerated development in the future. In the era of parity, the subsidy problem of ground power station operators has been solved, the cash flow has been completely improved, and the long-term value of ground power stations is expected to be revalued with the increment brought by carbon trading.
Investment advice
We are optimistic about technological progress, industry main line and downstream application. For the new round of technology cycle, it is recommended to focus on the layout of granular silicon, CCZ, slice, n-type battery, mlpe, intelligent algorithm tracking support, etc. As the main line of the industry, it is recommended to pay attention to the links of profit repair, concentration improvement and supply-demand gap, and companies that pay attention to components, rubber film, tracking support, inverter, quartz crucible and other links. Fully optimistic about photovoltaic downstream applications, including household, industrial and commercial distributed and ground power station operators.
Risk statement
Policy progress is less than expected, new technology progress is less than expected, and industry competition is intensified.
