In the last [ Ningbo Deye Technology Co.Ltd(605117) ] in-depth report, we explained that the company’s characteristics in many inverter enterprises are that it starts from grid connection and is stronger than energy storage. The industry and company have changed recently. We update the energy storage industry and Deye energy storage inverter business as follows:
Core point – at the industry level, there are more and more overseas direct distribution and storage areas (i.e. the increase of integrated optical storage projects) and the power section of the project is gradually expanded (from 5kW in the early stage to 10kW +). At the company level, compared with victron, an excellent inverter enterprise in the Netherlands, it plans to accelerate the promotion of 16kw single-phase optical storage hybrid inverter, and the business is expected to accelerate in the second half of the year.
Product change: the number of integrated optical storage projects has increased – unlike in the past, at least half of users in four markets will directly allocate storage
Reason 1: the economy of optical storage project is improved: Taking Germany as an example, it is expected to save 50% per kilowatt hour in 2025;
Reason 2: the integrated optical storage project can fully cope with the uncertainty of residual power grid access policy
Product changes: the power section of energy storage inverter is gradually expanded, Deye responds quickly, and introduces 16kw single-phase optical storage hybrid inverter
Product line expansion: jinlang – 5kW in 2019 → 10kW in 2020 Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) – 5kW in 2015 → 100kW industrial and commercial energy storage in 2021
Reasons for the expansion of power segment: the energy storage inverter meets the power requirements of the original grid connected inverter – the grid connection started earlier, and the power range is generally wider than that of energy storage; At present, there are still few energy storage application products for ground power station energy storage (> 200kW) and industrial and commercial energy storage (50-150kw) – energy storage economy is improved, customer base is expanded, and the power section of inverter needs to change accordingly.
New products of the company: the 16kw single-phase optical storage hybrid inverter proposed by the company has the function of grid connected inverter + energy storage inverter, which can carry out DC / AC coupling switching and has high selectivity
Competitiveness of enterprises: products (looking for different markets, 48V low voltage, short off grid switching time) + sales (benchmarking overseas explosion) + cost (imitating the traditional main business and integrating upward)
Product side: learn from the development experience of small household appliances and maintain the executive power of timely launching excellent new products to meet the needs of customers
Optical storage hybrid inverter has the advantages of DC coupling scheme, retains the tradition of intelligent AC coupling scheme, and the stock and incremental storage are distributed in parallel
Uniqueness (see different markets): adapt to 48V low-voltage application scenarios (general high-voltage in the same industry), use frequency droop control technology to realize parallel connection of inverters (16 and 6 in the same industry), and the off grid switching time is 4ms (more than 10ms in the same industry)
Sales side: the sales strategy of benchmarking overseas popular models and winning by cost performance
Compared with victron, the power density of the company’s 8kw products is 15% higher, and the number of parallel units can reach 2.8 times of the latter (the company has 16 parallel units and victron has only 6 units), and the selling price of 8kw is 46% lower (Deye 0.25 $/ W, victron 0.46 $/ W). It is expected that the new products will continue to be cost-effective and seize the market.
Cost side: strong cost control ability with many years of home appliance manufacturing experience
The company’s early business includes sheet metal and circuit board production, which can integrate upward self-made sheet metal parts, self-processing circuit boards and other materials
The heat dissipation design and MPPT control technology of heat exchanger, frequency conversion control chip and inverter are common, which can learn from previous experience to achieve better cost reduction.
Investment suggestion: with the high growth of energy storage market, the rapid growth of photovoltaic installed capacity and the steady growth of traditional business and small household appliance business, continue to be optimistic about the long-term development of the company and maintain the “buy” rating.
Risk tips: the installed capacity of the industry is less than expected, the risk of epidemic prevention and control, the business expansion of inverter is less than expected, and the development risk of OEM mode
