1. Resumption: where do the investment opportunities in photovoltaic manufacturing come from?
Industry & share price resumption:
From 2017 to 2020, industry deflation – new technology drives the increase of permeability + steep cost curve and excess return; Among them, Longji (single crystal instead of polycrystalline), Tongwei (perc battery) and Xinyi light energy / Flat Glass Group Co.Ltd(601865) (double glass permeability improvement) benefit from the technical changes of single crystal instead of polycrystalline, single crystal perc instead of BSF, double-sided battery instead of single-sided battery and double glass permeability improvement respectively, while Sungrow Power Supply Co.Ltd(300274) mainly benefits from the double increase in volume and profit brought by export substitution after 2020.
In 2021, industry inflation, integration, inverter and thermal field increased the most, benefiting from expected profit restoration, new application scenarios and large-scale accelerated penetration respectively.
To sum up, looking forward to 2022, investment opportunities for photovoltaic manufacturing: varieties with reversed bottom of profits or expected to show performance flexibility – tracking support, photovoltaic glass and integrated components; Links of new technology change, new market development and new scene extension – type n (integrated components, thermal field, etc.), overseas market (inverter, tracking support, etc.), energy storage (inverter) & BIPV (integrated components, etc.); Links with mature technology and stable pattern – adhesive film, frame, tracking support (with brand), component (with brand), inverter (with brand), thermal field, glass, etc.
2. Outlook: what are the most promising directions in 22 years?
Targets that are optimistic about performance or have upward elasticity in Valuation: (1) performance elasticity 1: tracking support with double rise of volume and profit, photovoltaic glass and integrated components. (2) Performance elasticity 2: glue film and frame with stable volume increase. (3) Valuation elasticity: carbon thermal field related to new technology and energy storage inverter & BIPV for scenario expansion.
Double increase in volume and profit:
Tracking support: in terms of quantity, with the price reduction of silicon material, the installed capacity proportion of ground power stations increases, and the economy of tracking support improves, driving its penetration in China; At the profit level, with the price reduction of bulk commodities, tracking support enterprises can return to the normal profit level.
Recommended target: Arctech Solar Holding Co.Ltd(688408) : the volume increase comes from China’s local advantages + first mover in emerging markets + developing the U.S. market. The profit increase comes from link profit repair + cost reduction of self built galvanizing capacity. It has a brand attribute for a long time.
Glass: low profit in 21h2 industry + long hearing process, and the expansion of second and third tier production may be less than expected, resulting in phased shortage of wide glass and recovery of link profits; At the same time, the permeability of double glass was increased to link growth α。
Recommended targets: ① Flat Glass Group Co.Ltd(601865) (jointly covered with the building materials group): the profit of 21q3 bottomed out, the expansion of second and third tier production was less than expected or, and the subsequent profit will rise; At the same time, the production was greatly expanded, the market share remained high, and the volume and profit increased. ② Xinyi solar energy (jointly covered with the building materials group): the leading cost advantage is strong. With the expansion of production capacity, it will maintain a dominant position and obtain growth beyond the industry in the future.
Integrated components: in terms of quantity, the first four component leaders can not only divide the incremental market, but also further erode the share of small factories in stock; In terms of profit, with the price reduction of silicon material, the downstream yield can naturally return to 6%, so as to restore all links of the industrial chain to the normal profit level. It is expected that the profit of leading integrated enterprises can be increased to 0.16 yuan / W.
Recommended target: Longi Green Energy Technology Co.Ltd(601012) : silicon wafer impact. Even if the profit of silicon wafer is significantly reduced to 7 points / W, the profit of silicon wafer + components can reach 13 billion; Performance flexibility, cost reduction in each link + 1 gross premium for n-type components, and performance may exceed expectations; The valuation is flexible. The new businesses of BIPV (trillion market, 22-year profit accounting for 4%, 23-24-year CAGR 50% +) and hydrogen production equipment (22-year profit accounting for 4%, 23-25-year CAGR 80%) are developing rapidly, which is expected to become a new growth pole of the company. Ja Solar Technology Co.Ltd(002459) : integrated profit or repair to 0.1 yuan / W +, equity financing ratio ↑, financial expense rate ↓, and profit continues to improve.
Volume rise, profit and stability:
Adhesive film: recommended subject: ① Hangzhou First Applied Material Co.Ltd(603806) : excellent cost control, opening up the second growth curve of photosensitive dry film. ② Shanghai Hiuv New Materials Co.Ltd(688680) : after listing, expand production + supplement flow, which is expected to rapidly increase the market share.
Frame: Anhui Xinbo Aluminum Co.Ltd(003038) : the industry has extremely high requirements for working capital (similar to adhesive film). The company is listed and financed to expand production, improve the market share & replenishment, and benefit from the profit restoration brought by bulk price reduction.
New scene & New Technology:
BIPV: Longji, Jingao, Arctech Solar Holding Co.Ltd(688408) and other enterprises with good layout in this application scenario are recommended.
Energy storage: inverter: at present, there are differences in the main market and application scenarios of energy storage products of various enterprises (for example, the big head of sunshine is in large power stations, Deye is stored at home, Shenghong is in industry and commerce, and Tuobang is in portable energy storage, with less direct competition), and the growth rate is fast; Focus on Sungrow Power Supply Co.Ltd(300274) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , Ningbo Deye Technology Co.Ltd(605117) , and be optimistic about the high growth of the second growth curve energy storage business of each company; It is suggested to pay attention to Hemai shares: with the improvement of national security requirements & the reduction of product costs, the micro reverse market continues to penetrate the distributed market, and is optimistic about the substitution of China’s Micro reverse leader for overseas leader enphase.
Type N: thermal field (Jinbo): large-scale accelerated penetration in the short term, with high demand in the industry; Medium term price & gross profit goes down, and the price is supplemented by volume; Long term development to semiconductor, braking materials, hydrogen energy and other businesses.
3. Energy storage sector: how to select investment targets?
Investment suggestion: individual stocks with high proportion of packaged energy storage and relatively large performance elasticity can be obtained β profit.
1) Downstream applications are wide and complex, making the probability of short-term pattern deterioration small. 2) In horizontal comparison, the product barrier is relatively low, so that the short-term reserves of truly competitive enterprises may not be high (good companies may not have high elasticity of energy storage). 3) Based on the above two points, we believe that the investment opportunities for energy storage come from the industry β， That is, it comes from performance elasticity (high proportion of energy storage revenue, high proportion of overseas sales and high proportion of C-end product sales), which relatively weakens the barriers and pattern of competition, and there is no way and need to take heavy positions in individual stocks α Package buying is the best choice.
Risk tip: the downstream demand is less than expected, and the policy implementation is less than expected. The calculation is subjective and for reference only.
