Event: (1) according to the statistics of Zhihui photovoltaic, the new grid connected installed capacity of photovoltaic in China will reach 60GW in 2021; (2) On December 30, 2021, SASAC issued the guiding opinions on promoting the high-quality development of central enterprises and doing a good job in carbon peak and carbon neutralization, proposing that the installed capacity of renewable energy power generation by central enterprises will account for more than 50% by 2025. (3) On December 31, 2021, the national development and Reform Commission said that about 75gw of the first batch of large-scale scenery base projects have been started, and the rest will be started in 2022q1.
2021q4 PV installed capacity exceeded expectations: by the end of November 2021, 34.83gw of new grid connected installed capacity had been added nationwide. According to Zhihui PV statistics, the grid connected capacity in December would exceed 25gw, including household PV above 4gw, distributed PV above 2gw and ground power stations above 18gw. Based on this calculation, the new grid connected installed capacity in 2021 would reach 60GW, Far exceeding the market and CPIA expectations (it is predicted in November 2021 that 45 ~ 55gw will be newly installed in 2021).
Policies continue to promote the improvement of photovoltaic demand: on December 30, 2021, SASAC issued the guiding opinions on promoting the high-quality development of central enterprises and doing a good job in carbon peak and carbon neutralization, proposing that the installed capacity of renewable energy power generation by central enterprises will account for more than 50% by 2025, which will enable Huaneng Group, Huadian Group National energy group and other power generation groups with a high proportion of thermal power accelerate the construction of new energy; On December 31, 2021, the national development and Reform Commission said that the national development and Reform Commission and the national energy administration took the lead in establishing a work promotion mechanism, implementing monthly scheduling, and guiding local energy authorities and relevant central enterprises to promote the construction of base projects in strict accordance with the requirements; About 75gw of the first batch of large-scale scenery base projects have been started, and the remaining projects (about 22gw) will be started in 2022q1. Photovoltaic demand will be effectively guaranteed in 2022.
Downward price of industrial chain: according to PV InfoLink data, after the price of silicon began to decline on November 24, 2021, the price of industrial chain declined as a whole. As of January 5, 2022, the price of silicon material has decreased by 14.5% compared with the price on November 24, 2021; In the silicon wafer segment, the price of 166 / 182 / 210 silicon wafers decreased by 5.7% / 8.1% / 12.1%; The price of 166 / 182 / 210 batteries dropped by 0.9% / 3.6% / 6.3%; In the component part, the price of 166 / 182 / 210 components decreased by 4.6% / 5.1% / 5.1%. In this context, the demand boom of 2022q1 overseas market is expected to be strong, and various factors such as the stock preparation of component enterprises promote the production scheduling of component enterprises in January 2022 to be significantly improved compared with December 2021. We judge that the installed capacity of distributed photovoltaic in overseas and China will take the lead.
Investment suggestions: (1) the demand for photovoltaic 2021q4 exceeds the expectation, and the policy continues to support the development of new energy. After the downward price of the industrial chain is superimposed, 2022q1 is “not light in the off-season”, the demand boom is expected to improve strongly, promote the large-scale volume of the industrial chain, and focus on recommending the leaders Longi Green Energy Technology Co.Ltd(601012) , Tongwei Co.Ltd(600438) with poor expectation in the market.
(2) the price of some auxiliary materials may rise in 2022q1 due to factors such as demand release, price rise of raw materials and structural supply and demand shortage. It is recommended to focus on Flat Glass Group Co.Ltd(601865) and pay attention to Luoyang Glass Company Limited(600876) .
(3) in the process of module price decline, overseas demand and distributed photovoltaic demand will be released first. It is recommended that the whole county promote distributed leading Jinko Power Technology Co.Ltd(601778) , Zhejiang Chint Electrics Co.Ltd(601877) .
Risk analysis: the downward rate of profitability caused by the price game in the industrial chain exceeded expectations; Developers have low acceptance of price increase, resulting in lower than expected photovoltaic installed capacity in the future.
