Investment view: the fundamentals remain unchanged, and the downward valuation will bring greater allocation space
This week, the photovoltaic sector experienced a large pullback, and there were all kinds of negative speculation on the policy side in the market. We believe that the assessment of double carbon in the future will not be as radical as in the past, but there is a high probability that the assessment of energy consumption will not be cancelled, and the way of simultaneous development of thermal power and new energy will not be adopted. In the future, more consideration will be given to the bearing capacity of thermal power peak shaving and power grid, so as to develop new energy in a more balanced way. We have full confidence in the country’s determination to vigorously develop new energy. At present, from the fundamental point of view, in fact, the whole plate is getting better on the margin. Factors such as silicon wafer price reduction, the gradual end of de inventory and stock demand will further promote the downstream price reduction, so as to stimulate the demand for installed capacity.
We believe that under the condition of unchanged fundamentals, the downward valuation will bring greater allocation space and give the power equipment industry an “overweight” rating. It is suggested to lay out the following main lines: 1) the integrated leader is expected to usher in profit restoration: Longi Green Energy Technology Co.Ltd(601012) , Ja Solar Technology Co.Ltd(002459) , Trina Solar Co.Ltd(688599) ; 2) Auxiliary material links with high certainty: inverter Sungrow Power Supply Co.Ltd(300274) , Ginlong Technologies Co.Ltd(300763) , Jiangsu Goodwe Power Supply Technology Co.Ltd(688390) , etc; Photovoltaic glass faucet Flat Glass Group Co.Ltd(601865) , Xinyi solar energy, etc; Bracket faucet Arctech Solar Holding Co.Ltd(688408) ; Diamond wire Yangling Metron New Material Co.Ltd(300861) , Henan Hengxing Science & Technology Co.Ltd(002132) ; Glue film and upstream taps Hangzhou First Applied Material Co.Ltd(603806) , Shanghai Hiuv New Materials Co.Ltd(688680) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Levima Advanced Materials Corporation(003022) , Shanghai Tianyang Hotmelt Adhesives Co.Ltd(603330) etc; 3) Battery cell links for profit improvement: Shanghai Aiko Solar Energy Co.Ltd(600732) etc; 4) Other subdivision faucets Poco Holding Co.Ltd(300811) , Jade Bird Fire Co.Ltd(002960) , Anhui Xinbo Aluminum Co.Ltd(003038) , Ningbo Deye Technology Co.Ltd(605117) , Hangzhou Sunrise Technology Co.Ltd(300360) , Hainan Jinpan Smart Technology Co.Ltd(688676) , Zhenjiang Dongfang Electric Heating Technology Co.Ltd(300217) , etc.
Industry trends: Dongfang hope 60000 ton polysilicon project has been approved by environmental protection, and Anhui Jingke 8gwtopcon battery chip production line has been completed
Industry policies: 1) the five ministries and commissions have issued the action plan for innovation and development of intelligent photovoltaic industry, which aims to significantly improve the intelligent level of photovoltaic industry and make breakthroughs in industrial technology innovation by 2025, while emphasizing that the mass production conversion efficiency of new high-efficiency Cecep Solar Energy Co.Ltd(000591) cells will be significantly improved; 2) The three ministries and commissions issued a notice to support the construction of rural photovoltaic wind power and give priority to the planning of large bases and distributed projects; 3) Shandong Provincial Energy Bureau issued a document that by the end of the 14th five year plan, the large-scale development capacity of distributed photovoltaic in the whole county (city and district) of Shandong Province will reach more than 20 million KW; 4) Hebei “double carbon” Implementation Opinions: build a million kilowatt photovoltaic base and vigorously develop distributed photovoltaic power generation.
Company dynamics: 1) 2gw County wide PV centralized construction of Jiangsu company of national energy group; 2) Dongfang hopes that the 60000 ton polysilicon project of new energy will be approved by environmental protection; 3) Yangling Metron New Material Co.Ltd(300861) invested 14.4 million yuan to establish a holding subsidiary to extend to the raw material end; 4) Anhui Jingke 8gwtopcon battery chip production line is fully connected; 5) Xinjiang Daqo New Energy Co.Ltd(688303) increase capital by 10 billion to accelerate the polysilicon project; 6) Publicity of the first batch of 2gw large-scale scenery base projects in Shanxi, led by Huaneng, state power investment and the Three Gorges; 7) Freewon China Co.Ltd(688678) it is planned to invest 500 million yuan to build diamond wire bus and photovoltaic wire mesh project in Nantong; 8) Zhejiang Rongsheng Environmental Protection Paper Joint Stock Co.Ltd(603165) announced that it plans to invest about 10.5 billion to build new projects, including photovoltaic product R & D and power station operation, and officially enter the photovoltaic industry; 9) Tongwei Co.Ltd(600438) the net profit in 2021 is expected to exceed 8 billion yuan; 10) The IPO registration of Han’s CNC gem, a holding subsidiary of Han’S Laser Technology Industry Group Co.Ltd(002008) , was approved by the CSRC.
Industrial chain tracking: the decline of silicon material price continued to narrow, and the price of silicon wafer rebounded slightly
Silicon material: the price range of single crystal re feeding this week was 220000-240000 yuan / ton, and the average transaction price fell to 231800 yuan / ton, down 0.30% month on month; The price range of single crystal compact was 218000-238000 yuan / ton, and the average transaction price fell to 229100 yuan / ton, down 0.65% month on month. The price decline narrowed significantly. The operating rate of silicon wafer enterprises has increased, and the downstream prices have risen steadily. Superimposed on the stock market before the Spring Festival, it is expected that the price of silicon material will stop falling and stabilize in January. Silicon wafer: the average transaction price of 166mm monocrystalline silicon wafer this week was 4.95 yuan / piece, the same as last week; The average transaction price of 182mm monocrystalline silicon wafer was 5.8 yuan / wafer, up 1.8% month on month; The average transaction price of 210mm monocrystalline silicon wafer was 7.7 yuan / wafer, down 3.8% month on month. Prices rebounded slightly. It is expected that with the gradual increase of silicon wafer supply, the price of monocrystalline silicon wafer will return to a relatively stable level. Batteries: the average transaction prices of 166mm and 182mm batteries this week were 1.05 yuan / W and 1.08 yuan / W respectively, the same as last week; The average transaction price of 210mm battery was 1.035, down 1.4% month on month. Prices remained stable. In January, the operating rate of battery chips was raised to 60-70%. The increased demand at the battery end led to a slight rebound in the price of upstream silicon chips. However, considering that the price of downstream components is still high, the possibility of price rise at the battery end years ago is not high. Components: the average transaction prices of 166mm, 182mm and 210mm components this week were 1.85 yuan / W, 1.88 yuan / W and 1.88 yuan / W respectively, the same as last week. Prices remained stable. After the price of silicon material becomes more and more stable, the price of components is expected to stabilize temporarily.
We continue to maintain our previous judgment. After the price reduction of silicon materials and the destocking of silicon wafers, the industrial operating rate began to improve marginally, and the production scheduling increased significantly in January. The rush loading in December 2021 also provides a guarantee for the demand this year. It is expected that the off-season will not be light in the first quarter, and the follow-up will mainly focus on the production of silicon materials in the first quarter.
Market performance last week: the power equipment sector increased by – 8.31%, ranking 28th
Last week’s market review: the power equipment sector rose by – 8.31% (up 3.40% last week), ranking 28th (a total of 28 primary sub industries), compared with the Shanghai Composite Index by – 6.66 percentage points and the Shanghai and Shenzhen 300 index by – 5.93 percentage points.
Among the constituent stocks of the industry (Shenwan power equipment) last week, the top five weekly gainers were Chongqing Wanli New Energy Co.Ltd(600847) (+ 14.70%), Sunway Co.Ltd(603333) (+ 13.70%), Zhejiang Sunflower Great Health Limited Liability Company(300111) (+ 11.11%), Ningbo Sanxing Medical Electric Co.Ltd(601567) (+ 9.44%) and Harbin Air Conditioning Co.Ltd(600202) (+ 8.30%). The last five weekly gainers were Tongling shares (- 18.25%), Arctech Solar Holding Co.Ltd(688408) (- 19.96%) and Shanghai Hiuv New Materials Co.Ltd(688680) (- 20.76%) Yingkou Jinchen Machinery Co.Ltd(603396) (- 21.97%) and Shenzhen Hopewind Electric Co.Ltd(603063) (- 23.59%).
Risk tips
Risk of sharp price reduction of products, sharp rise in raw material prices, lower than expected downstream demand, increased industry competition, systemic risk of the market, failure of recommended companies to meet expectations, etc.
