In the state of "demand curve pricing", the price of industrial chain is the most intuitive index to reflect the prosperity of the industry.
The price of Q1 silicon material rebounded to around 250 yuan / kg, and the orders were quickly signed in April. Silicon wafers frequently rose to new highs, and the prices of glass and adhesive films increased continuously, verifying the high outlook of the industry.
Recently, component prices have also increased slightly, and the game balance of the industrial chain is inclined to the direction of "terminal acceptance of price increase".
Silicon material (short board): the new contribution of Q2 mainly comes from the full production of 50000 tons in Tongwei Yunnan, 30000 tons in Asian silicon industry and the technological transformation and upgrading of new and special energy. The output is expected to increase by about 10% month on month.
EVA particles: the progress of Zhejiang Petrochemical photovoltaic materials in Q1 exceeded expectations, and the new contribution in Q2 mainly came from the technical transformation and upgrading of Lianhong and 300000 tons of Lotte, with a tight balance between supply and demand throughout the year.
Photovoltaic glass: the expansion of Q1 industry is lower than expected. In early April, a new player (Qibin 1200t / D) ignited, and the output of Q2 is expected to increase by 8% month on month; The hearing system is conducive to the healthy relationship between supply and demand and the improvement of the leading share.
Other links, such as IGBT and quartz crucible, are not "rigid bottlenecks" due to their similar properties to EVA and industrial silicon, although supply and demand are tight.
Silicon material: the global effective supply of 2022q1-q4 is expected to be 180000 tons, 200000 tons, 220000 tons and 250000 tons respectively, about 850000 tons in the whole year. The supply increment of q2-q3 is less than previously expected, and Q4 is relatively released.
Photovoltaic glass: the capacity growth of Q1 was slower than expected, and the supply release was accelerated in the second half of the year. However, there is still great uncertainty about the ignition time of new kilns except the faucet, and the overall excess degree of silicon material is better than previously expected.
Since the beginning of the year, the production scheduling of all links of the industrial chain has basically maintained a high level, the profit of silicon material is strong, the silicon wafer / battery chip is significantly improved compared with Q4, and the gross profit of integrated components is stable.
Looking forward to the change trend of Q2 Profit Margin: the silicon material remains stable at a high level, the silicon wafer remains stable or decreases slightly, there are opportunities for continued repair of battery chips, and the profit of integrated components remains stable.
Q1 China's household distributed demand continues to be high. With the stricter requirements on electricity price and energy consumption, the industrial and commercial distributed demand represented by various industrial parks also shows a high growth trend; From January to February 2022, China added 10.86gw of installed capacity, exceeding the total of January to may 2021.
From the perspective of centralized demand, since the end of 2021, the scale of public bidding for components of China's central state-owned enterprises has exceeded 56gw, and the component price will start one after another when it returns to a reasonable range (around 1.85 yuan / W). If the subsequent subsidy settlement can be realized gradually, it may further promote the cost bearing capacity of China's centralized projects.
The conflict between Russia and Ukraine demands to improve energy independence. Under the goal of "breaking away from Russia", a variety of means will be taken in the short term, but the construction of new energy in the short, medium and long term must be strengthened.
Germany plans to increase the proportion of renewable energy power generation to 80% in 2030 (65% of the previous target and 40% of the current level). It is expected that the installed capacity of photovoltaic / wind power will reach 215gw and 145gw respectively in 2030. In addition to Germany and the European Union, Spain, Portugal, the United Kingdom, France and other countries have also successively introduced relevant policies to support the construction of renewable energy power generation capacity to improve energy independence.
Reflected in the industrial chain, the prices of photovoltaic modules and energy storage systems at the distributed demand end in Europe have increased smoothly, and the price of PPA at the centralized project end has maintained an upward trend, with the impact lagging behind.
Conclusions of a questionnaire survey conducted by the American Photovoltaic Industry Association: 1) module supply: more than three-quarters of enterprises said they had received the notice of postponement or cancellation of module supply (the remaining one-quarter may only be due to the terminal small installers who purchase modules through dealers); 2) More than 90% of enterprises in all links / fields of the industrial chain believe that their business will be "seriously or even devastating". Interestingly, 80% of local manufacturers participating in the survey also think so; 3) More than two-thirds of enterprises said that 70% of their jobs would be at risk, and one-third thought the impact was 100%. SEIA mobilized industrial chain forces to actively put pressure on the government.
The possible ideal results mainly include: 1) direct termination of the investigation (low possibility); 2) Quickly obtain the investigation conclusion of "avoidance behavior is not tenable" in a short time and terminate the investigation; 3) The investigation continues (it takes up to 150 days to get the preliminary determination conclusion), but it is clear that there will be no retroactive tax on the trade during the investigation period (if any in the future).
At the current time, the core logic of the sector: the high prosperity of the industry is clear, and the "release rhythm of short supply board (silicon material), marginal demand intensity and component production scheduling expectation" maintain a dynamic balance. No matter how the game is played, three core logics remain unchanged this year and are fulfilled with a high probability (part of which is also where the current market expectation is poor):
1) component output / terminal installed capacity increased quarter by quarter / month by month with the release of silicon production (the inflection point of improvement of the impact of the epidemic on logistics has appeared);
2) the price of silicon material is expected to rise, driving more radical slicing and supporting more component output and installed capacity. The annual installed capacity is determined to increase by 45% - 50%, and will continue to maintain a relatively high growth rate in 2023;
3) when there is a bottleneck in supply, the demand exceeding expectations is reflected in the upward movement of the price center and the expansion of the total profit sector of the industrial chain, and the bottleneck links eat up most of the expansion.
Core four main lines:
1) silicon material / battery with deterministic / flexible performance: Tongwei Co.Ltd(600438) , Daquan new energy, poly GCL energy (H), etc
2) auxiliary materials (glass) and inverters that follow the volume and improve the pattern and profitability: Xinyi solar energy, Flat Glass Group Co.Ltd(601865) (A / h), Shandong Jinjing Science And Technology Stock Co.Ltd(600586) , Sungrow Power Supply Co.Ltd(300274) , Hangzhou First Applied Material Co.Ltd(603806) , etc;
3) new battery technology (leading component manufacturer and leading equipment supplier): Longi Green Energy Technology Co.Ltd(601012) , Jingke energy, Ja Solar Technology Co.Ltd(002459) , Trina Solar Co.Ltd(688599) , Wuxi Autowell Technology Co.Ltd(688516) , Suzhou Maxwell Technologies Co.Ltd(300751) , etc;
4) high dividend operators: Xinyi energy (H), etc.
Risk tips
Risk of deterioration of international trade environment: as the proportion of photovoltaic in the energy structure of various countries continues to increase, China, as a dominant player in the photovoltaic manufacturing industry, may still face more stringent trade barriers in other countries (although such barriers may lead to an increase in the cost of using clean energy in the country).
The epidemic repeatedly caused the risk that the global economic recovery was lower than expected: the negative impact of the epidemic on power demand and its growth rate exceeded expectations, resulting in that even though the cost of photovoltaic has decreased significantly and become the cheapest power supply, the installed power is still insufficient to support the sustained and rapid growth of demand.
Risk of irrational expansion of industry capacity: under the background of clear dual carbon objectives, the capacity expansion of photovoltaic industry has accelerated significantly, and there are signs of large-scale entry of cross-border capital again, which may lead to the risk of phased competition pattern and deterioration of profitability in some links.
The decline of energy storage cost is less than expected: configuring energy storage is the only way for photovoltaic to achieve high proportion penetration in the future power structure. If the decline rate of energy storage cost is less than expected or the safety of battery energy storage is not recognized, it may limit the penetration rate of photovoltaic in the energy structure in the medium term.
