Looking ahead to the 5-volt industry, we expect that the overall demand and output of components will increase month on month: the price of silicon materials and components will remain at the current high level by the third quarter, and the market of components and China’s ground power station will continue to be in a game state in May. However, thanks to the rapid growth of China’s distributed and overseas European markets, the demand for high price components is still good. With the continuous promotion of resumption of work and production after the epidemic in the Yangtze River Delta, the output of components will increase month on month in May.
Summary of the situation in April: under the shadow of the epidemic, the logistics, raw material supply and construction in the industry are facing certain challenges. Affected by the market and sentiment, the sector market showed a downward trend as a whole. In terms of supply, the incremental output of 3400 tons of silicon material was slightly lower than expected, the logistics efficiency was reduced, and the price of silicon material increased by more than 2% month on month. Under the cost pressure, silicon wafer batteries have increased one after another. Leading enterprises have raised product prices twice, both exceeding the increase of silicon materials. It is expected that the prices of follow-up and other raw materials will continue to rise or remain high. In terms of demand, with the average bid winning price of centralized components rising to 1.89 yuan / W, the willingness to install centralized power stations continued to weaken; Distributed is also affected by epidemic prevention and control. Some projects have been delayed and the bidding scale has decreased slightly.
Looking forward to the follow-up supply links, China’s silicon material output in the second quarter was about 185000 tons, an increase of 16% month on month. The incremental output of silicon material in the second quarter is mainly from the production of silicon dioxide and new special technical transformation projects. We expect that China’s silicon material output in May will be about 62000 tons, which can reach 65000 tons in an optimistic situation in June. The silicon material output in the second quarter will be about 185000 tons, an increase of about 26000 tons compared with the first quarter, supporting the incremental output of about 9gw of silicon wafers. The increase in the third quarter mainly comes from the ramp up of Baotou 50000 ton project of Tongwei, which is expected to increase by about 5 Jointo Energy Investment Co.Ltd.Hebei(000600) 0 tons, and China’s output is about 190000 tons. On the whole, the output of silicon material is still relatively limited. Therefore, under the trend that the overall silicon wafer capacity is greater than the silicon material capacity and the continuous launch of new silicon wafer capacity, the silicon material supply is still tight in the third quarter, and we expect the price to remain at a high level of more than 220000 yuan / ton.
In terms of demand and production scheduling, we believe that the demand and production scheduling of components will maintain growth in May: 1) the game atmosphere of China’s centralized market intensifies and the installation progress slows down. 2) Distributed: in the first quarter, the industrial and commercial industry added 6.3gw of installed capacity, accounting for more than 70% of the distributed, an increase of 45pp compared with 2021. At present, the logistics in the Yangtze River Delta has been significantly improved, the resumption of work and production continues to be promoted, and the distributed industrial and commercial market is expected to recover in May; The first three quarters may still be dominated by Distributed installation. 3) Overseas, Europe, which accounts for half of the exports and is also the high-end market of components, has entered the peak season of goods preparation. In May, the export amount of battery components to Europe is expected to increase by more than 30% month on month. Other markets, such as Japan and South Africa, are expected to continue to make up for the shrinking demand in other markets, such as Japan and South Africa. Provide strong support for the demand and production scheduling of relatively high priced components.
Investment suggestion: we insist that the change of downstream demand this year will affect the price of silicon material and form a positive correlation. The output of silicon material ensures the installed capacity of more than 200GW this year, bringing a growth rate of more than 30%. Continue to recommend the silicon material link Tongwei Co.Ltd(600438) , silicon wafer link Tianjin Zhonghuan Semiconductor Co.Ltd(002129) , Longi Green Energy Technology Co.Ltd(601012) ; Profitable repair of upward battery link Shanghai Aiko Solar Energy Co.Ltd(600732) ; Component links Trina Solar Co.Ltd(688599) , Ja Solar Technology Co.Ltd(002459) , Risen Energy Co.Ltd(300118) , auxiliary material links Qingdao Gaoce Technology Co.Ltd(688556) , Kbc Corporation Ltd(688598) , Jiangyin Haida Rubber And Plastic Co.Ltd(300320) , Shanghai Hiuv New Materials Co.Ltd(688680) , etc.
Risk warning: the production progress of silicon material is less than expected; The risk that the global PV installation is less than expected; Control the risk of escalation due to repeated outbreaks; Risks of policy changes.
