Key investment points
In 2022, the demand is easy to exceed the expectation, and the accelerated production capacity is worthy of attention
The background of global carbon neutrality contains great potential demand. This year, China’s policies of promoting the whole county and large bases have been launched one after another. We expect that the annual household installed capacity will exceed 20GW, and the potential installed capacity that can be contributed by the distributed distribution of the whole county in the future will be 30-50gw. Capacity bottleneck, supply determines demand, and it is difficult to become the norm in the medium and long term. Over the past two years, the period of supply affecting demand and determining the upper limit of demand may continue, but the probability of medium and long-term becoming an important factor restricting the development of the industry will be greatly reduced. Photovoltaic will eventually return to the track of cost reduction and economic improvement, so as to drive demand growth. The capacity of silicon material continues to be released, the silicon consumption is reduced, and the inventory willingness of the industrial chain is reduced. It is expected to support more than 260gw in 2022. The output of EVA photovoltaic materials of newly put into operation units may be better than expected. The installed capacity of PV supplied by EVA particles is expected to exceed 210gw in 2022. With the supply of Poe, the overall installed capacity supported by adhesive film raw materials is expected to reach 260gw. To sum up, the installed capacity of PV is expected to be 230gw in 2022. If the price of the industrial chain drops more than expected and the economy is further improved, the installed capacity can reach 260gw.
Under the background of carbon neutralization, the probability of capacity landing increases, and the excess of some links will become the norm. As the medium and long-term growth of industry demand is relatively certain, as long as the expected project profit can be close to or converge with the current participants, new entrants or companies expanding production will have the power to expand production. They are less affected by short-term prosperity and profit fluctuations, and are more based on long-term planning based on capacity matching. The medium and long-term pattern of each link depends more on the entry barriers caused by products or costs.
Give priority to the pattern and pay attention to the profit restoration link
Glass and diamond thread faucets have long-term significant cost advantages. Glass: the increase in the proportion of double glass drives the demand growth higher than that of the industry, and the process and layout build long-term barriers. Vajra line: the demand growth driven by thin line is higher than that of the industry, and the extension of process and industrial chain constructs long-term barriers.
Inverter soft magnetic powder core and high-purity quartz sand have obvious product differentiation. Inverter soft magnetic particle core: benefiting from material substitution, the growth rate is faster than that of the industry, and there are large differences in products. High purity quartz sand: there are technical barriers to products, and qualified suppliers are limited.
Focus on profitable repair links such as integrated components, batteries, adhesive films and supports. Components and batteries: with the decline of silicon material price in 2022, the profits of batteries and components will be repaired to a certain extent, and if the demand exceeds the expectation, the profit elasticity is large. However, the futures attribute of components may be weakened in the future. The substantial expansion of batteries and components also has an impact on the steady-state unit profit of the industry. Batteries also need to pay attention to the layout of new technologies. Adhesive film: after the tension of EVA particles is relieved, we expect the gross profit margin of the adhesive film industry to be repaired, but the steady-state profit after repair depends on the leader’s outlook for the pattern and the expansion of the industrial chain. Tracking support: in 2022, various adverse external factors of tracking support will be improved, and the opportunity of bottom reversal is worthy of attention.
Pay attention to the implementation of new technologies represented by n-type and granular silicon
TOPCON is compatible with the original production line. At present, the landing progress is fast. It is estimated that TOPCON battery is expected to land more than 50gw in 2022. The landing of n-type components will create some subdivision opportunities for industrial chain equipment and materials. For example, the silicon wafer link has higher requirements for quartz crucibles and can be compatible with thinner silicon wafers; The battery industry needs to be reformed; Higher precision series welding machine is required for component links; Auxiliary materials have higher requirements for rubber film.
Granular silicon: the downstream silicon wafer manufacturers will increase the doping proportion after gradually solving the problems such as hydrogen jump and impurities. Poly GCL has signed a number of supply contracts for granular silicon with the downstream, and the production expansion has been gradually implemented. Because of its advantages in power consumption, it is worth focusing on tracking in the future.
Industry rating and investment strategy
We believe that in the case of downward prices in the industrial chain, the demand for photovoltaic in 2022 is easy to exceed expectations, and has high growth potential in the medium and long term. We give the power equipment industry an “overweight” rating. However, the substantial expansion of production in the industry may cause a normalized surplus in most links, and the pattern is affected to a certain extent. We suggest giving priority to the pattern of subdivided links and the implementation of new technologies. 1. Glass and diamond wire have significant cost advantages, focusing on Flat Glass Group Co.Ltd(601865) (A / h), Xinyi light energy, Yangling Metron New Material Co.Ltd(300861) , Henan Hengxing Science & Technology Co.Ltd(002132) . 2. Inverter soft magnetic particle core and high-purity quartz sand have significant product differences. Pay attention to Poco Holding Co.Ltd(300811) , Jiangsu Pacific Quartz Co.Ltd(603688) . 3. There are profitable repair opportunities for battery modules, adhesive films and tracking brackets. Pay attention to Longi Green Energy Technology Co.Ltd(601012) , Ja Solar Technology Co.Ltd(002459) , Trina Solar Co.Ltd(688599) , Hangzhou First Applied Material Co.Ltd(603806) , Shanghai Hiuv New Materials Co.Ltd(688680) , Arctech Solar Holding Co.Ltd(688408) , Shanghai Aiko Solar Energy Co.Ltd(600732) . 4. Pay attention to the technological change opportunities brought by new technologies such as n-type battery and granular silicon, poly GCL energy, etc.
Risk tips
Carbon neutralization and other policies are less than expected risks, industrial chain price changes are less than expected risks, competition intensifies risks, downstream demand is less than expected, recommended company performance does not meet expectations, etc.
