Key investment points
In March 2022, the hearing of moonlight volt calendered glass project officially kicked off. It has been announced that the production capacity of the hearing project exceeds 225000 T / D, and the development mode of industrial projects has changed significantly. We believe that the hearing and risk early warning mechanism will structurally and restrictively release high-quality and low-consumption production capacity, strong demand for superimposed components, multi-path cost reduction, and photovoltaic glass head enterprises with deep technology accumulation will continue to benefit.
The strong demand promotes the continuous rise of photovoltaic glass prices: the conflict between Russia and Ukraine overseas and high energy prices have prompted Europe to vigorously develop new energy to seek energy independence. China’s distributed photovoltaic and scenery large base projects continue to be in large quantities, and the demand at home and abroad continues to be strong. In 2022q1, the export of components was 37.2gw (a year-on-year increase of 112%), and the installed capacity in China was 13.2gw (a year-on-year increase of 148%). The high demand boom promoted the rapid decline of photovoltaic glass inventory, which decreased rapidly from 633100 tons at the end of 2021 to 3411000 tons at the end of April, a decrease of 46.12%. The price of photovoltaic glass has risen continuously in March, April and may, from 25.5 yuan / Ping to 28.5 yuan / Ping.
With the large-scale kiln, photovoltaic glass continues to reduce costs and increase efficiency: at present, the national soda ash inventory is about 1.4 million tons, which is at a historically high level, about 5.3 times the low point in 2021. The soda ash price remains high, and the recent price rise has been transmitted to the glass link. At present, the spot price of soda ash is 2850 yuan / ton, an increase of more than 78% over the beginning of 2020. If it is reduced to 2500 yuan / ton, the flat cost of photovoltaic glass will be reduced by about 1 yuan / m2. The large-scale kiln promotes the industry to reduce costs and increase efficiency. Taking the 1200t / D production line as an example, its total energy consumption is nearly 40% lower than that of the 500t / D production line, resulting in a cost reduction of about 3.8 yuan / m2 and a thickening gross profit margin of about 14pct.
Structural release of production capacity and constant strength of photovoltaic glass: we calculate that the demand for photovoltaic glass corresponding to the shipment of photovoltaic modules in China from 2022 to 2024 will reach 42575, 53982 and 65231t / D respectively, the CAGR will reach 25.90% from 2021 to 2024, and the market scale is expected to reach 32-39.4 billion yuan. The leading enterprises have made a long-term layout upstream and downstream, with high-quality quartz placer reserves, special pipeline gas and supporting services upstream and downstream of the industrial chain. We believe that the total production capacity announced at the hearing is only the total scale of the project. In the future, the rhythm of photovoltaic glass production is still dominated by restraint, meeting the demand of components and giving priority to low energy consumption. The energy consumption of leading enterprises is lower, the technical scheme is more advanced, and the project is easier to pass the review.
Investment advice
The industry supervision mode tends to overall control, and it is more difficult for small enterprises to meet multiple indicators such as energy consumption and environment. The concentration of photovoltaic glass industry is expected to be further improved, and the industry leaders will continue to benefit. Since 2022, the demand for modules has risen again and again, the inventory of photovoltaic glass has decreased rapidly by 46.12%, and the price of photovoltaic glass has rebounded again. In view of the high prosperity of photovoltaic glass industry and the continuous pace of production expansion of leading enterprises to enhance their competitiveness, we mainly recommend Flat Glass Group Co.Ltd(601865) , Changzhou Almaden Co.Ltd(002623) and Xinyi solar energy.
Risk tips
The prices of raw materials such as soda ash and quartz sand have further increased, the growth rate of photovoltaic installed capacity is lower than expected, the production capacity of photovoltaic glass is released too fast, and there are risks of differences in valuation systems in different markets
