The EU issued the REpower EU rules, and the installed capacity of photovoltaic will exceed expectations. The EU announced the details of the REpower EU scheme on May 18, which led to a sharp rise in the A-share photovoltaic sector on May 19. The detailed rules indicate that the EU will establish a special EU Cecep Solar Energy Co.Ltd(000591) strategy to double Cecep Solar Energy Co.Ltd(000591) photovoltaic power generation capacity by 2025 and reach 600gw of total installed capacity by 2030. Under the background of the substantial increase of photovoltaic installed capacity in Europe in the future, its import demand for photovoltaic modules in China is expected to increase significantly, so as to drive the demand of the whole industry chain of China’s photovoltaic industry from bottom to top.
Photovoltaic demand drives the consumption of silicon materials and benefits the development of industry leaders. Polysilicon is an important basic raw material in the photovoltaic industry chain. Driven by the prosperity of the photovoltaic industry, the demand for polysilicon continues to grow. At the same time, as a downstream product of industrial silicon, the demand for polysilicon will significantly stimulate the demand for industrial silicon. According to our calculation, China’s total demand for polysilicon will reach 1.11 million tons in 2025, corresponding to 1.19 million tons of industrial silicon. In addition, silicone products are widely used in the photovoltaic industry and will also benefit from the increased demand of the photovoltaic industry. Combined with the current supply and demand pattern of silicon material industry, energy consumption control policies and the integrity of industrial chain of various enterprises, leading enterprises with scale advantages and industrial chain advantages will be able to control production costs, so as to have stronger competitiveness and profitability.
The supply and demand is tight, and the photovoltaic demand drives the prosperity of EVA industry upward. Since the beginning of the year, with the recovery of downstream demand and the sharp decline of imports, the supply and demand of EVA has remained tight. As of May 19, 22, the average market price of EVA has risen to 26400 yuan / ton, the price has approached the high point in October of 21 years, and the prosperity of the industry has continued to improve. For the new capacity of EVA, especially photovoltaic EVA, its production expansion cycle is relatively long. In China, only a few enterprises such as Sri Lanka, Levima Advanced Materials Corporation(003022) , Formosa Plastics and others have stable supply capacity. The supply-demand mismatch pattern of photovoltaic grade EVA will continue in the short term, and the industry boom is expected to continue. In the medium and long term, as the main downstream demand field of EVA, the sustained and rapid development of China’s photovoltaic industry will drive the high demand of EVA.
Weekly rise and fall of sectors: in the past five trading days, most of the sectors in Shanghai and Shenzhen stock markets have shown an upward trend. This week, the Shanghai stock index rose by 2.02%, the Shenzhen Component Index rose by 2.64%, the Shanghai and Shenzhen 300 index rose by 2.23% and the gem index rose by 2.51%. CITIC basic chemical sector rose 2.8%, ranking fifth in all sectors. In the past five trading days, most of the sub sectors of the chemical industry showed an upward trend. The top five sub sectors were carbon fiber (+ 10.8%), rubber additives (+ 9.6%), fluorochemical (+ 8.5%), soda (+ 7.6%), and silicone (+ 5.8%).
Rise and fall of individual stocks: in the past five trading days, the top gainers in the basic chemical sector are: Guangdong Dazhi Environmental Protection Technology Incorporated Company(300530) (+ 23.96%), Jiangxi Black Cat Carbon Black Inc.Ltd(002068) (+ 22.74%), Yunnan Energy Investment Co.Ltd(002053) (+ 20.85%), Cngr Advanced Material Co.Ltd(300919) (+ 20.17%), Levima Advanced Materials Corporation(003022) (+ 19.24%).
Investment suggestions: (1) the upstream oil and gas sector is suggested to pay attention to Petrochina Company Limited(601857) , China Petroleum & Chemical Corporation(600028) , CNOOC, Enn Natural Gas Co.Ltd(600803) and other oil service targets. (2) White horse, the leader of undervalued chemical industry: it is suggested to pay attention to ① three chemical white horses: Wanhua Chemical Group Co.Ltd(600309) , Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) , Jiangsu Yangnong Chemical Co.Ltd(600486) ; ② Private refining and chemical fiber sector: Hengli Petrochemical Co.Ltd(600346) , Rongsheng Petro Chemical Co.Ltd(002493) , Jiangsu Eastern Shenghong Co.Ltd(000301) , Hengyi Petrochemical Co.Ltd(000703) , Tongkun Group Co.Ltd(601233) , Xinfengming Group Co.Ltd(603225) ; ③ Light hydrocarbon cracking sector: Satellite chemistry, Oriental Energy Co.Ltd(002221) ; ④ Coal to olefin: Ningxia Baofeng Energy Group Co.Ltd(600989) . (3) Plate: sector sector of new material sector: suggestions and concerns: sector sector sector: sector sector of sector: sector of sector: sector of sector: sector of sector: sector of sector: the following concerns: ① semiconductor materials: the Crystal Clear Electronic Material Co.Ltd(300655) ; ② Wind power materials: carbon fiber, polyether amine, matrix resin, interlayer materials, structural adhesive and other related enterprises; ③ Lithium battery materials: electrolyte, lithium battery diaphragm, phosphorus chemical industry, fluorine chemical industry and other related enterprises; ④ Photovoltaic materials: upstream silicon materials, EVA, soda ash and other related enterprises; ⑤ OLED industry chain: Valiant Co.Ltd(002643) , Xi’An Manareco New Materials Co.Ltd(688550) , Jilin Oled Material Tech Co.Ltd(688378) , Puyang Huicheng Electronic Material Co.Ltd(300481) . (4) Traditional cycle sector: it is suggested to pay attention to relevant targets in the fields of pesticides, coal chemical industry, urea, dyes, vitamins, chlor alkali, etc.
Risk analysis: the risk of rapid decline and high oil price; Downstream demand is less than expected risk.
