Currently, the addition of new photovoltaic links has slowed down, and high-cost, backward production capacity has begun to enter the elimination phase. It is expected that the low season profit will bottom out in 2024 Q2, and leading companies will be more resilient. Inverter turning point has appeared in the first half of the year, highlighting the cost advantage of leading companies in EVA film and glass.
According to the Futu Securities research report, the rise of emerging markets has driven the increase in grid-connected demand, and the inflection point of household storage inventory has appeared. Large-scale storage in China and the United States is in high demand, and large-scale storage in Europe, the Middle East and other markets has led to sustained growth in large-scale storage. N-type cells are blooming in many ways, and TOPCon is expected to remain mainstream within three years. The gradual introduction of 0BB is promoting cost reduction and efficiency improvement of TPC. It is worth noting that currently, the addition of new photovoltaic links has slowed down, and high-cost, backward production capacity has begun to enter the elimination phase. It is expected that the low season profit will bottom out in 2024 Q2, and leading companies will be more resilient. Inverter turning point has appeared in the first half of the year, highlighting the cost advantage of leading companies in EVA film and glass.
The main viewpoints of Soochow Securities are as follows:
In the era of photovoltaic energy storage parity, emerging markets have strong explosive power.
In 2024, domestic demand will grow steadily, with an expected increase of 240GW in newly installed capacity, an 11% increase year-on-year. Inventory reduction and interest rate cuts have begun in Europe, and it is expected that 72GW of new installations will be achieved in 2024, a 20% increase year-on-year. The United States is greatly affected by policy disturbances, and it is expected to install 40GW, a 29% increase year-on-year. Emerging markets such as the Middle East, Latin America, Southeast Asia and South Africa have strong explosive power, and global installation is expected to reach 490GW, a 21% increase year-on-year. The space for future development of photovoltaic energy storage parity has been opened, and it is expected that subsequent demand will maintain steady growth.
The supply of the photovoltaic main chain is in surplus, and the profit of the manufacturing end is under pressure, and the profit recovery is expected after the clearance.
Silicon materials: The output in 2024 is expected to exceed 2 million tons, and the price will drop to 0.035-0.04 million yuan/ton, entering the L-shaped bottom stage, with a large profit gap between cost and profit. The industry has begun to stop production and overhaul. There is an overcapacity of silicon wafers, and profits have entered the bottom range. N-type differentiation + operating rate differentiation may bring about differentiation in the profits of silicon wafer factories. New technologies for solar cell sheets are accelerating penetration, and TOPCon's mainstream status is determined, but rapid production catch-up has made NP the same price. It is expected that the profit will recover in the second half of the year after P-type is cleared. The profit of component manufacturing end is under pressure. The contribution premium of high-end market is abundant. Price wars + financing restrictions accelerate the elimination of excess production capacity. Leading companies are resilient and expected to rely on new technologies to emerge from the cycle.
The cost advantage of leading companies in EVA film and glass is significant, and inverters benefit from energy storage and overseas markets reaching inflection points.
Small auxiliary materials are under pressure from profits, and segmented links benefit from technological iteration.
Inverter: The rise of emerging markets has driven an increase in grid-connected demand. The inflection point of household storage inventory has appeared. Large-scale storage in China and the United States is in high demand; large-scale storage in Europe, the Middle East and other markets has led to sustained growth in large-scale storage. The short-term pressure of glass components has caused a price drop. The slow expansion of production capacity leads to strict constraints on excess capacity. Excess capacity is controllable. Following up on overseas layout orders of support brackets, the improvement of profitability structure will benefit from the strong growth of emerging markets such as the Middle East and Southeast Asia. LECO's difficulty in upgrading and continuous innovation of technology may make premium feasible. There is a large cost gap between Foster's first and second-tier films. Foster's leading position is stable, and new players have begun to be eliminated. The share of leading vendors of PV ribbon may rise, and 0BB may improve profitability. The rapid decline in the price of tungsten wire has made cost the core competitiveness of copper wires.
N-type integrated two wings, continuous improvement of efficiency of perovskite
N-type cells are blooming in many ways, and TOPCon is expected to remain mainstream within three years. The gradual introduction of 0BB is promoting cost reduction and efficiency improvement of TPC. The continuous improvement of laser sintering + Poly modification technology is reducing the cost of bilateral Poly. After the cost-effectiveness of HJT introduction of silver-coated copper is improved obviously, with the decrease of equipment cost and the expansion of production scale, the production advantage may be reflected. The future HJT penetration rate, profit-making ability and penetration rate are expected to increase. The BC single-sided market has high efficiency and beautiful advantages, and has entered the industrialization stage. Along with the improvement of efficiency, optimization of double-sided rate and cost reduction, the double-sided market may further open up. Calcium titanium ore material is excellent, and it is expected to take the lead after 2027; GW-level production lines have been successively launched, and it is expected that single-junction efficiency will reach 20% in 2024, obtaining cost-effectiveness. The efficiency of stack components is expected to exceed 30%, and the stacking of crystalline silicon and perovskite may take the lead and lead industry technological iteration.
Regarding Symbol.
Key recommendations: Inverter: Sungrow Power Supply (300274.SZ), Ginlong Technologies (300763.SZ), DeFeng Shares (605117.SH), Jiangsu Goodwe Power Supply Technology Co., Ltd. (688390.SH), Hemai Shares (688032.SH), Shenzhen Sinexcel Electric (300693.SZ), Shenzhen Kstar Science & Technology (002518.SZ), Yunneng Technology (688348.SH), Focus on Jiangsu Tongrun Equipment Technology (002150.SZ) and Kehua Data Co., Ltd. (002335.SZ); Component: JinkoSolar (688223.SH), Atesi (688472.SH), Trina Solar Co., Ltd. (688599.SH), JA Solar Technology (002459.SZ), Longi Green Energy Technology (601012.SH), Tongwei Co., Ltd (600438.SH), Focus on Risen Energy (300118.SZ), Hengdian Group DMEGC Magnetics (002056.SZ), Eging Photovoltaic Technology (600537.SH).
Recommended battery technology leaders: JinkoSolar (688223.SH), Hainan Drinda New Energy Technology (002865.SZ), Shanghai Aiko Solar Energy (600732.SH), Focus on Leascend Technology (300051.SZ). Stable layout of backsheet, glass and auxiliary materials: Hangzhou First Applied Material (603806.SH), Flat Glass Group (601865.SH), Poly and Material (688503.SH), TCL Zhonghuan Renewable Energy Technology (002129.SZ), Yubang New Material (301266.SZ), Yangling Metron New Material (300861.SZ), Quick Electronics (301278.SZ), Focus on Tongling Shares (301168.SZ), Wuxi DK Electronic Materials Co., Ltd. (300842.SZ).
Risk warning: Intensified competition, restriction of grid absorption, unexpected changes in photovoltaic policies, and the newly installed capacity is not up to expectations.