Zhongtong Finance learned that according to a research report released by SWHY Securities, in 2024 the overall growth of the electric vehicle/wind power/energy storage is still ongoing, facing the main constraint of the slowdown in the growth rate of periodic demand and the continuous increase in new capacity, and the industry's profitability is still under pressure. The team recommends paying attention to the changes of one bottom and two wings in the second half of the year, one bottom corresponds to the bottoming out of the price war, and the market expects to stop falling, the two wings correspond to strong performance and strong margin.

Lithium electricity: The price war is coming to an end, and new technologies are being added. The profitability of the industry continues to bottom out in the first quarter of 2024. Recently, the policy end has put forward higher requirements for the new capacity and product access of lithium electricity, and the main companies in the industry have slowed down their capital expenditures. Coupled with the gradual recovery of the demand of the industrial chain, the industry's capacity utilization rate has begun to rebound. In the second half of the year, the focus is on two turning points, one is the turning point of the demand slowdown (energy storage/overseas electric vehicles/consumer 3C's new start), and the other is the turning point of the price war (more car companies withdraw the war and switch to stable prices and increased allocations). From the trigger sequence, the latter price signal may come first, and it is recommended to pay attention to the profit repair of the front-line enterprise brought by the bottoming out of prices and the rebound of capacity utilization rate. As the supply-demand rebalancing becomes clearer, the momentum of subdivided new technologies will become more abundant.

Photovoltaics: The industry grinds at the bottom and waits for recovery. Since 2023, the mismatch of supply and demand has led to a continuous decline in the prices of the industry chain. In June, the industry's production capacity decreased significantly, and many companies in the main chain links fell into losses. In the second half of the year, with the stabilization of prices and the improvement of demand, it is expected that Q4 2024 will see a turning point of profitability. The bottom of this cycle in the photovoltaic industry may be longer, and cash reserves are critical to corporate survival. The slowdown in industry technological progress brings new changes to HJT. The overseas destocking of power inverters is coming to an end, and the export growth rate has reached a turning point.

Wind power: Pay attention to the realization of the logic of offshore wind. From January to May 2024, China's wind power installed capacity was 19.76GW, a year-on-year increase of 21%. It is expected that the offshore wind power installed capacity in China in 2024 and 2025 will be 10-12GW and 15-18GW, respectively. It is bullish on the component sections with higher technical barriers (marine cables) and larger-scale production capacity barriers (offshore bases, large castings). With the increase of the offshore distance of offshore wind power projects, marine cable products will be upgraded soon. With the acceleration of offshore wind power scale, the production capacity barriers of pipe piles and guide frames are higher, and the supply of basic products for offshore wind power is expected to be tight.

Investment analysis opinion: Performance is the anchor, and the margin is the edge. In 2024, the overall growth of the electric vehicle/wind power/energy storage is still ongoing, faced with the main constraint of the slowdown in the growth rate of periodic demand and the continuous increase in new capacity, and the industry's profitability is still under pressure. Corresponding funds will flow more into individual stocks with performance certainty.

Risk warning: 1) The policy implementation effect does not meet expectations; 2) Fierce competition leads to a more-than-expected decline in prices; 3) The risk of rapid changes in technology routes.