The Zhitong Finance App learned that Changjiang Securities released a research report saying that the PV sector showed strong performance in February, and the PV manufacturing (Yangtze River) index rose 11.32%, outperforming the Wind All A Index by 1.65 pct. On the one hand, the Wandequan A Index rose 9.67% in February, and the photovoltaic sector was driven by the rise in the general market; on the other hand, the increase in volume and price in the photovoltaic industry constituted a market catalyst. Currently, installations are being repaired, prices are picking up, and we continue to look bullish on the PV sector. Global PV installations are expected to improve, battery module production schedules have increased sharply from month to month, and a trend of price increases in the industrial chain is already emerging. Continue to be optimistic about the photovoltaic sector. Recommended configurations: inverters with improved inventory disturbances and profit support; auxiliary materials with relatively optimal cycle positions and industry patterns; integrated components with excessive pessimistic profit expectations; targets related to new technology; and high-quality leaders in other segments.

Market review: The February sector showed strong performance, and the upward trend in volume and price was clear

Changjiang Securities said that looking back at fundamentals, the upward trend in volume and price in the photovoltaic industry is clear. In terms of volume, production is scheduled to be above 50 GW in March, and Q2 is expected to maintain an upward trend month by month; looking at the whole year, domestic PV installed capacity is growing on a solid basis, the top level is setting the target to develop new energy more vigorously. Total energy consumption exceeds expectations, driving a significant increase in the installed landscape center, the country pushes large base projects to be completed and put into operation on schedule, and the distribution grid increases carrying capacity to increase distributed access space. In terms of price, all links in the industrial chain have increased prices one after another. Component companies are planning to increase the price by 2-4 cents, the price increase of batteries by 1 cent, and the increase in particle prices is transmitted to the film.

Sentiment tracking: Battery module production schedules are picking up, and the trend of price increases is already emerging

On the demand side, domestic installed capacity is expected to maintain a high level of operation. Domestic component tenders increased 11% year on year. Although partial distribution network access space was limited, distribution maintained a relatively rapid growth rate; Germany continued to grow at a high rate of installation in January, and the bid capacity increased 38% year on year; US installed capacity is expected to improve, and the price level is high; India's ALMM policy is on hold, which favors Chinese component exports. On the supply side, there is a phased excess of silicon wafers, a sharp increase in battery module production schedules, and profit pressure is compounded by tightening financing to speed up production capacity clearance.

On the price side, there is already a trend of price increases in the industrial chain. The component chain is preparing to increase prices. The price increase of batteries is 1 cent, and the increase in particle prices is transmitted to the adhesive film. Glass inventories decline as demand recovers. Prices are expected to rise in the second quarter. On the profit side, only the silicon sector is marginally profitable; all other aspects are under pressure.

Mid-term research: There are positive factors in both supply and demand profits, and spring weather returns to the upward demand side

Looking at the long term, the carbon neutrality consensus opens up demand space. It is estimated that the global PV installed capacity will exceed 45 TW and the average annual installed capacity will exceed 1,500 GW in 2060; in the medium term, domestic and foreign markets have initially achieved optical storage parity, the consumption impact is controllable and there is room for improvement. Policy support is strong, and PV installations are expected to enter the TW era around 2028; in the short term, the global PV installed capacity is expected to exceed expectations by about 30%. Domestic and non-European and American overseas markets are expected to exceed expectations.

On the supply side, overcapacity has become the trend for the next two years, but actual supply capacity is likely to be lower than planned; at the same time, diversification of technology routes and overseas factory construction are expected to avoid homogenous competition, and it is expected that supply and demand will improve in the second half of 2024. On the profit side, the industry has changed from demand pricing to cost pricing. Currently, the price and profit of the industrial chain have all fallen to the bottom range. Leading companies have a cost advantage over second- and third-tier companies.

Investment advice

Changjiang Securities said that the installed capacity has been upgraded, prices have picked up, and it continues to look bullish on the PV sector. Global PV installations are expected to improve, battery module production schedules have increased sharply from month to month, and a trend of price increases in the industrial chain is already emerging. Recommended configuration:

1) Inventory disturbances have improved, and profits are still supported by inverters: Sunshine Power (300274.SZ), Deye (605117.SH), Goodway (688390.SH), Jinlang Technology (300763.SZ), Hemai (688032.SH), Yuneng Technology (), etc. 688348.SH

2) Auxiliary materials with relatively optimal cycle location and industry pattern: Foster (603806.SH), Follett (601865.SH), polymeric materials (688503.SH), Dike Co., Ltd. (300842.SZ), Haiyou New Materials (), Xinyi Solar (00968), etc. 688680.SH

3) Integrated components with excessive pessimistic quantitative profit expectations: Jingao Technology (002456.SZ), Jinko Energy (688223.SH), Artes (688472.SH), Longji Green Energy (601012.SH), Tianhe Solar (), Tongwei Co., Ltd. (USD), Hengdian East Magnetic (002056.SZ), etc. 688599.SH 600438.SH

4) New technology-related targets: Autoway (688516.SH), Junda Co., Ltd. (002865.SZ), Jiejia Weichuang (300724.SZ), Aixu Co., Ltd. (600732.SH), etc.

5) High-quality leaders in other segments: TCL Central (002129.SZ), Zhengtai Electric (601877.SH), Jingsheng Electromechanical (300316.SZ), CITIC (688408.SH), Jinbo Co., Ltd. (688598.SH), Shuangliang Energy Saving (), Linyang Energy (USD), etc. 600481.SH 601222.SH

Risk warning

The risk of demand fluctuations; the risk of trade friction; the risk of increased competition.