Recently, many photovoltaic giants announced the establishment of a joint venture with Saudi Arabia to invest in photovoltaic and energy storage projects. As of now, the total order amount is as high as hundreds of billions yuan.
According to Futubull Finance App, recently, many photovoltaic giants announced the establishment of a joint venture with Saudi Arabia to invest in photovoltaic and energy storage projects. As of now, the total order amount is as high as hundreds of billions yuan. Among them, Sungrow Power Supply and Saudi ALGIHAZ have successfully signed the contract for the world's largest energy storage project with a capacity of 7.8 GWh. The news led to a nearly 10% surge in Sungrow Power Supply's stock price on July 16, bringing a rebound to the photovoltaic sector.
TCL Zhonghuan Renewable Energy Technology recently announced that the company, Vision Industries, and RELC, a PIF subsidiary, signed a shareholder agreement to establish a joint venture in Saudi Arabia to build a 20 GW photovoltaic crystal chip factory with a total investment of approximately USD 2.08 billion.
JinkoSolar also announced that its wholly-owned subsidiary, Jinko Middle East, signed a shareholder agreement with RELC and VI, a wholly-owned subsidiary of the Saudi Public Investment Fund, to establish a joint venture in Saudi Arabia to build a 10 GW high-efficiency battery and module project with a total investment of approximately SAR 3.693 billion (approximately USD 0.985 billion).
It is understood that the Middle East has inherent advantages in the development of photovoltaics. The Middle East has long sunshine hours and sufficient light resources. The photovoltaic development environment is favorable. Moreover, due to the trade barriers against Chinese photovoltaics set up by Europe and the United States, the Middle East is becoming a "new frontier" for Chinese photovoltaic companies to seize overseas markets.
In the past year, the UAE, Saudi Arabia, Qatar and Oman have promoted renewable energy projects. For example, according to the updated National Energy Strategy 2050 approved by the UAE government, by 2030, the UAE government's investment in the energy sector will increase by AED 150 billion to 200 billion. The strategy plans to double the installed capacity of renewable energy to reach 14.2 GW by 2030, increasing the share of clean energy in the total energy structure to 30%.
Overall, the Middle East market has huge potential for the development of photovoltaics. According to data compiled by Infolink Consulting, the demand for photovoltaics in the Middle East is expected to reach about 20.5 GW-23.6 GW by 2023, with a significant increase in photovoltaic demand in markets led by Turkey, Saudi Arabia, and the UAE.
In this context, an increasing number of Chinese photovoltaic companies are turning their attention to the Middle East market, seeking new opportunities for overseas development.
Sinolink Securities believes that with the continuous introduction of large-scale projects by governments in the Middle East and the economic benefits brought about by the decline in component prices, it is expected that the demand for photovoltaics in the Middle East will grow rapidly by 2024.
Soochow Securities stated that the addition of production capacity for photovoltaics in multiple links has slowed down, and high-cost backward production capacity has begun to enter the phase of clearing. It is expected that the profits in the 2024Q2 off-season will bottom out, and the head companies will be more resilient. The inverter has shown a turning point in the first half of the year, and the cost advantage of head companies in film and glass has become prominent. It is recommended to pay attention to the head companies of new inverter, component, battery technology, and stable grid of film, glass and auxiliary materials.
Related concept stocks:
GCL Tech (03800): The company mainly engages in manufacturing polycrystalline silicon and silicon wafers for photovoltaic companies, as well as developing and managing eco-friendly power plants. It is one of the top four giants in the domestic silica materials industry. GCL Tech continues to expand particle silicon production capacity, and is expected to reach 300,000/400,000/500,000 tons of silica materials production capacity from 2023 to 2025, respectively.
Flat Glass Group (06865): By the end of 2023, the company's total production capacity will be 20,600 tons/day, with a daily melting capacity of 9,600 tons/day for Anhui Phase IV and Nantong projects, which is expected to be operational this year. The company plans to invest in and build a photovoltaic glass kiln in Indonesia to meet the demand for photovoltaic glass in different countries and regions.
Xinte Energy (01799): The company's main business is the production of polysilicon and providing engineering and construction contract services for solar and wind power plants and systems, as well as the operation of solar and wind power plants. In early November 2023, Guosen Securities (Hong Kong) released a research report stating that the current silicon material prices may have reached the bottom area. Although it will take some time to reverse the supply and demand pattern, the Xinte Energy stock price has already responded sufficiently to the market's pessimistic expectations.
Xinyi Solar (00968): With the rapid decline in component prices in 2023, the company took the opportunity to increase the scale of photovoltaic power plants connected to the grid, with a total of over 1GW new connections throughout the year, a 22% increase, driving an 8% increase in power plant revenue. On February 28, the company signed a 790MW power plant transfer agreement with Xinyi Energy. The company's development and sales business model is rolling out smoothly. In addition, the company's 60,000-ton polysilicon project in Qujing, Yunnan is expected to start production in the first half of 2024 and contribute to output in the second half of the year.