The domestic PV self-built production capacity layout in the US is expected to accelerate. HJT is the optimal solution for the US market.

Focus on the new investment opportunities brought about by the construction of new photovoltaic production capacity in the US. The US is expected to add 43 GW of new PV installations in 2024, +34% year over year, and centralized PV installations account for 60% to 70%, making it a high-premium high-quality market. The biggest difference in PV manufacturing between China and the US is the difference in cost factors. The PK in China's PV manufacturing process is channel sales & cost control & scale effects & government relationships. However, labor costs in US production costs are 6-7 times that of China, and the most important variables are labor & plant & operating costs.

Compared with TopCon, HJT can reduce carbon emissions by 20% (low temperature process throughout the process), save 30-40% of electricity consumption (fewer processes & low temperature process), save 60% of labor (only 4 processes), and save 20% of water consumption, so it is the most suitable photovoltaic technology route for expanding production in the US.

Furthermore, TopCon is facing patent issues in the US. Recently, US solar panel manufacturer FirstSolar stated that it has a TopCon crystal silicon technology patent and is investigating competitors' infringement. Its TopCon patents cover a number of important markets including the US, Canada, Mexico, China, Malaysia, Vietnam, Japan and Australia, and the validity period of these patents will continue until 2030. During this period, any unauthorized use of the technology may constitute infringement.

Therefore, we are optimistic about new opportunities for HJT's full-line equipment leader to go overseas, and until May 31, 2025, all exports of Chinese photovoltaic equipment will be exempt from tariffs (30%). We believe that before the end of this year, orders to expand production in the US will accelerate, and overseas orders from equipment vendors are expected to arrive at an accelerated pace in 2024Q4.

The advanced production capacity layout of leading domestic integration companies is accelerating, and the expansion of advanced production capacity first favors advanced equipment.

On October 30, 2024, Tongwei Photovoltaic Technology Center announced that the maximum output power of 210 heterojunction modules reached 776.2W, and the photoelectric conversion efficiency reached 24.99%. Since 2023, Tongwei has broken the HJT component power and efficiency world record nine times. Currently, the main point of disagreement in the industry is whether the next generation technology is HJT or TBC. We believe that the problem with the BC route is that the double surface ratio is low, and the HJT passivation effect is excellent. At the same time, its low temperature coefficient and high double surface ratio are more advantageous in large power plant applications. The prerequisites for large-scale industrialization of HJT are at least 25W. The two mass production conditions of HJT have basically been realized, and large-scale production expansion is imminent.

Profit forecast and investment rating: As a leader in HJT complete line equipment, Maiwei Co., Ltd. benefits from the accelerated expansion of HJT battery production, and the long-term pan-semiconductor sector layout opens up room for growth. We maintain the company's net profit forecast for 2024-2026 at 1.2/1.8/2.5 billion yuan, corresponding to the current PE price of 28/19/13, maintaining a “buy” rating.

Risk warning: Downstream production expansion falls short of expectations, and new product expansion falls short of expectations.