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国金证券:光伏龙头Q3业绩超预期 有望驱动板块行情彻底筑底回升

Guojin Securities: The Q3 performance of the leading photovoltaic company exceeded expectations and is expected to drive the sector market to a complete bottoming out and recovery

Zhitong Finance ·  11/06/2023 08:27

Recently, the photovoltaic industry is showing an increasingly obvious trend of supply-side improvement. Events such as the gradual emergence of price dynamics/profit inflection points in the industrial chain, the sharp decline in Q3 institutional holdings, and the Q3 performance of leading companies exceeding expectations to verify alpha ability are expected to drive the sector to completely establish a solid base and continue to rebound.

The Zhitong Finance App learned that Guojin Securities released a research report saying that the photovoltaic industry is showing an increasingly obvious supply-side improvement trend recently. Events such as the gradual emergence of price dynamics/profit inflection points in the industrial chain, the sharp decline in Q3 institutional holdings, and the Q3 performance of leading companies exceeding expectations to verify alpha ability are expected to drive the sector market to completely establish a solid base and continue to rebound.

In terms of individual stocks, it is recommended to focus on the layout of alpha prominent links/companies/main lines: integrated module leaders that have underestimated the ability to maintain profits in the short to medium term and the stability of the medium to long term competitive pattern; energy storage that is resistant to fluctuations in the main photovoltaic industry chain and has catalytic policy catalytic expectations in the second half of the year; strong cycle link leaders with alpha outstanding business or product line layout; equipment and materials leaders with clear direction and continuous catalysis in the direction of new electroplated copper (HJT) & perovskite technology; profit bottoms out, and profit increases along with scheduling An auxiliary material/consumables link that is flexible and has outstanding leading advantages.

The main views of Guojin Securities are as follows:

The overall price of the main PV industry chain was in a downward channel in the third quarter of 2023. Upstream prices bottomed out, and downstream prices continued to adjust; demand remained high. In Q3, domestic PV installed capacity increased by 133%, the ring increase of 13%, and battery module exports by 14%. High demand led to a continuous increase in industrial chain shipments, but due to the rapid decline in industrial chain prices, the revenue of the main part of the Q3 season fell slightly ([SW PV Equipment] caliber revenue +0.9%, -4.8% month-on-month), and sector profitability was under pressure ([SW PV Equipment] caliber net profit was -36%, -27% month-on-month, gross margin -3PCT, net profit margin -5.6PCT yoy).

Specifically, look at each link: 1) Silicon materials: Q3 product prices and profits have declined, and the average profit gap between leading companies and the industry has widened; the release of new supply in Q4 has driven a decline in prices, and the cost and quality advantages of leading companies are expected to continue to be highlighted. 2) Silicon wafers: The Q3 production schedule increased month-on-month compared to Q2, but the rapid decline in later prices affected profits; the price reduction of silicon materials is expected to ease cost pressure in stages. Under the N-type trend, the technological advantages of leading companies are expected to support profit levels. 3) Cell: Q3 profit remains high, Q4 has climbed production volume and profit center declined, and TopCon product premiums and excess profits have narrowed; in the medium term, compression of excess profits and tightening of industry financing may make the scale of subsequent battery sector expansion lower than expected, supporting reasonable profits, and the continuous introduction of new processes on the TopCon technology platform will further widen the gap between enterprises. 4) Integrated components: Q3 integrated unit profits remain relatively high, better than the theoretical profit level measured according to spot prices, and the month-on-month decline is close to market expectations; Q4 leading companies' shipments are expected to continue to grow, but due to factors such as the order cycle, shipping structure, and inventory impairment at the end of the year, Q4 reporting unit profits may continue to decline month-on-month. Among them, new production capacity is released faster, and the degree of integration has increased. Enterprises with a high share of sales in overseas high-value markets are expected to continue to show significant α profitability. 5) Inverters: Overseas inventory pressure in Q3 has eased, and the German market has taken the lead in recovering. Q4 distributed shipments are expected to resume increasing; domestic centralized rush at the end of the year, and the installed capacity for optical storage is expected to increase month by month, which will drive rapid growth in Q4 large-scale optical storage inverter shipments and the dilution of cost rates to support profit performance. 6) Auxiliary materials: The increase in Q3 component production schedule led to an increase in auxiliary material shipments, and some profits improved month-on-month; the Q4 auxiliary materials chain shipment and profit situation will depend on factors such as downstream production scheduling/dewarehousing pace. 7) Equipment: The Q3 equipment sector has achieved profit cycle growth and profitability differentiation. Equipment companies with leading progress in new product layout and N-type high-efficiency battery technology research and development will fully benefit from the penetration process of new technology from 0 to 1. Not only has the “second order of prosperity” attribute clearly weakened, profit margins will also be strengthened; looking ahead to Q4, the profits of equipment companies that are progressing rapidly in the field of new technology development are expected to continue to exceed expectations.

With strong business performance, leading companies in the Q3 industry all showed performance that exceeded expectations and business indicators that were superior to peer companies, showing strong alpha profitability, fully verifying one of the core ideas put forward in our mid-term strategy report: under the trend of excessive total volume in the photovoltaic industry and the continuous increase in the proportion of downstream N-type products, the profit margin of leading multi-sector companies is expected to expand.

Looking ahead to Q4, the fourth quarter is the peak season for centralized traditional domestic installations. Demand is expected to remain at a relatively strong level. At the same time, considering the continued release of additional production capacity for supply-side silicon materials, we expect industry shipments to maintain month-on-month growth. In terms of profit, with the release of the supply of new silicon materials, it is expected that silicon prices will fall again. Profits for middle and downstream and integrated components may be restored in stages, but considering factors such as industry inventories, supply and demand patterns, and component order cycles, it is expected that the profit of reporting units is still in a declining channel (the probability of bottoming out in 4Q23 or 1Q24 is high), and the profitability of companies with superior production capacity, channels, and diversified business layouts is more certain.

Investment advice:

The photovoltaic industry has recently shown an increasingly obvious supply-side improvement trend. Events such as the gradual emergence of price dynamics/profit inflection points in the industrial chain, the sharp decline in Q3 institutional holdings, and the Q3 performance of leading companies exceeding expectations to verify alpha ability are expected to drive the sector market to completely establish a solid base to rise and continue to rebound. It is recommended to focus on the layout of prominent links, companies, and main lines: 1) Integrated module leaders with underestimated medium- to short-term profitability and medium- to long-term competitive pattern stability; 2) Strong ability to withstand fluctuations in the main photovoltaic industry chain, and catalytic policy retention in the second half of the year Expected energy storage; 3) Outstanding with α Strong cycle chain leader with business or product line layout and ability to cross the cycle; 4) the equipment/material leader with a clear direction and continuous catalysis in the direction of new electroplated copper (HJT) & perovskite technology; 5) the auxiliary/consumables chain with profit bottoming out and increasing profitability and outstanding leadership advantages as production schedules increase.

Risk warning:

The price of traditional energy has fluctuated greatly (downward), the industry's production capacity has expanded irrationally, the international trade environment has deteriorated, and the cost reduction of energy storage and pan-flexible resources has fallen short of expectations.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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