The Zhitong Finance App learned that Huafu Securities released a research report saying that the world's new PV installations are expected to be 380/470 GW in 23/24, with a year-on-year growth rate of 24% in 24, and demand is still resilient. On the domestic side, the cost of upstream raw materials has dropped sharply, boosting terminal demand and driving PV installations to exceed expectations. It is estimated that new PV installations will reach 180/210 GW in 23/24, and an increase of 17% in 24. On the US side, the IRA bill stimulates the +PPA electricity price up+interest rate cut cycle to resonate PV installation demand. It is estimated that 38 GW of new installed capacity will be added in 24 years. Furthermore, many European countries have upgraded their installed capacity targets to demonstrate their determination to achieve carbon neutrality. Energy policies and green transformation continue to drive the growth of European PV demand. It is estimated that the number of new PV installed capacity will be 65/90 GW in 23/24.

Huafu Securities's views are as follows:

Industry: The Chinese, American and European markets are making triple strength, and emerging markets are about to start.

Global: The world's new PV installations are expected to be 380/470 GW in 23/24, with a year-on-year growth rate of 24% in 24, and demand is still resilient. China: Upstream raw material costs have dropped sharply, spurring terminal demand, and PV installations have exceeded expectations. It is estimated that in 23/24, China's new PV installed capacity will reach 180/210 GW, an increase of 17% in 24, and the trend of demand growth will not change. US: The IRA Act stimulates the PPA electricity price up+interest rate cut cycle to jointly boost PV installed demand. It is estimated that 38 GW of new installed capacity will be added in 24 years. Europe: The increase in installed capacity targets in many countries shows their determination to achieve carbon neutrality. Energy policies and green transformation continue to drive the growth of European PV demand. It is estimated that the number of new PV installed capacity will be 65/90 GW in 23/24. Emerging markets: The speed of energy transformation in the Middle East and Africa markets is compounded by obvious regional advantages. It is estimated that the number of new PV installations added in 23/24 will be 12/16 GW.

Main chain: Profits can be expected to bottom out, and advances in new technology are driving benefits for leading companies.

Silicon material: Overcapacity is the consensus. It is estimated that by the end of 23, global polysilicon production capacity will exceed 2.4 million tons, supporting component demand will exceed 900 GW, and maintain an excess pattern in 24/25. It is estimated that the cash cost of silicon removal in 24 years will be 50,000 yuan/ton; leading companies have cost advantages, focusing on NP silicon price differences and progress in granular silicon technology.

Silicon wafers: The production capacity of major manufacturers in 23 was 826 GW, and Longji Green Energy and TCL Zhonghuan silicon wafers are in a stable position; the internal layer sand supply gap is expected to be 0.9/20,000 tons in 23/24, respectively. Along with Sibelco's production capacity expansion, the shortage of inner layer sand supply will ease relatively.

Battery: TopCon technology still has room for improvement. The superposition of laser SE and double-sided poly can increase mass production efficiency from 25.3% to 26% +; HJT industrialization and cost reduction processes are accelerated, and XBC's high conversion efficiency may be mainstream in long-term crystalline silicon battery technology.

Components: The share of leading manufacturers continues to rise, and the top ten component manufacturers have shipped about 223 GW in 23 years; the bank expects PERC, TopCon, heterojunction (low temperature silver paste) and heterojunction (silver coated copper +0BB) costs to be 0.93/0.98/1.08/1.05 yuan/W, respectively, when the price of silicon is 65 yuan/kg, and the component price may be supported near the cost line.

Auxiliary materials: Focus on production capacity or inventory where production capacity or inventory is expected to be cleared, and new technology release structure upgrades.

Inverters: Overseas, especially European household storage & micro-reverse inventories, channel storage pressure suppresses inverter shipments. Inverter export performance was poor in 23; affected by Europe's high photovoltaic economy and the constant demand for autonomous and controlled energy, the high growth rate of optical storage terminals in 24 helped clear European inverter inventories. Carbon-carbon thermal field: The demand side considers the three types of new/replacement/transformation demand, and the 25-year demand is expected to reach 14,733 tons, 22-25 CAGR is 43%; the supply side expects the industry supply to be 9771/11671/14971 tons in 23-25, and CR4 production capacity is expected to reach 84% in 25, and the industry's production capacity is concentrated at the head; hot field prices have risen, and profits are expected to bottom out and rebound in 24.

Silver paste: Topcon silver paste processing costs have a 300+ yuan/kg premium compared to PERC silver. Leading silver paste companies are expected to fully benefit from the increase in Topcon's share of shipments; leading silver paste companies have an increase in the upstream silver powder & silver powder localization ratio, compounded by the increase in LECO's special silver paste processing costs, and the profit of leading silver paste enterprises may increase in 24 years.

Adhesive film: By the end of 23, the industry's nominal production capacity was about 7 billion square meters, which was in excess compared to 24; the gross margin of adhesive film fluctuated greatly due to upstream particle prices, and is expected to improve with lower particle prices in 24; with N-type battery technology in full bloom, the focus is on changes in various categories of film packaging solutions.

Glass: Production expansion and financing policies have been tightened, and photovoltaic glass production capacity investment has slowed markedly. In October '23, China's photovoltaic glass production capacity was 95,280 t/d, which had dropped to 36% year on year; 23Q1-24Q4 photovoltaic glass excess capacity ratio was 22%/19%/1%/6%/5%/4%/3%, respectively. Coupled with half a year of glass profitability pressure testing, the actual supply is less, and the PV glass supply and demand structure has gradually balanced.

Welding belt: Photovoltaic welding belt developed from flat welding belt to MBB round welding belt, SMBB welding belt, low temperature welding belt, and XBC welding belt, and thinning became a key trend in the future development of welding belts; 0BB opens new ideas to reduce silver, and HJT is expected to spawn demand for low temperature welding belts; BC development boosts demand for round welding belts, and leading companies have accumulated a lot in the field of flat welding belts.

Investment advice:

1) Silicon wafer faucets with significant competitive advantages and high-purity quartz sand insurance: it is recommended to focus on TCL Central (002129.SZ);

2) Integrated components with increased efficiency: it is recommended to focus on Longji Green Energy (601012.SH), Jingao Technology (002459.SZ), Jingke Energy (688223.SH), etc.;

3) Profit recovery and battery links that are expected to enjoy new technology premiums: It is recommended to focus on Aixu Co., Ltd. (600732.SH), Junda shares (002865.SZ), Shijing Technology (301030.SZ), etc.;

4) Inverters and auxiliary materials benefiting from burgeoning demand and steady increase in profits: it is recommended to focus on Sunshine Power (300274.SZ), Deye Co., Ltd. (605117.SH), Goodway (688390.SH), etc.;

5) Power plant development and operation process: It is recommended to focus on Jingke Technology (601778.SH), Nenghui Technology (301046.SZ), Linyang Energy (601222.SH), etc.;

6) Leading silicon companies with cost advantages: It is recommended to focus on Tongwei Co., Ltd. (600438.SH), GCL Technology (03800), and Daquan Energy (688303.SH).

Risk warning: Global demand for optical storage fell short of expectations, industrial chain prices fell beyond expectations, and overseas interest rates fell short of expectations.