The Zhitong Finance App learned that Guokai Securities released a research report saying that in January-February 2024, domestic and foreign PV market demand continues to improve. In the future, as distribution networks continue to be improved, consumption problems are solved, and industry production capacity is accelerated, the fundamentals of the photovoltaic industry are expected to be further optimized. It is recommended to focus on companies related to actively developing emerging markets in Asia, Africa, and rural distributed photovoltaics, as well as companies in the auxiliary materials industry benefiting from installed growth, including: Tianhe Solar (688599.SH), Xineng Technology (603105.SH), Sunshine Power (300274.SZ), Follett ( 601865.SH).

The main views of CDB Securities are as follows:

Recently, the National Bureau of Statistics released data showing that in January-February 2024, the installed capacity of new PV power generation was about 36.72 GW, an increase of 80.3% over the previous year, and the performance exceeded market expectations. China Development Securities believes that the main reason is that the price of PV modules continued to drop last year, and the economic efficiency of photovoltaic power plants improved, leading to a sharp increase in installed demand, which eventually achieved 216.88GW of PV installed capacity in 2023. This high growth trend continued throughout the first quarter of this year, but in the future, as production capacity is gradually cleared, module prices may be adjusted. It is expected that the new PV installed capacity will reach around 240 GW in 2024.

The proportion of distributed installations surpasses that of centralized ones. According to SMM statistics, distributed installations may account for nearly 60% of the new PV installations in January-February 2024, and the return on investment in some distributed power plants has improved markedly. Since this year, a number of policies have been issued to support the development of distributed photovoltaics, including high-quality development of distribution grids, active resolution of consumption problems, and development of distributed photovoltaics in rural areas. It is expected that in 2024, the share of distributed photovoltaics will still surpass centralized photovoltaics. After the grid connection problem is gradually resolved, household distribution may develop rapidly.

The number of PV module exports has increased significantly, but price competition needs to be improved. CDB Securities believes that on the one hand, demand in the Asian market is rising rapidly, mainly because India has been stimulated by policies and is growing at the fastest rate, and demand in the Pakistani and Saudi PV markets continues to be strong; on the other hand, demand is gradually recovering after Europe removed inventory, with Germany's installed capacity growing rapidly. Although the export volume performance exceeded expectations, effectively improving previous pessimistic expectations, it is also necessary to see a decline in PV export value. The main reason is that module prices have fallen all the way down. Overall, emerging markets are expected to become a key direction for leading companies in various fields to expand their growth in the coming year.

Risk warning

Policy progress fell short of expectations, the international trade environment deteriorated, market competition was vicious, the risk that global installed capacity demand fell short of expectations, the risk that domestic and foreign epidemics would worsen beyond expectations, and domestic and foreign economic recovery fell short of expectations.