Pacific Securities: Energy storage costs are flat, prices and profits are expected to reach a turning point

According to the Zhitong Finance APP, Pacific Securities released a research report stating that with the start of the interest rate cut cycle, accelerated overseas capacity construction, geopolitical easing, the supply and demand will be re-matched by 2025. At the same time, with the accelerated global deployment of cost parity for solar energy storage, the photovoltaic industry will usher in a new upward cycle. From various markets, Europe and the United States have already achieved cost parity for solar energy storage, while China, India, the Middle East, and other emerging markets are accelerating the process. With the deep clearance of domestic photovoltaic capacity, supply and demand are expected to reshape rapidly, and prices and profits are expected to recover with the acceleration of short-term destocking.

Continuous advancement of new technologies opens a new cycle. Emphasis on technological innovation at the bottom, breakthroughs in technology are expected to deepen the cost advantage of leading enterprises. In the silicon material segment, as the cost of granular silicon decreases, product parameters improve, capacity is put into operation, and downstream penetration increases, the cost advantage is expected to be highlighted at the bottom; The battery cell segment remains the core of this round of technological iteration, with leading enterprises increasing BC production capacity and more companies participating in BC production research, BC cost reduction is expected to accelerate by 2025. At the same time, with the advancement of HJT and perovskite research, HBC and stacked production are expected to accelerate industrialization.

Emphasis on supporting sectors with a good supply and demand structure. With the expansion of cost parity for solar energy storage, the core and emerging markets have strong demand for solar energy storage, and the inverter sector is the first to usher in a new cycle. Meanwhile, bracket companies benefit from capacity and brand expansion overseas, with performance expected to turn around first in 2024. In the film segment, after sustained pressure for 2-3 years, the market share of leading companies is expected to further increase, the supply and demand structure is clear, while cash flow pressure continues to increase for second and third-tier companies, with a turnaround expected in 2025.

Beneficiary Analysis

Core Growth: Leading companies in the main industry chain are crossing the cycle and growing continuously, such as Jinko Solar (688223.SH), LONGi Green Energy (601012.SH), JA Solar (002459.SZ), Tongwei Solar (688599.SH), TCL Central Environmental (002129.SZ), and Tongwei Co., Ltd. (600438.SH), etc.

New Growth: Continuous technological iteration brings new growth with new technologies and markets, such as Attes, heterojunction, XBC, perovskite industry chain, etc.

Supporting Sectors: Emphasis on the inverter segment, which is the first to turn around, Sungrow Power Supply (300274.SZ), Develo Energy (605117.SH), etc.; supporting sectors with good supply and demand structure such as brackets, glass, film, Foster (603806.SH), Folate (601865.SH), etc.

Risk Warning: Technological upgrades fall short of expectations, the growth rate of new photovoltaic installations falls short of expectations, and industry competition intensifies