event

The third-party organization of photovoltaic glass industry Zhuo Chuang Information announced on the official website on November 21, the major enterprises in the industry plan to increase the reference price of 3.2mm photovoltaic glass in December to 29 yuan / square meter, an increase of 3.6% over the current average price of 28 yuan / square meter, This is the third time the price has been raised during the year, and the price of the 3.2mm coated film has returned to the level before the 531 policy and the level of April 2018. Based on channel feedback, we believe that this time is the general price increase in the photovoltaic glass industry, showing the overall recovery of PV downstream demand, we commented as follows:

Comment

The supply increase is limited, and the industry competition pattern is good to support the price increase. According to the statistics of Zhuo Chuang Information, since the fourth quarter, the photovoltaic glass industry only has a 500-ton/day production line of Xinyi Solar Energy, and the ignition production has been resumed after the cold repair is completed. The nominal production capacity has only increased by 2%. If the line is officially shipped in mid-November, the actual industry output will grow by less than 1% from the third quarter. We believe that the supply elasticity is low, superimposing the domestic bidding in the fourth quarter, the grid-connected target of the parity project and the overseas demand for the downstream demand, so that the photovoltaic glass industry has the best supply and demand pattern in the photovoltaic sector, so that it can be Click to raise the price.

The rising price of photovoltaic glass reflects the recovery of PV demand, and the market pessimistic expectations may be alleviated. Previously, due to the continued lower-than-expected domestic monthly installed capacity and the decline in prices of some products, the market's demand for 4Q20 and 2020 is expected to continue to decrease. We believe that from the historically obvious 7 PV glass price adjustments, PV glass prices have a leading indicator for downstream demand performance:

PV glass prices have risen and downstream demand has recovered. In the monthly installation data release after the PV glass price increase, it will show the recovery of PV downstream installed demand (10-30 days in advance).

Photovoltaic glass prices have fallen, and downstream demand has shrunk. In the monthly installation data release after the PV glass price is lowered, it shows that the demand for PV downstream installed capacity has shrunk (20-30 days ahead).

Therefore, after the PV glass industry generally raises the price, we expect the domestic PV installed capacity and PV module export data to be recovered in November in mid-December (the domestic installed capacity is only about 1 GW in October and the export is only 4.5 GW). The market's pessimistic expectations for PV demand will gradually ease.

Based on the above, we reiterate the logic of the second half of the photovoltaic industry: domestic demand began to recover in the fourth quarter, and the remaining projects in 2019 will also support the year-on-year high growth of domestic demand in 2020; overseas demand will be further developed after the price of this round of components declines. Considering that both the fourth quarter and the first quarter are traditional peak seasons, especially in January, there is a strong demand for production before the Spring Festival. We believe that after the recent decline in PV stock prices, leading companies have provided buying points and reiterated that “the price of products does not fall or even rise. "The sector and the company: Follett glass A / H, big new energy - US; at the same time optimistic about the market expected reversal, Longji shares - A and Central shares - A.

Risk

Overseas PV demand is less than expected