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European solar market "return" good domestic photovoltaic leader

The resumption of free trade in the European solar market will benefit China's local photovoltaic capacity. The industry generally believes that in the past, "MIP" limited the competitiveness of China's local production capacity, with the realization of free trade, China's local photovoltaic production capacity exports to Europe will grow. The intensity of domestic subsidies for the photovoltaic industry has also begun to gradually decrease. On May 31 this year, the three national ministries and commissions jointly issued the "Notice on Matters Related to Photovoltaic Power Generation in 2018" (the industry called the "New Deal for 531"), which clearly pointed out that the construction scale of ordinary photovoltaic power stations in 2018 will not be arranged for the time being, and only 10 million kilowatts will be arranged. The construction scale of distributed photovoltaic power generation will further reduce the subsidy intensity of photovoltaic power generation. For the "531 New Deal", the photovoltaic industry vividly called it "weaning" off guard ". Under the new situation of strictly controlling the scale and lowering the electricity price, the photovoltaic industry has rapidly entered the cold winter period. We believe that in the past few years, China's photovoltaic industry was in a period of brutal expansion. Because the new energy policy continued to become the focus of market capital speculation at that time, a large number of companies began to expand production capacity disorderly or engage in photovoltaic products across industries, resulting in a certain degree. Inefficient and fierce market competition. This also forced the state to start the photovoltaic industry by raising industry standards to reduce the scope of subsidies and other ways to carry out supply-side reform. From an industry perspective, since 2018, the prosperity of the photovoltaic industry has also shown a significant downward trend, especially after the introduction of the New Deal in May, the industry-wide photovoltaic net profit index has declined significantly. The EU's termination of the "double reverse" is expected to enhance the certainty of overseas demand, and the performance of photovoltaic enterprises with overseas layout will increase, bringing a certain boost to the domestic photovoltaic industry chain, which is in the "severe winter" of the policy. Pacific Securities believes that with the termination of the EU MIP, it will benefit domestic exports in the long run. On the whole, the decline in demand in markets such as China has brought a greater impact on demand. This year's photovoltaic market competition will be unprecedentedly fierce. The industry is currently in a relatively sluggish state. However, due to the acceleration of the parity time node, the industry is expected to be at the end of the year or next year. The beginning of the year ushered in an inflection point. Long-term bullish on the company's profit margin and market share after the shuffle. Recommended to pay attention to the target: Longji shares (601012.SH), Tongwei shares (600438.SH), solar power (300274.SZ), Zhengtai Electric (601877.SH).





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