[Value Catalog]: Research Report Center with Views
Overview: Photovoltaic adhesive film is one of the key packaging materials that affect the performance and life of battery modules. Photovoltaic adhesive film is a key encapsulation material for module production, which plays a role in protecting and increasing the efficiency of cells. Based on the level of November**, the adhesive film in the p-type 182mm single-sided module accounts for about 8% of the module cost, and the unit cost is about 006 yuan w.
Supply and demand: Double-sided and n-type penetration will promote the upgrading of demand structure, and the competition for rapid expansion of the industry may intensify.
The demand for plastic film is transformed and upgraded to POE, and it is estimated that the demand for photovoltaic film will be about 28% CAGR from 2022 to 2025. POE adhesive film has natural advantages in long-term anti-PID, water resistance, corrosion resistance, etc., and is more suitable for P-type bifacial modules and N-type module packaging than EVA adhesive films. With the increase of bifaciality and the penetration of N-type modules, the demand for adhesive film is expected to transform and upgrade to POE adhesive film. Assuming that the global installed photovoltaic demand in 2023-2025 is 375 430 500GW, it is expected that the demand for adhesive film will reach 5.9 billion square meters in 2025, with a CAGR of about 28% in 2022-2025Among them, the demand for POE adhesive film is expected to be 3.1-3.8 billion square meters, with a CAGR of about 62-74%. 
The film industry has a high degree of concentration, and the pattern of one super and many strong is relatively stable.
In recent years, the global market share of the first-echelon enterprise Foster is about 45%-50%, the global market share of the second-echelon enterprises Sveck and Haiyou New Materials is about 10%-20%, and the industry CR3 exceeds 70%. The production capacity of various adhesive film enterprises is expanding rapidly, and we expect that the nominal production capacity of the adhesive film industry will reach about 70-7.5 billion square meters in 2023. The intensification of competition in the industry is expected to further test the ability of various film companies in terms of cost control, particle supply, financial strength, cash management, etc., and the leading enterprises are expected to maintain their market share. 
Profitability: The industry's profitability is expected to rise from the bottom, and the n-type era leader is expected to maintain its advantage.
The profitability of adhesive film enterprises is significantly differentiated, the product has declined significantly, and the profitability of the industry is at a historical low. In 2022, the gross profit of Foster and Xiangbang Technology's film business will reach respectively. 26 yuan flat, while Haiyou New Materials, Cybrid Technology, Lushan New Materials and other enterprises have a single flat gross profit of about 1 yuan. Due to the downward trend of upstream particles, and the fierce competition in the module sector to reduce the price of auxiliary materials, the current profitability of the film is still at a low level.
The profitability of leading enterprises is leading, and the n-type era is expected to continue to lead.
We believe that the relative profitability of leading enterprises is based on the scale advantage and the optimization of product structure brought about by the iteration of new technologies, and financial strength is also an indispensable factor to ensure their long-term development. The industry is in the N-type iteration window period, the head film enterprises have strong R&D strength, fast new product iteration speed, and can be introduced to customers faster to achieve shipments, and the n-type era is expected to continue to lead. 
The proportion of POE class has increased, the inventory has been digested, and the profitability of adhesive film enterprises is expected to rebound at the bottom.
At present, POE adhesive film still has a premium compared with EVA adhesive film, and the proportion of POE is increasing, which is expected to help improve the profitability of adhesive film enterprisesOn the other hand, EVA particles** have fallen rapidly, and industry profitability is expected to be repaired at the bottom after bottoming out and stabilizing. According to estimates, under the condition that the adhesive film remains unchanged, EVA particles will drop by 1,000 yuan tons, and the unit profit can be increased by about 035-0.4 yuan flat.
Particles: The localization of EVA and POE particles is accelerating, and the supply tension is expected to gradually ease.
EVA PV material supply and demand eased. In 2022, China's new EVA production capacity will total 3780,000 tons per year, the 300,000-ton Gulei Refining & Chemical project has been put into operation in May 2023, and the 250,000-ton project of Baofeng Energy is expected to produce products in January 2024. According to estimates, the demand for photovoltaic EVA particles in 2023 is expected to reach about 1.57-1.62 million tons, and the total supply of domestic EVA photovoltaic materials (including imports) in 2023 is expected to reach about 1.7 million tons.
PoE particles are expected to remain in tight equilibrium.
As of June 2023, China's total planned production capacity of POE particles exceeds 3 million tons per year, of which the companies that have completed the POE pilot test include Wanhua Chemical, Satellite Petrochemical, Tianjin Petrochemical, Chambroad Petrochemical, Maoming Petrochemical, etc., and the domestic production capacity is expected to be completed and put into operation in 2024 and enter the production capacity release period. According to estimates, the demand for photovoltaic poE particles is expected to reach about 36-400,000 tons in 2023According to Aibang Elastomer Network, in 2023, the PoE photovoltaic material from foreign countries to China is expected to be 37-380,000 tons, and it is expected that the PoE photovoltaic material will still be in a tight balance in 2023. 
Investment logic
The demand for photovoltaic film has grown steadily, and the decline of upstream particles and the optimization of product structure are superimposed, and the profitability of the industry is expected to rebound at the bottom. The leading enterprises have obvious scale advantages, strong capital and R&D strength, and are expected to maintain their leading profit advantages and continue to lead the n-type era.
The continuous growth of photovoltaic installed capacity and module production scale has driven the demand for photovoltaic adhesive films. It is estimated that the demand for photovoltaic film will reach 59 in 2025100 million square meters, CAGR of about 28% in 2022-2025. The permeability of POE adhesive film has increased and the inventory has been digested, and the profit is expected to rebound at the bottom. With the increase of bifaciality rate and N-type penetration, the demand for POE adhesive films will be released rapidly, and the optimization of product structure is expected to improve the profitability of the industry. On the other hand, the upstream particles have fallen back to a historically low level, and the downward space is expected to be limited. 
In the context of overall loose supply, leading enterprises have strong comprehensive strength and are expected to continue to lead the n-type era. From the supply side, the rapid expansion of industry production capacity and intensified competition are expected to further test the ability of various film enterprises in terms of cost control, particle supply, financial strength, cash management, etc., and backward production capacity is expected to be cleared one after another.
Investment Advice:Photovoltaic film industryProfitability is at the bottom of the cycle, with the upstream particles falling back and stabilizing, inventory impairment pressure decreasing, superimposed POE film penetration rate increasing, industry profitability is expected to usher in a repair. It is recommended to pay attention to the industry leaders Foster and Haiyou New Materials, which have obvious advantages in scale and cost, and stable volume and profit.
This is an abridged excerpt from the report, the original PDF of the report
In-depth research report on basic chemical industry-photovoltaic adhesive film industry: N-type penetration promotes the upgrading of demand structure, and the leading edge of the bottom of profitability is highlighted-Huachuang**-20231222[Page 41]".
Report**: Value Catalog