The beginning of 2024 can be described as a period of concentrated pain for A-share investors, A-shares across the board, the photovoltaic sector has become a hard-hit area, only 2 days before the Spring Festival holiday, there are not a few investors who have lost millions due to heavy positions in photovoltaic stocks.
After the New Year, the A-share market is about to open, will the photovoltaic sector continue the previous trend?
Huaxia Energy Network noted that wind data showed that from the beginning of this year to February 6, the photovoltaic index fell by nearly 20%. However, many industry insiders believe that with the rapid advancement of industrial iteration, the value of the photovoltaic sector needs to be revalued urgently. Where will PV stock prices go in the new year? Is it still worth investing in?
The stock price that was dragged down by the performance
In the past year or so, the photovoltaic sector has ended the rapid growth of the previous three years, and it is in a downward channel.
Wind data shows that in August 2022, the PV index reached 5,048a high of 15, which has been in a ** trend ever since; On February 5 this year, the PV index fell to a low of 176063。Since then, the index has rebounded slightly, and as of February 9, the index has slipped to 205510, a drop of nearly 60% compared to a year and a half ago.
In addition to the impact of the overall decline, the poor performance of photovoltaic companies is also considered to be the main reason for affecting investor confidence.
Since the beginning of the year, nearly 60 photovoltaic companies have released performance forecasts, and the performance is clearly differentiated, and nearly half of them have seen a decline in profits.
This is especially true for wafer companies. According to the announcement of TCL Zhonghuan (SZ:002129), a leading silicon wafer company, the company expects to achieve a net profit attributable to the owners of the parent company of 4.2 billion yuan to 4.8 billion yuan, a year-on-year decrease of 2960% to 3840%；Jingyuntong (SH: 601908) announced that the company is expected to achieve a net profit of 1 in 20236.5 billion to 23.7 billion yuan, a year-on-year decrease of 4400% to 6100%；Hongyuan Green Energy (SH:603185) announced that it is expected to achieve a net profit of 7 in 20233 billion to 80 billion yuan, a decrease of 73 over the same period of the previous year62% to 7593%。
Most of the companies with declining performance said that the gross profit was affected due to the decline in product **, which made the company's profitability lower than that of the same period. TCL Zhonghuan also pointed out that "in the fourth quarter, the main products **fast** to the irrational range, the profitability of the company's main business was under pressure". TCL Zhonghuan lost about 13 percent in the fourth quarter$8.8 billion to $198.8 billion yuan, the largest amount of the expected loss has been nearly one-third of the net profit in the first three quarters.
In 2023, the fluctuation of the industrial chain** will have a significant impact on the overall performance. The increasingly fierce battle in the industry became more intense in the fourth quarter.
Not only silicon wafers, but also product profit margins in all links of the photovoltaic industry chain have been squeezed. For example, Aiko Co., Ltd. (SH:600732), a leading BC battery company, has a net profit attributable to the parent company of about 18 in the first three quarters of 20238.7 billion yuan, but due to the performance loss in the fourth quarter, the performance of the whole year was dragged down, and the net profit attributable to the parent company for the whole year is expected to be only 735-7.7.5 billion yuan, a year-on-year decrease of 6671%-68.43%。
Overcapacity and first-class war factors have made the photovoltaic industry enter the "cold winter" has become the consensus of the industry, and behind the sluggish stock price, it reflects the lack of confidence in the capital market in the photovoltaic industry. Combined with the factors of poor performance of leading enterprises, the downward trend of the photovoltaic sector has not changed.
The rapid rise of the stock price has aroused the concerns of leading companies and set off a wave of repurchases.
On January 30, TCL Zhonghuan repurchased about 5 million shares of the company for the first time, and the total amount paid was 6,25580,000 yuan. On the same day, Zhong Baoshen, chairman of LONGi Green Energy (SH:601012), increased his holdings of the company's shares by 300,000 shares, with an increase of 61410,000 yuan. On the evening of January 31, Tongwei Co., Ltd. (600438) also announced that it intends to increase its holdings of the company's shares by no less than 1 billion yuan and no more than 2 billion yuan.
Will the bailouts work? What will happen to the PV sector**? Keep your eyes on the new year.
Potential** is in the "dormant period".
In the case of large-scale losses of photovoltaic enterprises, there are still more than half of the enterprises that have achieved good annual results. Specifically, there are still several types of enterprise development prospects worthy of attention.
The first is businesses that benefit from the technology iteration cycle. A number of industry experts have said that the overcapacity of the photovoltaic industry is only the excess of "backward capacity", and "advanced capacity" will always be in short supply. In the process of the transformation of photovoltaic cell technology from p-type to n-type, n-type capacity is the representative of "advanced capacity".
A typical player benefiting from the n-type market is JinkoSolar (SH:688223). Last year, JinkoSolar's N-type TOPCon module production capacity and output increased significantly, helping JinkoSolar regain its No. 1 position in module shipments. JinkoSolar expects to achieve net profit attributable to the parent company in 2023 of 72500 million yuan-79500 million yuan, an increase of 146 percent year-on-year92%-170.76%。
Similarly, another leading company, Trina Solar (SH:688599), which also benefited from the increase in the proportion of n-type module sales, is optimistic about its full-year results, and expects to achieve an annual net profit attributable to the parent company of 52 in 2023700 million yuan-58200 million yuan, an increase of 43 percent year-on-year27%-58.36%。
The second is auxiliary materials and equipment manufacturing enterprises. With the surge in photovoltaic manufacturing capacity and the increase in downstream installed capacity in 2023, the demand for auxiliary materials and equipment will expand, and the performance of related enterprises will benefit.
Sungrow Power Supply (SZ:300274), whose business is distributed in inverters, energy storage, power station system integration and other fields, is expected to increase its net profit attributable to the parent company by 159%-187% year-on-year in 2023; Quartz sand manufacturer Quartz Co., Ltd. (SH: 603688) is expected to increase its net profit attributable to the parent company by 351 year-on-year in 202344%-406.56%；Gaoce Co., Ltd. (SH: 688556), which is mainly engaged in diamond wire business, is expected to increase its net profit attributable to the parent company by 82% year-on-year in 20236%-87.67%；Photovoltaic equipment manufacturer Jingsheng Electromechanical (SZ:300316) is expected to increase its net profit attributable to the parent company by 50%-70% year-on-year in 2023.
The above-mentioned enterprises that have maintained growth, such as quartz, Gaocei, Jingsheng, etc., are all "champion" enterprises in the field of industrial chain segmentation, and have maintained performance growth in the overall downturn.
As the iteration of photovoltaic technology continues in 2024, it is expected that there is still room for expansion in the demand for auxiliary materials and equipment manufacturing.
Thirdly, first-tier companies with strong competitive advantages are more likely to pass through the cycle of sluggish stock prices. On the one hand, due to the brand effect, the products of first-tier enterprises have more room for premium. An industry insider told Huaxia Energy Network that the market will give 003-0.04 yuan w premium space. On the other hand, first-tier enterprises with a vertically integrated layout can achieve a lower overall cost and resist the risk of profit squeeze.
However, some investors believe that it is difficult to reproduce the highlight moment of photovoltaic stocks. Since 2023, the P/E ratio (P/E) level of the PV sector has been at a historically low level.
Wind data shows that the current price-to-earnings ratio of Wind PV Index is 117, while in 2022 the P/E ratio is 217, 49 in 202169。Compared with ** and other sectors, the P/E ratio of the photovoltaic sector is also at a low level. Currently, the price-to-earnings ratio of the new energy vehicle segment is 180, the price-to-earnings ratio of the Shanghai Composite Index is 123。
Note: The change in the price-earnings ratio of LONGi Green Energy in the past five years.
Compared with the industry average, many leading companies have a price-to-earnings ratio of less than 10. According to the data before the market closed during the Spring Festival in the Year of the Dragon, among the four major polysilicon companies, Tongwei shares in the A** market have a price-to-earnings ratio of 58；TBEA 52；Daqo Energy 66；Among the two male silicon wafers, TCL Zhonghuan is 61；LONGi Green Energy, once known as "photovoltaic mao", is only 98, compared to the previous two years (2021 and 2022). 3. Greatly reduced; Among the leading cell companies, Aiko shares, which is second only to Tongwei in terms of shipments, have a price-to-earnings ratio of 91。In addition to LONGi Green Energy, the rest of the four module giants are JinkoSolar 109；JA Solar 65；Trina Solar 82。
The leading P/E ratio is also at a low point. Taking Tongwei shares as an example, the last time its price-to-earnings ratio fell to around 10 was in 2018, and it has been above 20 for most of the time since then. Until the beginning of 2022, the price-to-earnings ratio continued to decline, falling to 4 on January 8 this year19。
An investor focusing on the energy industry said to Huaxia Energy Network, "the consequence of the industry's desperate expansion of production capacity is that the profitability of leading enterprises cannot be sustained, and finally the market will gradually return to the valuation logic of the manufacturing industry (for some energy companies), and the valuation is not too high; According to the general logic, if the company's revenue or profit growth can be maintained at a high level, say, 50% or higher, the price-to-earnings ratio cannot be only given 10 times. In the end, the core is the growth ability of the enterprise. ”
The person also said that one of the reasons for the limited growth of the new energy sector is that the industry is still in the stage of "stock game".
Revaluation under long-term trends
At the heart of secondary market investing is the expectation of the future. For the photovoltaic manufacturing industry, there is structural and phased overcapacity in the short term, but in the long run, the industry still has huge growth potential.
First, there is still a lot of room for growth in photovoltaic installations.
In 2023, with the decline of photovoltaic products**, the installed capacity of photovoltaic will be stimulated. According to the 2023 national power industry statistics released by the National Energy Administration, as of the end of December 2023, the installed capacity of solar power generation was about 610GW, officially surpassing hydropower and becoming the second largest form of power source in the country. In addition, the year-on-year growth rate of new photovoltaic installed capacity in 2023 will be as high as 552% in increments of 21688GW, which is significantly more than the historical record.
In 2024, PV installed capacity is expected to continue to maintain a rapid growth trend. In terms of centralization, the first batch of PV base projects have entered the peak period of production, bringing an increase in PV installed capacity in 2023; With the construction of the second and third batches of large-scale wind power photovoltaic bases, the demand for centralized photovoltaic will continue to grow rapidly. In terms of distribution, photovoltaic modules are still hovering at a low level, and modules are declining, which is equivalent to a decrease in the cost of photovoltaic power stations and an increase in the income of photovoltaic power stations, which will directly stimulate the demand for distributed photovoltaic installations, and in the future, the distributed market space will further stimulate the production and manufacturing demand of the industrial chain.
A few days ago, Shen Hui, director of the Yangtze River Delta Solar Photovoltaic Technology Innovation Center, told Huaxia Energy Network, "In 2022, solar photovoltaic power generation will account for less than 5% of global power generation, but in the future, we will aim to reach 10% or even 20%, and we will become the main energy source." To achieve such a goal, we can't keep up with the increase in production capacity. ”
Second, there have been signs of stabilization in photovoltaic products recently.
The performance expectations of new energy upstream enterprises are low, which is closely related to the highest quality. 2023 is a year for polysilicon. In February 2023, polysilicon** exceeded 230,000 tons. Since then, polysilicon has been falling to about 60,000 tons at its lowest point. In 2024, polysilicon will continue to be at a low level of 60,000-70,000 tons.
However, before the Spring Festival, polysilicon seems to be stabilizing and rebounding. According to data disclosed by Infolink Consulting, polysilicon rose for four consecutive weeks before the Chinese New Year, and the average transaction price of mono-Si dense polysilicon was 6.0% in the last week before the Chinese New Year80,000 tons, 30%, and the average transaction price of polysilicon granules was 610,000 tons, 17%。
Industry analysts believe that the photovoltaic industry chain products have touched or broken through the cost line, this situation will not last long, after the industry completes the reshuffle, the first will return to a reasonable range.
Li Xiande, chairman of JinkoSolar, said in a recent interview, "In the second to third quarters, modules will be adjusted to a reasonable profit range. ”
On the evening of the 17th, Li Zhenguo, founder of LONGi Green Energy, also said when he was a guest on CCTV's "Dialogue, New Year's Talk" program that compared with 2023 in 2024, the survival of photovoltaic enterprises will face phased difficulties, but the industry development cycle has bottomed out. "2024 shouldn't be worse, because ** has fallen to this level, and many companies are already losing cash. In the process, strong businesses can get through this phase. However, some enterprises with relatively high debt ratios and relatively uncharacteristic technology are likely to not survive this stage. Li Zhenguo said.
Under the influence of multiple factors such as the continuous expansion of downstream demand and the stabilization of products, the downward trend of the photovoltaic manufacturing sector is not expected to last long.
As a leading analyst said to Huaxia Energy Network, "In the past, the photovoltaic industry made great progress, and only then did it have the latest."
A year or two of short-term turbulence, but that's not enough for us to underestimate the trends for the next decade. The more the market is in a downturn, the more you should calmly analyze and look for opportunities. ”
*Please indicate the source, article**: Huaxia Energy Network, **hxny3060).