Is there still an opportunity for photovoltaic investment?

2023-09-01 15:47

For photovoltaic, securities firms are firmly bullish, and I will share the core logic with everyone

1) From a policy perspective, electricity marketization does not hinder the development of new energy; In the short term, new energy does not need to participate in marketization. In the medium term, as industry costs decrease, the cost advantage of photovoltaic over traditional electricity will gradually be reflected, and the market-oriented model is more conducive to photovoltaic substitution;

2) From a short-term perspective, after the project preparation period of the third quarter, domestic bidding projects in the fourth quarter will enter the construction cycle, supporting the continuous upward trend of the industry from Q4 to Q1 2019;

3) From the perspective of mid-term development trends, the logic of industry growth is clear, and there is room for demand to exceed expectations in 2020. Since Q3, the decline in component prices has exceeded 10%, stimulating the growth of overseas demand in 2020. Domestic electricity marketization reform may lead to a surge in affordable projects installed in 2020;

4) In terms of valuation, the current sector valuation is still at a low level, with major leading enterprises only accounting for about 15 times the PE in 2020;

5) The undervalued value establishes the safety margin of the sector, even though the price adjustment of the industry chain was affected by supply shocks in 2020, due to the undervalued value+market expectations, it is expected that the overall adjustment of the sector will be limited. Referring to Q3 2016, the price of the industrial chain has decreased by about 30%, but the stock price adjustment is only 10% -15%; If demand remains stable in 2020, with slight adjustments in industry chain prices, and stock prices expected to remain relatively stable, and if demand exceeds expectations in 2020, the sector is expected to experience an investment market similar to the second half of 2017.

In summary, we continue to be optimistic about investment opportunities in the photovoltaic sector, with key targets including leading enterprises such as Longji Group, Tongwei Group, Jingsheng Electromechanical, Dongfang Risheng, and Foster.