Shenwan Hongyuan Group: Inverter exports achieve double growth month-on-month, with increasing demand in emerging markets imminent.

Shenwan Hongyuan Group released a research report stating that based on the overall data for August, inverter exports achieved double-digit growth both month-on-month and year-on-year for the first time this year, indicating a turning point in exports. Overseas market demand continues to recover, with inverter exports showing continuous improvement month-on-month. Looking at different regions, Zhejiang's inverter export data for August showed strong performance. As holidays in Europe come to an end, market demand is accelerating, coupled with rapid development in emerging markets, it is expected that there will be further breakthroughs in Q4. In emerging countries in Asia and Africa, combined with policy support and the rise of the PV industry in recent years, the market is expected to further expand; the profit models in the European and American markets are diverse, and with the stimulus of interest rate cuts, inverter exports are expected to achieve further breakthroughs. In August, inverter exports reached 5.2876 million units, an increase of 31.74% year-on-year and 0.87% month-on-month. The export value was 6.157 billion yuan, an increase of 24.22% year-on-year and 9.98% month-on-month; from January to August, exports totaled 35.7027 million units, a decrease of 3.30% year-on-year, with an export value of 40.193 billion yuan, a decrease of 23.75% year-on-year. In August, inverter exports achieved double-digit growth year-on-year and month-on-month, mainly due to the gradual end of holidays in Europe, demand recovery, as well as continuous growth in the Middle East, Latin America, and Africa markets, promoting inverter exports. Inverter exports in various regions are accelerating in recovery month-on-month, with strong performance in Zhejiang Province. By 2024, the number of inverter exports in various regions is accelerating in recovery, with Zhejiang Province/Guangdong Province/Jiangsu Province/Anhui Province exporting 2.6545 million/1.5832 million/0.3165 million/0.772 million units respectively, an increase of +53.02%/+5.32%/+37.36%/-22.58% year-on-year, and an increase of +13.17%/-18.04%/-0.90%/+52.99% month-on-month. In terms of export value, Zhejiang Province/Guangdong Province/Jiangsu Province/Anhui Province exported 1.894 billion/2.089 billion/0.627 billion/1.02 billion yuan respectively, an increase of +165.14%/+4.19%/+14.85%/-9.35% year-on-year, and an increase of +18.76%/-5.51%/+23.24%/+55.78% month-on-month. Export data for all provinces are gradually recovering, with significant improvements in Zhejiang Province's export data in August. As European holidays gradually come to an end, market demand is accelerating. With the end of holidays in Europe in the third quarter, industries are gradually resuming work, and the demand for inverters is also gradually recovering. In August 2024, the number of inverters exported to Europe reached 1.1572 million units, with an export value of 2.736 billion yuan, a decrease of 0.62% year-on-year and an increase of 23.81% month-on-month. In Europe, countries such as the Netherlands, Germany, and Poland have strong demand for inverters, with export values of 1.192 billion/0.605 billion/0.155 billion yuan respectively. The Netherlands ranks high in both export quantity and value due to Rotterdam port being the largest port in Europe and a major transshipment hub. Emerging countries are gradually introducing relevant policy support, and the market is expected to further expand. Since 2024, emerging countries have become a new growth point for the inverter industry due to their abundant renewable energy resources and huge market demand. India and Pakistan have performed well. In August 2024, the export value of inverters to India reached 3.26 billion yuan, an increase of 149.12% year-on-year and a decrease of 39.49% month-on-month; the export value of inverters to Pakistan reached 3.26 billion yuan, an increase of 429.04% year-on-year and a decrease of 9.86% month-on-month. Countries like India and Pakistan have introduced relevant policies to promote PV installations. The Indian government released the National Electricity Plan in 2023, expecting cumulative PV installations to reach 186GW by 2026-2028 out of a total of 338GW renewable energy installation. According to the Pakistan National Power Regulatory Authority's plan, it is expected to reach 12.8GW and 26.9GW of PV installations by 2030 and 2048, respectively. Investment points: It is recommended to pay attention to leading companies in the inverter industry such as Sungrow Power Supply (300274.SZ), Sineng Electric (300827.SZ), Ningbo Deye Technology (605117.SH), Ginlong Technologies (300763.SZ), Jiangsu Goodwe Power Supply Technology Co., Ltd. (688390.SH), and SolaX Power Network Technology (300984.SZ). Risk warning: Inverter and energy storage demand falls short of expectations; intensified industry competition; risks of international trade frictions, etc.