Huachuang Securities: Significant increase in battery component production in March, new price increase for photovoltaic glass successfully implemented.

Huachuang Securities released a research report, stating that according to InfoLink statistics, battery production in March reached 57-58GW, a month-on-month increase of 22%; operating rate was 64%, a month-on-month increase of 12%. Post-holiday demand activation combined with rush-to-install demand has significantly increased battery production, with a relative shortage of G12R battery supply. This week, 3.2mm coated photovoltaic glass was priced at 22-22.5 yuan/m2, a month-on-month increase of about 3.0 yuan/; 2.0mm coated photovoltaic glass panels were priced at 13.5-14.0 yuan/m2, a month-on-month increase of 1.5-2.0 yuan/. With the release of rush-to-install demand, glass companies have actively pushed for price increases, and major companies are expected to return to the break-even line at this price level. Key points from Huachuang Securities: Post-holiday demand activation combined with rush-to-install demand will lead to a 20% increase in module production in March (1) Silicon Materials: According to InfoLink statistics, silicon material production in March was 105-110,000 tons (equivalent to 50-51GW), up 7% month-on-month; operating rate was 42%, up 3%. With more days in March compared to February, silicon material companies' operating rates remained stable, with most manufacturers not having significant production increase plans. (2) Silicon Wafers: According to InfoLink statistics, silicon wafer production in March was 49-50GW, an increase of 3% month-on-month; operating rate was 52%, up 2%. With an improvement in downstream demand, manufacturers are turning to producing larger RN wafers, increasing output, and production in March showed a slight increase trend. (3) Battery Cells: According to InfoLink statistics, battery cell production in March was 57-58GW, a 22% month-on-month increase; operating rate was 64%, up 12%. Post-holiday demand activation combined with rush-to-install demand has led to a significant increase in battery production, and G12R battery cell supply is relatively tight. In the Southeast Asia region, the production capacity of four countries may face significant challenges, and overall, there is still a need to wait and see the outcome of future tax rates; non-four countries' battery production capacity has a higher operating rate. (4) Modules: According to InfoLink statistics, module production in March was approximately 52GW, a 24% month-on-month increase; operating rate was 47%, up 9%. Influenced by domestic policies, there is a surge in rush-to-install activities during the policy window period, especially in distributed markets where there is a noticeable increase in orders in March and April. New pricing for photovoltaic glass in March is expected to drive profit recovery in the industry According to Sublime China Information, as of Thursday this week, the industry inventory days were about 33.83 days, a decrease of 3.3 days compared to last week, down 9.0% month-on-month. This week, 3.2mm coated photovoltaic glass was priced at 22-22.5 yuan/m2, a month-on-month increase of about 3.0 yuan/; 2.0mm coated photovoltaic glass panels were priced at 13.5-14.0 yuan/m2, a month-on-month increase of 1.5-2.0 yuan/. With the release of rush-to-install demand, glass companies have actively pushed for price increases, and major companies are expected to return to the break-even line at this price level. Although there are some ignition plans in March, considering the ramp-up of kilns takes 2-3 months to form actual supply, short-term impact is limited, and the actual implementation under loss-making conditions still needs to be observed. Calculated based on the current production capacity of 88,000 tons of daily melting capacity, assuming full release of kiln capacity, monthly supply would be approximately 48-49GW. If production in April remains above 50GW+, there is good price support and potential for price increases. Prices in the photovoltaic industry chain: (1) Main Materials: According to InfoLink Consulting, this week, the average price of polycrystalline silicon dense material/granular material was 40.0/38.0 yuan/kg, an increase of 2.6%/2.7% from last week. The average price of 182-183.75mm monocrystalline P-type silicon wafers was 1.15 yuan/piece, unchanged from last week; the average price of 182-183.75mm/182*210mm /210mm monocrystalline N-type silicon wafers was 1.18/1.35/1.55 yuan/piece, unchanged/+3.8%/unchanged from last week. The average price of 182-183.75mm monocrystalline PERC solar cells was 0.320 yuan/W, a decrease of 3.0% from last week. The price of 182-183.75mm/182*210mm/210mm TOPCon solar cells was 0.290/0.290/0.295 yuan/W, unchanged/+1.8%/unchanged from last week. The price of 182*182-210mm/210mm dual-glass PERC modules was 0.65/0.70 yuan/W, unchanged/+1.4% from last week. This week, the price of 182-183.75mm TOPCon dual-glass modules was 0.70 yuan/W, an increase of 1.4% from last week; the price of 210mm HJT dual-glass modules was 0.85 yuan/W, unchanged from last week. (2) Auxiliary Materials: This week, the price of 3.2mm coated photovoltaic glass was 22.25 yuan/m2, an increase of 15.6% from last week; the price of 2.0mm coated photovoltaic glass panels was 13.75 yuan/m2, an increase of 14.6% from last week. According to Sobe Consulting, this week, the price of transparent EVA film was 5.95 yuan/m2, an increase of 1.0% from last week; the price of white EVA film was 6.47 yuan/m2, an increase of 0.8% from last week; the price of POE film was 8.31 yuan/m2, an increase of 0.4% from last week. Investment recommendations: With improving supply and demand and expectations for policy adjustments, key players in silicon materials, integrated modules, and auxiliary materials are expected to see improved profitability. It is recommended to pay attention to: silicon materials sector - Tongwei Co., Ltd (600438.SH), GCL TECH (03800), Xinjiang Daqo New Energy (688303.SH); integrated modules - Longi Green Energy Technology Co., Ltd (601012.SH), Jinko Solar (688223.SH), JA Solar Technology (002459.SZ), Trina Solar Co., Ltd. (688599.SH), CSI Solar Co., Lt.d. (688472.SH); leading supplier of auxiliary materials, including Hangzhou First Applied Material (603806.SH), Flat Glass Group (601865.SH), XINYI SOLAR (00968) and others.2) The layout of new technologies is leading, and there is the potential for coordinated growth in the future. It is recommended to pay attention to: - Mass production related companies such as Longi Green Energy Technology Co., Ltd. (601012.SH), Shanghai Aiko Solar Energy Co., Ltd. (600732.SH), Wuhan DR Laser Technology Corp., Ltd. (300776.SZ), Suzhou YourBest New-type Materials Co., Ltd. (301266.SZ), Jiangsu Kuangshun Photosensitivity New-Material Stock Co., Ltd. (300537.SZ), etc. - Silver-reduced/silver-free paste technology companies such as Changzhou Fusion New Material Co., Ltd. (688503.SH), Wuxi Dk Electronic Materials Co., Ltd. (300842.SZ). 3) Benefiting from the explosive demand in emerging markets and the deployment of inverters and support structures in high-profit regions. It is recommended to pay attention to: - Inverter-related companies such as Ningbo Deye Technology Co., Ltd. (605117.SH), Sungrow Power Supply Co., Ltd. (300274.SZ), SolaX Power Network Technology Co., Ltd. (688717.SH), Sineng Electric Co., Ltd. (300827.SZ). - Support structure-related companies such as Arctech Solar Holding Co., Ltd. (688408.SH), Wenzhou Yihua Connector Co., Ltd. (002897.SZ). Risk warning: - End demand falling short of expectations, intensified market competition, fluctuation in upstream raw material prices, trade friction factors, changes in industry policies, etc.