[agency Review] the outbreak of energy storage further clarifies the focus of the new energy market or returns to the leading position.

New energy: the micro fundamentals of photovoltaic remain strong, and the falling prices of large products provide room for price increases in the main industrial chain; the deterministic outbreak of the domestic power generation side energy storage market in 2022, the inverter / system integration leading synergy effect / project performance advantage is expected to be fully reflected; it is expected that the plate market center of gravity will gradually return to the white horse leader.

With the gradual start of the peak installation season of domestic terminal power stations (the strong rigidity of domestic demand that we have repeatedly stressed is beginning to be realized), from bidding to production scheduling, the prices of the industrial chain continue to rise across the board this week. Although the price increases of some of these links are partly driven by the rising cost of raw materials, such as glass and plastic film, the glass link is still releasing new production capacity on the supply side. The decline in inventory levels for several consecutive weeks still fully validates the significant rebound in component start-up. At the same time, we have noticed that recently, the bid opening / winning price of large-scale assembly has also increased significantly, and the winning price of large-size double glass components has generally been higher than 1.8 yuan / W, which reflects that under the background of the high price decline of steel, copper and other bulk raw materials (corresponding to the decline in the cost of power station support and cable), the tolerance of power station investors to component prices has increased, and the component factory is in the case of rising costs. The price transmission is relatively smooth, and the profitability of the whole industry chain is well guaranteed in the second half of the year.

This week, the Inner Mongolia Energy Bureau issued a notice on matters related to the development and construction of wind power and photovoltaic power in 2021, proposing to arrange the scale of 10GW indemnificatory grid connection (including 6.2GW of wind power and photovoltaic 3.8GW). At the same time, it is clearly required to be equipped with electrochemical energy storage devices of not less than 15% (2 hours) of the installed capacity of the project, and that the planned projects should be connected to the grid by the end of 2022.

In the comments on the policy of encouraging distribution and storage on the generation side in early August, "the generation side is the sea of energy storage", we have already mentioned that in addition to the "market-oriented grid connection" project that requires the allocation of energy storage devices with a capacity of 15-20% x 4 hours in accordance with national policies, in the competitive configuration scheme formulated by various local governments for the allocation of indicators of "indemnificatory grid connection" in 2021, the requirements for energy storage have almost become standard. However, some areas are "required" (such as Inner Mongolia, Gansu, Anhui, etc.), while some areas are "allocated energy storage points" (such as Hebei, etc.). Therefore, we believe that the outbreak of the domestic new energy power side energy storage market in 2022 is almost a high probability event. Based on the assumption that the domestic installed 100GW is above 2022, even if calculated according to the more conservative average capacity of 10% x2 hours, the demand for new energy storage configuration on the generation side alone is more than 20GWh.It is expected to increase by more than three times compared with all new domestic energy storage units in 2021. Driven by the first launch of the overseas power generation side energy storage market, the related income of energy storage leaders such as Ningde and Sunshine has shown a trend of rapid growth in the first half of the year. The energy storage related business income of the two companies has increased by 727% and 267% respectively in 2021H1, and the gross profit margin is generally higher than that of other comparable businesses within the company (Ningde energy storage gross profit margin is significantly higher than that of power cells, solar energy storage system gross profit margin is significantly higher than photovoltaic system integration).

We reiterate several important conclusions on energy storage sector investment at the current time: 1) the power generation side is the most important market for energy storage; 2) the customer resource advantages of inverters and system integration leaders for large surface power stations are expected to be brought into full play; 3) the historical performance and project experience of energy storage project development and construction are very important barriers to competition; 4) the performance flexibility of energy storage business growth to the leading industry with large market capitalization may exceed the current conservative expectations of the market.

The market center of gravity of the new energy sector in recent weeks has a significant trend of spreading to the second, third and even fourth or fifth lines, while the stock price of White Horse in all links generally lags behind the sector. we expect that as the uncertainty of the semi-annual report is gradually released, under the background that the fundamentals of the industry remain strong and the sentiment of the plate remains high, the short-term market main line may gradually return to the leader with a stable industry position and more certainty of growth. That is, switch from "heavy odds" to "double probability".

New energy vehicles: Changan Automobile released 2025 strategic planning, electric / intelligent spring tide superimposed short-term industry lack of core, independent brands in the right time and accelerate the rise. (see the back page for the text)? Fuel cell: Beijing, Tianjin, Hebei and Shanghai have become the first group of demonstration cities, and the fuel cell subsidy period of the 14th five-year Plan has been officially launched.

Risk hint: the price competition in the industrial chain is fiercer than expected, and the global epidemic situation worsens more than expected.