Distributed photovoltaic safety standards improve micro-reverse market to meet the opportunity of rapid expansion [institutional review]

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Market review: in December 2021, the power equipment and new energy sector (CI005011.WI) fell 6.83%, while the CSI 300 index rose 2.24% over the same period.

Industry trend observation: on January 4, five ministries jointly issued a circular on the Action Plan for Innovation and Development of Intelligent Photovoltaic Industry (2021-2025). The Plan requires that by 2025, the level of intelligence of the photovoltaic industry will be significantly improved, breakthroughs have been made in industrial technological innovation, the conversion efficiency of new high-efficiency solar cells has been significantly improved, and the construction of intelligent photovoltaic industry ecosystem has been basically completed. The level of integration with the new generation of information technology has been gradually deepened. Combined with the November notice on strengthening the Safety of distributed Photovoltaic Power Generation, we believe that the above policies will promote distributed photovoltaic intelligence, lead to higher safety standards, and increase the permeability of micro inverters, thus promoting the rapid expansion of the micro inverse market and optimistic about the rapid development of the micro inverter market. The market size of micro-inverter is about 11.43 billion yuan in 2020. if the new photovoltaic installed capacity reaches 300GW in 2025, we estimate that the market size of micro-inverter in 2025 will be 28.35 billion, and the compound growth rate of the industry will reach 20% in five years.

Important industry policies: four ministries jointly issued the subsidy standard for new energy vehicles in 2022; the National Energy Administration issued the Statistical Management measures for the consumption Monitoring of Photovoltaic Power stations; and the new renewable energy and raw material energy will no longer be included in the total energy consumption control.

Monthly industry events: photovoltaic leading company Longji and Sinopec will join hands to build 147 distributed photovoltaic gas stations; Central shares will cut silicon prices twice in December; land wind power operation and maintenance (Olympian M) price index hit an all-time low.

Monthly important announcement: Daquan Energy, Tianneng heavy Industry, Huayou Cobalt, Xinwangda, Jingyun Express, Oriental Risheng, Jinlei shares, Zhongwei shares, Special Electric, China Science Electric, Xinwanda and other proposed investment construction and production projects; Guoxuan, a wholly-owned foreign-owned subsidiary of Guoxuan Hi-Tech, signed an agreement with an American car company to supply no less than 200GWh lithium iron phosphate batteries in 2023-2028, and the two sides also plan to set up a joint venture in the United States. Enjie shares and Ningde Times locked in a wet diaphragm order of 5.2 billion yuan next year, while Zhongwei shares and Xiamen Xiangyu plan to achieve cooperation in the supply of nickel and cobalt raw materials of about 80,000 tons of nickel and 15000 tons of cobalt between 2022 and 2027.

Investment strategy: looking forward to the future, we continue to be optimistic about the development prospects of new energy vehicle markets in China and Europe, as well as the promotion of long-term cost reduction and efficiency by the industrialization of wind power and photovoltaic technologies. Suggested attention: sun and Moon shares, Sunshine Power supply, Mingyang Intelligence, Anxian Zhidian.

Risk tips: the global spread of the COVID-19 epidemic and its impact or deviation from expectations; the main business of the relevant listed companies may be lower than expected.