Securities Companies Report: EVA May Become One Of The Most Urgent Links In The Photovoltaic Industry Chain, And The Price Is Expected To Reach A New High Within The Year

On August 10, the photovoltaic industry chain continued to be strong. In addition to the hot TOPCON concept, PV EVA concept stocks also saw a big rise. As of the closing, Lushan new material (603051. SH) was trading, Dongfang Shenghong (000301. SZ), Lianhong Xinke (003022. SZ), Rongsheng Petrochemical (002493. SZ) rose by more than 5%. Since April 27, Lianhong Xinke and Dongfang Shenghong, the two leading companies of PV EVA concept, have doubled, with cumulative increases of 240% and 120% respectively. According to the recent research report of Guojin securities, with the release of 22q4 silicon material's new production capacity, it is expected that PV EVA resin will continue to be in short supply. Next year, it may become one of the most urgent links in the photovoltaic industry chain, and the high prosperity is expected to last for 2-3 years. We recommend Lianhong Xinke, a leading domestic company, and pay attention to Dongfang Shenghong.

Photovoltaic EVA is an indispensable part of photovoltaic modules, which accounts for about 8% of the cost of photovoltaic modules. Photovoltaic film is mainly used for module packaging, which can play a protective role on the cell. Because photovoltaic modules work in the open air all year round, the photovoltaic adhesive film needs to have good corrosion resistance in a variety of environments. Its heat resistance, low temperature resistance, oxidation resistance and ultraviolet aging resistance have a very important impact on the quality of the modules. In addition, the packaging process of photovoltaic cells is irreversible, so the operation life of battery modules is usually required to be more than 25 years. Once the adhesive film and back plate of the battery module begin to turn yellow and crack, the battery is easy to fail and scrap. Therefore, although the proportion of film materials such as adhesive film in the total cost of photovoltaic modules is not high, it is the key factor to determine the quality and life of photovoltaic modules.

Driven by photovoltaic demand, the price of EVA increased in this year. In May, the price of volt and cable material rose to 29000-31000 yuan / ton, reaching a historical high. In July, due to the off-season of downstream cable material and foaming material, the operating rate of photovoltaic film factory was affected by the shortage of silicon material at module end, and the price of EVA slightly fell back. At present, the domestic market price of PV grade EVA particles is about 28500 yuan / ton. With the release of new capacity of 22q4 silicon material, the demand for components increases, and the fields of cable and foam gradually enter the peak season, it is expected that EVA price will reach a new high in the year.

From the demand side, in recent years, the demand for photovoltaic EVA resin in China has increased rapidly, accounting for 37% in 2021, which is the largest consumption area. Under the joint effect of parity, epidemic situation, dual carbon and other factors, Guojin Securities believes that the demand for photovoltaic installed capacity will continue to increase. Under the neutral scenario, the global new installed capacity is expected to be 230 / 330 / 420 GW in 2022-2024, and CArG will reach 35.2%. Driven by this, it is estimated that the demand for PV EVA resin will reach 122 / 162 / 2.01 million tons in 2022-2024, and CArG will be 34%.

In the first half of the year, the output of domestic PV modules was about 1.235 million tons, which was about 1.23 million tons of domestic PV modules. Looking forward to the future, only Xinjiang Tianli hi tech, Gulei petrochemical and Baofeng energy will add 750000 tons of EVA devices before 2024. Considering the stability of the new capacity and the uncertainty of mass production of photovoltaic EVA, it is expected that the supply of photovoltaic EVA will continue to be in short supply from 2023 to 2024. Under the conservative situation, it is estimated that the supply of photovoltaic EVA resin will be 136g153g1870000 tons in 2022-2024, and there will be a supply gap of 9 / 140000 tons in 2023-2024.

In fact, it takes a certain period for PV EVA to expand its production capacity. The production of EVA resin uses ultra-high pressure process, which is complex in process and difficult in equipment maintenance. Among them, photovoltaic EVA resin has the characteristics of high VA content, low crystal point and high melt index, so the production is the most difficult. As the core equipment needs to be ordered from overseas, the expansion period of EVA device is relatively long. Considering the civil construction (2 years), product commissioning (0.5-1 years) and PV grade product climbing (0.5-1 years), it takes 3-3.5 years from the project start-up to continuous and stable mass production of PV grade EVA.

In addition, EVA is located in the middle and lower reaches of the chemical industry chain, and the direct raw materials are ethylene and vinyl acetate. With the rapid expansion of EVA production capacity, the demand for vinyl acetate by ethylene process has increased significantly. However, the capacity expansion of vinyl acetate by ethylene process has not been effectively expanded in recent five years, and the contradiction between supply and demand has become increasingly prominent.

Guojin Securities pointed out that under the background of the high growth of downstream photovoltaic demand, the supply of photovoltaic EVA resin will continue to be tight from 2023 to 2024. Considering the rapid growth of the remaining links of the photovoltaic industry chain, it is expected that it will become one of the most urgent links in the industrial chain from 2023, and the high prosperity is expected to last for 2-3 years. At present, EVA film accounts for less than 10% of downstream components. According to the bank's calculation, every 10000 yuan increase in the tax inclusive price of EVA resin will affect the cost of components by about 0.04 yuan / W. With the gradual release of silicon production capacity and the rapid growth of downstream photovoltaic demand, it is expected that the price of photovoltaic EVA resin still has upward space.

The supply chain management capability of EVA film enterprises will become the core competitiveness, which may weaken the price pressure caused by nominal overcapacity. Historically, since the main cost of adhesive film is eva particles, since the second half of 2020, as the price of EVA particles continues to rise, the price of EVA film is also rising, and the adhesive film enterprises have a strong ability to transfer costs. Moreover, with the high price of EVA film, the gross profit rate and net profit rate of EVA enterprises are still high, and the average profit is guaranteed. Guojin securities recommends Lianhong Xinke, a leading domestic company, and pays attention to Dongfang Shenghong.

　　 Related concept stocks ：

Dongfang Shenghong (000301. SZ): at present, it is the largest producer of EVA for photovoltaic materials in China. Its subsidiary, selbon, has a production capacity of 300000 tons of EVA, with a long-term capacity utilization rate of more than 100%. Among them, 200000 tons can be used to produce photovoltaic materials, which is the absolute leader in both the overall EVA market and the photovoltaic material market.

Lianhong Xinke (003022. SZ): the company mainly distributes advanced polymer materials and special materials, occupying 7.8% market share in domestic EVA market. The actual output of EVA of the company will reach more than 150000 tons / year, and the output and proportion of photovoltaic adhesive film material will be greatly increased.

Rongsheng Petrochemical (002493. SZ): the company recently replied on the interactive platform that its photovoltaic EVA products have been directly supplied to domestic mainstream manufacturers. After the completion of EVA expansion plan, it is expected to become the largest enterprise with EVA production capacity.