PV policy shifts to wind power recovery

At the beginning of December 2018, Yang Dong, who had been redeemed at 6,000 points on the Shanghai Stock Exchange, shouted again. It indicated that the position of the Shanghai Stock Exchange at 2600 points should be at the bottom, and also put forward a clear view: the world will usher in A new energy revolution represented by photovoltaics, electric vehicles and energy storage.

"We believe that the trend of this round of new energy revolution has become quite clear, even we are already in it, only because it is still in its infancy, the current feeling is not really real, and even many people do not feel it." Yang Dong said, "we I believe that the big opportunity brought by the big trend, the success of investment lies in grasping the trend of social and economic development, so we will closely focus on this main line." In terms of the above three sectors, he said that the photovoltaic industry is more clear. The valuation is also attractive, and its products have been more laid out.

In 2018, the downward pressure on the economy led to a decline in car sales, but new energy vehicles went up against the trend. From January to October 2018, sales of new energy vehicles reached 850,000 vehicles, a year-on-year increase of 75%. The proportion of total car sales also increased from 2.65% in 2017 to 3.72%.

China Merchants Securities Yujiaxun said that the profitability of the new energy vehicle midstream is approaching the bottom. Domestic new-energy vehicles with high cost performance are increasing. There may be policy-driven increases in rental and network-related vehicles. It is expected that demand trends will continue. However, the profitability of the raw materials and battery materials sectors is still on the decline. We expect the industry profitability to bottom out in the middle of 2019.

Guoxin Securities’s Fang Zhongyi believes that the new energy vehicles – the industry on the road to parity – will deepen. The industry's medium and long-term demand is strong, and the “Long-term Development Plan for the Automotive Industry” guarantees that the industry's annual sales growth will exceed 40% in the next two years. We believe that the concentration of the industrial chain will be further enhanced by the combination of the rapid growth of downstream and the pressure of capital reduction brought about by the retreat. It is recommended to focus on the lithium battery segment with enhanced domestic market premium capacity and the benefit of overseas supply chain.