Photovoltaic inverter industry: domestic companies accelerate overseas penetration, performance is expected to continue to increase

Domestic companies are accelerating their overseas deployment, and the international market penetration rate is expected to continue to increase: In recent years, domestic inverter companies have worked hard to expand overseas channels and accelerate overseas deployment. Among them, the demand for string inverters is mainly concentrated in the United States, Europe, Australia and other countries and regions. These countries have a high tolerance for inverter prices, and the product gross profit margin is about 20pcts higher than the domestic gross profit margin. It can be seen that because the product quality is basically equivalent to that of overseas companies and the labor and manufacturing costs are lower than those of overseas companies, domestic inverter companies have obvious competitive advantages. In recent years, the proportion of overseas shipments of domestic companies has increased. The market share of converter companies is declining. According to CPIA data, the scale of domestic inverter exports in 2019 was 52.3GW, a year-on-year increase of 177%. The market share in mainstream markets such as Europe, India, Latin America, the United States, and Japan were 77%, 61%, 58%, 34% and 23%, the subsequent penetration rate is expected to continue to increase, and the profitability of the product is also expected to further improve as the proportion of overseas market revenue continues to increase.

The inverter industry has entered the era of high growth in replacement of inventory

The service life of electronic components such as IGBT inside the inverter is generally about 10-15 years. In 2010, the global PV installed capacity reached

17.5GW, reaching a scale of more than 10GW for the first time. Among them, Europe, where the photovoltaic market started earlier (2009), has shown a rising trend in inverter replacement demand in recent years. The domestic photovoltaic installed capacity has reached the GW level since 2011, and the newly installed capacity in 2013 exceeded 10GW (10.9GW).

Therefore, the replacement of inverter inventory is expected to enter the era of high growth starting in 2020. According to the forecast of IHS Markit, the global inverter replacement demand will reach 8.7GW in 2020, a year-on-year increase of 40%; considering that the global new photovoltaic installations increase year by year after 2010, we believe that the future inverter inventory replacement demand is expected to continue to increase .

Demand for energy storage inverters is expected to continue to increase

With the increasing popularity of new photovoltaic energy, the volatility characteristics of photovoltaic power generation and the consideration of enterprise peak and frequency modulation costs, more and more photovoltaic power generation will be equipped with energy storage equipment in the future, and photovoltaic energy storage inverters will become an important development in the industry One of the directions. In recent years, governments of various countries have successively introduced relevant support policies for the energy storage industry. The scale of investment in the energy storage market has continued to increase, the industrial chain layout has been continuously improved, the business model has become increasingly diversified, and the application scenarios have accelerated. The IHS Markit report shows that the global energy storage reverse in 2018 The converter shipment volume has reached 3GW. Looking ahead, assuming that the global installed capacity of photovoltaics reaches 250GW in 2025 and the energy storage allocation rate reaches 10%, the annual demand for energy storage inverters is expected to reach about 25GW, and the demand for energy storage inverters is expected to maintain a high growth state.

Investment strategy: As domestic inverter companies accelerate their overseas deployment to seize market share, inverter inventory replacement has entered an era of high growth, and the development of the energy storage market drives high demand for energy storage inverters, we believe that the future performance of inverter companies is expected With continued high growth, we focus on recommending Sungrow Power, the global leader in inverters, and Jinlang Technology and Goodway, high-quality string inverter companies.

Risk warning: demand for photovoltaic installed capacity is less than expected, inverter prices have fallen unexpectedly, changes in overseas trade policies, etc.