Ping An Securities: The year-on-year increase in inverter exports in October was obvious, and the Latin American market grew strongly

The Zhitong Finance App learned that Ping An Securities released a research report saying that according to data from the General Administration of Customs, in October 2024, China's inverter export value was 4.7 billion yuan, +17%/-4% month-on-month respectively, a slight decrease from month to month, but the year-on-year increase was significant. In October, the amount of inverters exported by China to Europe/Asia/Latin America was 18.8/14.0/ 610 billion yuan respectively, -10%/-20%/+57% month-on-month respectively. The Eurasian market showed weak month-on-month performance and strong growth in the Latin American market. Furthermore, a new Brazilian law is currently under review. The bill will allow workers to use the balance of the “Employment Period Guarantee Fund” to purchase photovoltaic systems. If the law is passed successfully, it is expected to strongly promote the growth in demand for inverters.

Ping An Securities's main views are as follows:

The export value of inverters increased year-on-year in October and declined slightly month-on-month

According to data from the General Administration of Customs, in October 2024, China's inverter export value was 4.7 billion yuan, +17%/-4% month-on-month respectively, a slight decrease from month to month, but the year-on-year increase was significant. From January to October, China's inverter exports totaled 49.7 billion yuan, a year-on-year decrease of 19%. From January to October 2024, Europe, Asia, and Latin America were the top three markets for China's inverter exports, accounting for 41%/33%/13% of the export value, respectively. In October, the amount of inverters exported by China to Europe/Asia/Latin America was 18.8/14.0/ 610 million yuan respectively, -10%/-20%/+57% month-on-month respectively. The Eurasian market showed weak month-on-month performance, and the Latin American market grew strongly.

Asia: Demand from India is picking up, and the Middle East is booming

From January to October 2024, China's inverter exports to the Asian market were worth 16.5 billion yuan, up 35% year on year; in October, export value was 1.4 billion yuan, -4%/-20% month-on-month respectively. In January-October, India and Pakistan in South Asia, as well as Saudi Arabia and the United Arab Emirates in the Middle East, were the top four regions where China exported inverters to Asia (excluding Hong Kong, China). The total export value accounted for 49% of China's exports to Asia in January-October. Looking at the export value in a single month, India's environment increased in October, Pakistan's environment declined, and Saudi Arabia fluctuated greatly from month to month.

In October, China exported 240 million yuan of inverters to India (+34% month-on-month), and it is estimated that shipments resumed after the rainy season; the amount of inverters exported to Pakistan was 110 million yuan (-42% month-on-month), probably due to the announcement by the Pakistani authorities at the end of September that they would control electricity prices, leading to wait-and-see sentiment. The amount of inverters exported to Saudi Arabia was 200 million yuan (+306% month-on-month), which fluctuated greatly from month to month, mainly because Saudi Arabia mainly installed large machines, and shipments were uneven.

European market: The German market fell slightly month-on-month, and demand from Ukraine is strong

From January to October 2024, China exported 20.3 billion yuan of inverters to Europe, a year-on-year decrease of 44%; of these, the export value in October was 1.88 billion yuan, +18%/-10% year-on-month. The amount of inverters exported by China to Germany in October was 290 million yuan, -24%/-10% month-on-month respectively. After a high increase in August, it declined continuously from September to October. The month-on-month increase in export value in August was mainly driven by rising prices; although the average price in September and October fell from August, it was still higher than the previous month, which may mean that the product structure has changed and the share of energy storage products has increased.

In July-October, the amount of inverters exported by China to Ukraine increased significantly year-on-year, and demand remained strong. In October, China exported 50 million yuan of inverters to Ukraine, +181%/-18% month-on-month; the number of units exported was 20,000 units (-60% month-on-month), and the average price of a single unit was 2,525 yuan (+105% month-on-month). The average price of single inverters exported increased significantly, probably due to an increase in the share of energy storage in the product structure.

Latin American and African markets: October saw a month-on-month improvement

From January to October 2024, China exported 6.33 billion yuan of inverters to Latin America, an increase of 32% over the previous year. In October, China exported 610 million yuan of inverters to Latin America, +58%/+57% compared with the same period last year. In October, China exported 340 million yuan of inverters to Brazil, +49%/+79% month-on-month respectively. With the arrival of spring, the export amount increased significantly, and exports are expected to continue to grow month-on-month in October-November. In October, a new Brazilian bill was under review. The bill will allow workers to use the balance of the “Employment Period Guarantee Fund” to purchase photovoltaic systems. If the bill passes successfully, it is expected to greatly promote the growth in demand for inverters.

From January to October 2024, China exported 3.06 billion yuan of inverters to Africa, a year-on-year decrease of 32%. In October, China exported 330 million yuan worth of inverters to Africa, +69%/+8% compared with the same period last year. In October, due to seasonal factors, the export value of South Africa's inverters all picked up month-on-month; Nigeria's export value declined month-on-month, but still showed year-on-year growth.

Investment advice: Export demand is volatile in the short term. Emerging markets perform better than traditional markets, and recommend leading inverters in various circuit segments.

Recommended targets: Sunshine Power (300274.SZ), which has taken the lead in the overseas storage process and has won big orders from the Middle East and Europe; Deye Shares (605117.SH), which is deeply involved in emerging markets for household storage and has strong strength. It is recommended to focus on: Shangneng Electric (300827.SZ), which lays out emerging markets and is progressing smoothly; Hemai Co., Ltd. (688032.SH), a domestic slight reversal leader with promising results in Europe and Latin America.

Risk warning: the risk of demand growth in various markets falling short of expectations, the risk of increased competition in the global market, and the risk of tightening market restriction policies.