On October 24, the CPC Central Committee and The State Council issued ""double carbon"" work opinions, which proposed to speed up the optimization of building energy structure and carry out rooftop photovoltaic action; On October 20, the National Energy Administration issued a notice requiring the power grid enterprises to have grid-connected conditions of wind power, photovoltaic power generation projects to take effective measures to ensure timely grid connection.

In fact, before the release of these two documents, the National Development and Reform Commission has issued three articles, proposed to strengthen the overall scheduling of resources, to promote hydropower, nuclear power, wind power, photovoltaic and other clean energy power generation.

Industry insiders believe that in this series of policies driven by the east wind, the photovoltaic industry will usher in a period of rapid development, the industrial chain of ethylene — Vinyl acetate copolymer (EVA) photovoltaic materials, EVA film demand will surge, the relevant listed companies will continue to benefit.

Since the beginning of this year, the global energy problem has become increasingly prominent, and the domestic power rationing and energy consumption ""double control"" are strictly implemented, and the electricity shortage situation is still severe. Therefore, wind power, photovoltaic power generation to obtain more policy tilt, in order to alleviate the short-term power supply pressure and long-term implementation of the ""double carbon"" goal.

In fact, 2021 can be described as a big year for photovoltaic demand in China. National Energy Administration data show that from January to September, China's new photovoltaic installed capacity of 25.56GW. Some institutions are expected that by 2025, China's new installed capacity is expected to reach 110GW, with a compound annual growth rate of more than 20%.

It is worth noting that the total installed capacity of household photovoltaic projects newly included in the state financial subsidies has increased significantly this year, and the total installed capacity from January to September is 11.68GW, an increase of 121% year-on-year, which has exceeded the scale of 10.12GW in 2020, and shows a continuous growth trend on a monthly basis.

And from a global point of view, according to the forecast of China Photovoltaic Industry Association, the size of the global photovoltaic market in 2021 will still accelerate the expansion, the new installed capacity is expected to reach 150~170GW, and the new 270~330GW in 2025.

Zhongtai Securities pointed out that the potential demand of the photovoltaic industry is very high, and the current industrial chain is in the expansion stage whether it is unit profit or total profit.

Especially EVA industry chain, the rapid development of photovoltaic industry will drive the surge in demand for EVA photovoltaic materials. In 2020, China's EVA PV material consumption is about 630,000 tons, and it is expected that the new demand will be about 1.76 million tons by 2025.

And from the supply side, EVA photovoltaic material production barriers are high, the expansion cycle is long, the transfer of production restrictions, China has EVA photovoltaic material mass production capacity of the manufacturers only Sierbang, Lianhong Xinke and Ningbo Formosa Plastics 3, the cumulative capacity of less than 400,000 tons/year. Among them, Sierbang has 300,000 tons/year EVA production capacity, PV material production capacity of 200,000 tons/year, ranking first in China.

But relative to the demand of 630,000 tons, China's EVA PV material supply and demand gap is obvious.

In the context of supply shortage, China's EVA PV material prices are also rising. According to market monitoring, the recent price of China's EVA photovoltaic materials rose to 31,000 ~ 32,000 yuan, up 138%~146% from the highest price of 13,000 yuan in 2019.

With the surging demand for EVA material and the sharp rise in price, the performance of listed companies with EVA material and EVA film production capacity is also very bright this year, and their stock prices have hit a record high.

Since the beginning of this year, the market value of Oriental Shenghong, which acquired China's largest EVA producer Sierbang, has approached 200 billion yuan, repeatedly reaching new highs, and the share price of Lianhong Xinke has also risen 520%.

On October 28, Oriental Shenghong released a performance report showing that the operating income of the company in the first three quarters was 25.077 billion yuan, an increase of 60.28%. Net profit of 1.431 billion yuan, up 506.65% year on year.

It is understood that at the beginning of July this year, Oriental Shenghong announced that it planned to acquire 100% of the petrochemical assets of Sierbang under the real controller Miao Hangen at a price of 14.36 billion yuan by issuing shares and paying cash. A few days ago, the company issued shares and paid cash to buy assets and raise matching funds and related transactions have been accepted by the China Securities Regulatory Commission. Through the acquisition of Sierbang, Oriental Shenghong will officially enter the new energy and new materials track.

Under the background of expected tight supply and demand in the future, the EVA industry will still maintain a high prosperity. Industry insiders believe that after the completion of the acquisition, Oriental Shenghong will benefit from the bright prospects of EVA photovoltaic materials, and its profitability is expected to be significantly improved. Therefore, a number of institutions are also optimistic about the company's development prospects.

It is understood that a total of 16 institutions have given ratings in the last 90 days of Oriental Shenghong, 14 buy ratings and 2 overweight ratings.