SINOLINK SECURITIES(SH:600109) Zhi Tong Cai Jing·2025-09-01 06:53Core Viewpoint - The photovoltaic industry is experiencing increased demand driven by installation rush, but profitability is under pressure due to low prices across the supply chain [1][2]. Industry Summary - In the first half of 2025, the domestic newly installed capacity reached 212.21 GW, a year-on-year increase of 107%, while battery component exports totaled 163.3 GW, up 4% year-on-year [2]. - The second quarter of 2025 saw new installations of 152 GW, a significant increase of 168% year-on-year, with battery component exports at 85.6 GW, reflecting a 5% year-on-year and 10% quarter-on-quarter increase [2]. - Despite high demand, the overall price level in the industry remains low, leading to a decline in profitability, with the SW photovoltaic equipment sector reporting revenues of 262.8 billion yuan, down 13% year-on-year, and a net profit loss of 10.4 billion yuan, a 43% decrease year-on-year [2]. Profitability Analysis - The silicon material segment continues to face profitability challenges due to low multi-crystalline silicon prices and increased depreciation costs from reduced operating rates [3]. - Integrated components have seen slight improvements in profitability due to the installation rush, while companies with differentiated products and overseas capacities are showing stronger profit advantages [3]. - The gross margins for auxiliary materials such as brackets and inverters remain high, while leading companies in photovoltaic glass and film maintain solid advantages [3]. Operational Capability - The turnover rates of fixed assets across various segments have significantly decreased compared to the high points of 2022-2023, with slight declines in net operating cycles [3]. - Auxiliary materials are experiencing increased pressure on working capital turnover [3]. Asset Structure and Debt Servicing - Some main chain enterprises are still under pressure regarding debt ratios, with interest-bearing liabilities peaking in Q2, indicating a potential acceleration in market-driven clearing [3]. Cash Flow and Capital Expenditure - Main chain enterprises are enhancing cash management, with operating cash flow improving year-on-year, while financing cash flow remains negative and capital expenditures have significantly slowed [3]. Investment Recommendations - The photovoltaic sector is currently seen as suitable for bottom-fishing strategies, particularly for companies with solid operational foundations, stable financial conditions, and capabilities to extend into electronics, robotics, and AI computing [4]. - Focus should be on leading companies in photovoltaic glass, low-cost silicon materials, high-efficiency batteries/components, and robust financial reporting in the wire saw segment [4].