Longi(SH:601012) Zhong Guo Jing Ying Bao·2025-09-26 13:45Core Viewpoint - The photovoltaic industry is facing severe "involution" issues, leading to irrational price competition and widespread losses among companies due to supply-demand imbalances [1][2]. Group 1: Industry Challenges - The root cause of "involution" is the supply-demand imbalance, exacerbated by aggressive expansion from some companies and blind project approvals by local governments since 2020 [1][2]. - The global production capacity for photovoltaic materials is projected to reach 324.9 million tons for polysilicon, 1394.9 GW for silicon wafers, 1426.7 GW for battery cells, and 1388.9 GW for modules by 2024, while new installations are expected to be only 530 GW [1]. - The industry is experiencing a wave of losses, with some companies reporting losses since Q4 2023, leading to an industry-wide loss situation [2]. Group 2: Government and Industry Response - The "anti-involution" actions began in the second half of 2024, with government departments and industry associations organizing discussions to promote self-discipline, production cuts, and price controls [2][3]. - The Ministry of Industry and Information Technology is emphasizing the need for standards to drive the exit of outdated production capacity, with new energy consumption standards being proposed for polysilicon and photovoltaic components [3][4]. Group 3: Standards and Quality Improvement - The implementation of new energy consumption standards is expected to significantly improve the supply-demand dynamics in the polysilicon market [4]. - The approach of using standards to guide the industry is seen as more effective than administrative interventions, promoting a healthier market environment [5]. Group 4: Technological Innovation and Market Strategy - In a market characterized by widespread losses, companies must shift from low-price competition to value competition through technological innovation and the development of differentiated products [6]. - Companies like Longi Green Energy are focusing on technological breakthroughs and increasing R&D investments to transition from a manufacturing hub to an innovation hub [6][7]. - The industry is witnessing a shift towards technology licensing and cross-licensing, which is expected to create a more orderly market competition [7]. - Companies are also adapting to international trade barriers by establishing overseas production and local partnerships, aiming for a win-win situation [7]. Group 5: Future Outlook - Companies like JinkoSolar are enhancing their product offerings to achieve sales premiums, with expectations that 40%-50% of existing capacity will upgrade to mainstream power levels of 640W or higher by the end of 2025 [7]. - Longi Green Energy and Aiko Solar are focusing on differentiated competition through BC technology, with significant growth in their respective product shipments [7].