Longi(SH:601012) Zhong Guo Jing Ying Bao·2025-10-13 12:21Core Insights - The photovoltaic industry is facing severe "involution" issues, characterized by irrational price competition leading to widespread losses among companies [2][3] - The Ministry of Industry and Information Technology emphasizes the need for industry governance to prevent non-rational competition from destroying enterprises and the industry [2] - Efforts to combat "involution" have begun to show results, but challenges remain in clearing excess capacity and improving supply-demand relationships [2][3] Industry Challenges - Supply-demand imbalance is the root cause of "involution," exacerbated by aggressive expansion from some companies and blind project approvals by local governments since 2020 [2][3] - The global production capacity for photovoltaic materials is projected to reach 324.9 million tons of polysilicon, 1394.9 GW of silicon wafers, 1426.7 GW of battery cells, and 1388.9 GW of modules by 2024, while new installations are expected to be only 530 GW [2][3] - The industry is experiencing a significant decline in product prices, leading to losses across the entire supply chain since Q4 2023 [3] Regulatory Measures - "Anti-involution" actions have been initiated in the second half of 2024, focusing on industry self-discipline, production cuts, and preventing sales below cost [3][4] - The Ministry of Industry and Information Technology is promoting standards to facilitate the exit of outdated production capacity and improve industry quality [4][5] - New mandatory energy consumption standards for polysilicon and photovoltaic components are being proposed to drive industry upgrades [4][5] Technological Innovation - The industry must shift from low-end price competition to value competition through technological innovation and high-quality, differentiated products [6][7] - Companies are encouraged to increase R&D investments and focus on original technological breakthroughs to transition from a manufacturing hub to an innovation hub [6][7] - The market is expected to see more orderly competition through technology licensing and cross-licensing agreements, addressing issues of intellectual property awareness [7] Market Dynamics - Companies like Longi Green Energy and JinkoSolar are focusing on differentiated competition through advanced technologies, with Longi's BC component shipments reaching 20% of its total and JinkoSolar planning significant upgrades to its production capacity by 2025 [6][7]