Changjiang Securities·2025-06-08 09:59Investment Rating - The report maintains a "Positive" investment rating for the photovoltaic industry [15]. Core Insights - The report emphasizes the importance of the photovoltaic sector due to a dual bottom in both market sentiment and fundamentals, suggesting that policy changes or new technologies could accelerate supply clearing, with the end of 2025 being a critical observation point [3][10]. - It recommends gradual investment in the sector, particularly in silicon materials and battery components, as stock prices are expected to lead the fundamentals [13]. Summary by Sections Why Focus on Photovoltaics? - Dual Bottom in Sentiment and Fundamentals - The photovoltaic sector is currently experiencing low institutional holdings, with the proportion of heavy positions in A-shares dropping to 1.83% in Q1 2025, a significant decline of 0.59 percentage points [10][20]. - The entire supply chain is near cash loss, with the current situation being more severe than historical lows in industries like steel and coal [10][29]. What Scenarios Could Accelerate Supply Clearing? - Policy Relief or Technological Iteration - Historical cycles show that policy interventions have effectively stimulated demand during downturns. The current cycle may similarly require supply-side policies to address the oversupply situation [11][46]. - Technological advancements, particularly in battery efficiency, could lead to a differentiation in production quality, benefiting leading firms while forcing less competitive ones to exit the market [11][12]. When Will Supply Clear? - Key Observations for 2025 - The report identifies mid-year and year-end as critical observation points for policy direction and market conditions, with expectations of clearer domestic and international demand by mid-2025 [12][13]. When to Invest? - Preferred Segments - The report suggests focusing on silicon materials and battery components, especially if strong policies are introduced. Recommended companies include Tongwei Co., Daqo New Energy, and GCL-Poly Energy [13][20]. - In the absence of strong policies, investment should shift towards new technology segments, with specific recommendations for companies like LONGi Green Energy and JA Solar Technology [13][41].