Core Viewpoint - The report from CITIC Securities emphasizes that driving price recovery in the photovoltaic (PV) industry is an effective measure and an important first step towards achieving "anti-involution" in the sector [1][6] Price Recovery and Market Dynamics - A reasonable recovery in the industry chain prices is seen as a key method for "anti-involution" and a prerequisite for supply-side reform [2] - The current "anti-involution" initiative aims to address low-price disorderly competition among companies, with market regulation being a direct demand and supply-side reform as a medium to long-term goal [2] - Recent price increases in silicon materials have reached approximately 45,000 yuan per ton, marking a 25% increase, while N-type materials have seen a 6%-7% rise in average transaction prices [2][3] Impact on Supply Chain and Competition - The price increases are expected to have a cascading effect down the supply chain, with N-type silicon wafer prices rising by 8%-12% due to upstream silicon material price adjustments [2] - The differentiation in pricing among manufacturers is anticipated, with lower-cost producers gaining market advantages while higher-cost firms may face inventory buildup and financial strain [3] Challenges and Future Outlook - Despite the immediate effects of price recovery, achieving the exit of outdated production capacity and restructuring the supply side will not be a quick process [4] - The industry is currently experiencing a slowdown in demand growth, particularly after a recent surge in installations, which may limit the tolerance for price increases in the supply chain [4] - A substantial improvement in market supply-demand relationships is necessary for further price recovery in the industry chain [4] Investment Strategy - The report suggests focusing on leading companies within the PV main industry chain that possess long-term competitiveness and the potential for price and volume recovery as the industry undergoes capacity reduction [6]

Investment Rating - The industry investment rating is "Positive" [4] Core Viewpoints - The necessity for supply-side reform in the photovoltaic industry is highlighted due to ongoing profitability pressures, with over 150 companies expected to face bankruptcy or liquidation by mid-2025 [2] - The industry has experienced significant price declines since Q4 2023, leading to widespread losses among major companies, with a notable shift towards a cash-negative state by Q1 2025 [2][11] - The demand for photovoltaic products is expected to rebound in the medium to long term as energy storage economics improve, particularly after the implementation of the "136 Document" [3][20] Summary by Sections Event Description - Major polysilicon manufacturers raised prices to 37 CNY/kg as of July 7, 2025, with full costs estimated above 39-40 CNY/kg [1][11] Event Commentary - The photovoltaic sector has seen leading companies enter a phase of substantial losses since Q4 2023, necessitating coordinated supply-side reforms among key industry players [2] - Historical supply-side reforms in related industries have led to significant increases in Producer Price Index (PPI), indicating potential for recovery in the photovoltaic sector [2][14] Industry Performance - In May 2025, photovoltaic grid connections reached 9.3 GW, a 388% year-on-year increase, but demand is expected to face short-term pressure due to earlier overcapacity [3][20] - The future of photovoltaic demand is contingent on achieving price parity in energy storage solutions, which is anticipated to unlock new market opportunities [3][20]

Investment Rating - The investment rating for the company is downgraded to "Neutral" from a previous rating due to limited valuation attractiveness after a significant stock price increase [2][7]. Core Views - The approval of a private placement will alleviate the company's financial pressure, with plans to raise RMB 3.5 billion, primarily for a solar cell project [7]. - The company is expected to significantly reduce losses in Q2 2025 due to a higher sales proportion of premium BC components in overseas markets [7]. - The supply side of the photovoltaic industry is anticipated to improve following recent government meetings aimed at regulating low-price competition and enhancing product quality [7]. - The target price for the company has been raised to RMB 16.50, reflecting an increase in valuation from 14 times to 18 times the 2026 earnings [7]. Financial Overview - Revenue projections show a decline in 2023 to RMB 27,170 million, followed by a significant drop in 2024 to RMB 11,155 million, before rebounding to RMB 22,800 million in 2025 [3][11]. - Net profit is expected to be negative in 2024 at RMB (5,319) million, with a gradual recovery projected in subsequent years, reaching RMB 2,622 million by 2027 [3][11]. - The company's earnings per share (EPS) is forecasted to be negative in 2024 at RMB (2.91), with a return to positive EPS of RMB 1.43 by 2027 [3][11]. - The price-to-earnings (P/E) ratio is projected to be 35.3 in 2023, with a significant drop to 10.2 by 2027, indicating a potential recovery in profitability [3][11]. Stock Performance - The stock has shown a year-to-date increase of 32.76%, with a 52-week high of RMB 16.49 and a low of RMB 7.39 [6][10]. - The average daily trading volume is reported at 78.98 million shares, indicating active trading interest [6].

Market Overview - The three major indices in China experienced collective gains, with the Shanghai Composite Index rising by 0.7%, the Shenzhen Component Index increasing by 1.47%, and the ChiNext Index up by 2.39% [1][3]. - The photovoltaic sector saw significant ETF performance, with multiple ETFs such as the Photovoltaic 50 ETF rising by 5.90% and the E Fund Photovoltaic ETF increasing by 5.57% [1][10]. Sector Performance - In the A-share market, the telecommunications, power equipment, and electronics sectors led the day with gains of 2.89%, 2.3%, and 2.27% respectively, while utilities, banking, and household appliances lagged behind with declines [6]. - Over the past five trading days, the construction materials, steel, and comprehensive sectors showed strong performance with increases of 5.71%, 5.43%, and 3.67% respectively [6]. ETF Market Activity - The overall performance of ETFs indicated that thematic stock ETFs had the best average gain of 1.46%, while bond ETFs showed no change [8]. - The top-performing ETFs included the Photovoltaic 50 ETF, Photovoltaic Leader ETF, and E Fund Photovoltaic ETF, with returns of 5.90%, 5.57%, and 5.57% respectively [10]. - The top three ETFs by trading volume were the A500 ETF Fund, A500 ETF Huatai Baichuan, and A500 ETF Jiashi, with trading volumes of 3.73 billion, 3.37 billion, and 3.09 billion respectively [12][13]. Investment Trends - There is a notable influx of capital into the technology innovation sector, highlighted by the rapid issuance of the first batch of 10 technology innovation bond ETFs, which collectively raised 30 billion yuan [2]. - The introduction of technology innovation bond ETFs is seen as strategically significant, filling a gap in public funds within the "technology finance" bond fund sector and promoting targeted investment in hard technology [2].

Group 1 - The core viewpoint of the news highlights a strong performance in the photovoltaic industry, with the CSI Photovoltaic Industry Index rising by 5.09% and key stocks such as Daqo Energy and Tongwei Co. experiencing significant gains [1] - The CSI Photovoltaic Industry Index is composed of up to 50 representative listed companies involved in the photovoltaic industry chain, reflecting the overall performance of these securities [2] - The index's valuation is at a historical low, with a latest price-to-book ratio (PB) of 1.78, indicating a strong value proposition as it is lower than 82.54% of the time over the past three years [2] Group 2 - The top ten weighted stocks in the CSI Photovoltaic Industry Index account for 55.39% of the index, with notable companies including Sungrow Power Supply, LONGi Green Energy, and Tongwei Co. [2] - The photovoltaic industry is responding to supply-side reforms, with glass manufacturers planning to collectively reduce production by 30% starting in July, which is expected to lead to a rebound in polysilicon prices [1] - The focus is on two main areas: the rigid supply side and the potential price elasticity of materials like silicon, glass, and quartz sand following a recovery in demand, as well as long-term growth opportunities arising from new technologies [1]

Investment consulting business qualification：CSRC License [2012] No. 669 投资咨询业务资格：证监许可【2012】669 号 中 信 期 货 国 际 化 研 究 | 中 信 期 货 研 究 所 International 2024-10-09 中信期货国际化研究 | CITIC Futures International Research 2025/07/08 China Futures Daily Note 中国期货每日简报 桂晨曦 Gui Chenxi 从业资格号 Qualification No：F3023159 投资咨询号 Consulting No.：Z0013632 CITIC Futures International Service Platform：https://internationalservice.citicsf.com 摘要 Abstract Macro News: Li Qiang attends the first-stage meeting of the 17th BRICS Leaders' Meetin ...

Investment Rating - The report maintains an "Outperform" rating for the electric equipment and new energy industry [1]. Core Insights - The photovoltaic supply-side reform is ongoing, with a focus on improving product quality and eliminating low-price competition [1][2]. - In June, the wholesale sales of new energy passenger vehicles in China reached 1.26 million units, a year-on-year increase of 29% [1][2]. - The demand for batteries and materials is expected to grow as new models of electric vehicles are launched in the second half of the year, with projections indicating high growth in domestic sales of new energy vehicles by 2025 [1]. - The solid-state battery industrialization trend is clear, with attention on related materials and equipment companies [1]. - In May, China's photovoltaic installed capacity reached 92.92 GW, a year-on-year increase of 388%, which may suppress demand for photovoltaic installations in the near term [1]. - The hydrogen energy sector is being driven by policies promoting industrialization, with a focus on companies with cost and technological advantages in electrolyzer production and hydrogen infrastructure [1]. Summary by Sections Industry Performance - The electric equipment and new energy sector rose by 1.99% this week, outperforming the Shanghai Composite Index, which increased by 1.4% [10]. - The photovoltaic sector saw a significant increase of 6.80%, while the lithium battery index rose by 3.84% [2][13]. New Energy Vehicles - Major players in the new energy vehicle market reported varying delivery figures for June, with BYD delivering 383,600 units (up 11.98% year-on-year) and Li Auto experiencing a decline of 24% [2][27]. - The report highlights the expected growth in new energy vehicle sales, driven by the introduction of new models [1][2]. Photovoltaic Sector - The central economic work conference emphasized the need to regulate low-price competition and improve product quality in the photovoltaic industry [1][2]. - The report notes the significant increase in installed capacity and the potential impact on future demand [1]. Hydrogen Energy - The approval of a large-scale green hydrogen pipeline project indicates ongoing support for the hydrogen energy sector [1][27]. Company Developments - Companies like EVE Energy and Xinwanda are planning to issue H-shares for overseas listings, indicating growth strategies in the electric equipment sector [2][28].

Core Viewpoint - The A-share photovoltaic sector has experienced a significant rebound since July 2, with notable increases in stock prices for companies like Yamaton and Yijing Photovoltaic, indicating a potential turning point after three years of decline [1][3]. Group 1: Market Performance - Since July 2, 2025, Yamaton and Yijing Photovoltaic saw stock price increases of 33% and 26% respectively over three trading days [1]. - Major companies such as Daqo Energy and Tongwei Co. also experienced gains exceeding 10% [1]. - The photovoltaic sector has faced a cumulative decline of over 50% since its peak in 2022, with some leading companies suffering losses of over 80% [3]. Group 2: Government Policy and Industry Outlook - The sixth Central Financial Committee meeting emphasized the need to regulate low-price competition and promote the exit of outdated production capacity in the photovoltaic sector [5][6]. - This policy direction is seen as a potential precursor to a supply-side reform similar to that initiated in the coal and steel industries in 2015 [7][10]. - The Ministry of Industry and Information Technology held a meeting focusing on the photovoltaic industry, where it was discussed to control the total production of polysilicon to not exceed 1.4 million tons by 2030, indicating a potential reduction of over 56% in capacity [8][9]. Group 3: Industry Dynamics and Investment Opportunities - The current market sentiment reflects a belief that the photovoltaic industry may be on the verge of a significant turnaround, with expectations of concrete policy implementations soon [15][19]. - A proposed alliance among six leading polysilicon companies aims to establish a 70 billion yuan fund to acquire and retire excess production capacity, which could facilitate a more orderly market exit for smaller firms [17][18]. - The current cash cost of polysilicon production for leading companies is around 27,000 to 35,000 yuan per ton, with a reasonable price expectation of 45,000 to 50,000 yuan to ensure profitability [25][26]. Group 4: Market Structure and Future Prospects - The global polysilicon market is heavily concentrated in China, with the top six companies accounting for over 80% of the market share [21]. - The integration of polysilicon production is expected to be less challenging compared to other segments, suggesting a higher potential for price recovery [22]. - The photovoltaic sector's overall valuation is currently at a historical low after three years of decline, indicating potential for valuation recovery as fundamental conditions improve [27].

Investment Rating - Maintain "Buy" rating for the industry [6] Core Insights - The report emphasizes the importance of breaking the "involution" competition in the photovoltaic sector and highlights opportunities for supply-side reforms [15][16] - Wind power demand is expected to continue growing, with significant increases in project approvals and bidding volumes [16][18] - The approval of the first cross-province green hydrogen pipeline in Inner Mongolia marks a significant step for the hydrogen energy sector [20] - The launch of the Honor Magic V5 smartphone with the highest silicon content in the battery indicates advancements in lithium battery technology [30] Summary by Sections Photovoltaics - The report discusses the need for supply-side reforms to eliminate low-price competition and improve product quality in the photovoltaic industry [15] - Key companies to watch include Xiexin Technology, Tongwei Co., Daqo New Energy, and others involved in silicon materials and glass production [15] - The report anticipates a rebound in polysilicon prices due to collective production cuts by glass manufacturers [15] Wind Power & Grid - Wind power projects are seeing a surge in approvals, with 549 projects totaling 67.53 GW approved by June 30, 2025, representing an 8% year-on-year increase [18] - The report highlights the approval of two major ultra-high voltage transmission projects, which are expected to accelerate the development of the power grid [17][19] - Companies involved in wind power equipment and components are recommended for investment, including Goldwind Technology and others [18] Hydrogen & Energy Storage - The approval of the first cross-province green hydrogen pipeline is a landmark development for hydrogen energy, expected to lower transportation costs and promote green hydrogen consumption [20] - The report notes significant bidding activity in the energy storage sector, with a total of 2,973.119 MW/10,376.405 MWh of projects awarded in June [21] - Recommended companies in the hydrogen and energy storage sectors include Longi Green Energy and Sungrow Power Supply [20][29] Lithium Batteries - The Honor Magic V5 smartphone features a battery with a silicon content of 25%, showcasing advancements in battery technology [30] - The report suggests that the demand for high safety, lightweight, and long-lasting batteries in consumer electronics will drive the development of silicon-carbon anodes and solid-state batteries [30] - Key companies to monitor in the lithium battery space include Defu Technology and others [30][31]

Investment Rating - The report maintains a "Recommended" investment rating for the photovoltaic industry [1]. Core Viewpoints - The report emphasizes the need to break the "involution" style competition in the photovoltaic sector, advocating for supply-side reforms driven by policy, industry self-discipline, and corporate production cuts [2]. - It highlights a significant increase in domestic photovoltaic installations, with 197.85 GW added from January to May 2025, representing a 150% year-on-year growth [2]. - The report identifies new technologies, particularly BC (Bifacial Cell) and copper paste, as key drivers for future industry growth and cost reduction [2]. Summary by Sections Industry Overview - The solar energy index rose by 4.1%, with notable gains from companies like Daqo New Energy and Tongwei Co., Ltd., which saw increases exceeding 10% [2]. - The report discusses the government's increasing focus on addressing low-price disorderly competition, aiming to enhance product quality and facilitate the exit of outdated production capacity [2]. Supply and Demand Dynamics - The report notes a recovery in polysilicon prices, with the average transaction price for N-type polysilicon rising to 34,700 CNY/ton, a 0.87% increase week-on-week [2]. - It asserts that the main challenge in the photovoltaic industry is supply rather than demand, with expectations for improved supply conditions due to government guidance and industry self-regulation [2]. Technological Advancements - The report forecasts that leading companies will significantly expand their BC production capacity, with Longi Green Energy expected to reach 50 GW by the end of 2025 [2]. - It highlights the trend towards reducing silver usage in photovoltaic cells, with the silver consumption per watt decreasing from 6 mg/W to 0.5 mg/W, driven by advancements in technologies like XBC, TOPCon, and HJT [2]. Investment Recommendations - The report suggests focusing on leading companies with strong advantages in new technologies, recommending stocks such as Longi Green Energy, Aiko Solar Energy, and JinkoSolar [2]. - It also advises attention to auxiliary material sectors that benefit from policy improvements and have higher safety margins, recommending companies like GCL-Poly Energy and Sungrow Power Supply [2].