Core Insights - Company achieved revenue of 3.794 billion yuan in H1 2025, a year-on-year increase of 13.09%, and a net profit of 602 million yuan, up 70.96% [1] - In Q2 2025, revenue reached 2.276 billion yuan, growing 16.25% year-on-year and 50% quarter-on-quarter, with net profit of 407 million yuan, a year-on-year increase of 22.75% and a quarter-on-quarter increase of 109.27% [1] Inverter Business - In H1 2025, inverter sales reached 466,000 units, with expected growth in both grid-connected and energy storage inverters in Q2 [2] - The gross margin for grid-connected inverters was 26.1%, up 7.6 percentage points year-on-year, while energy storage inverters had a gross margin of 30.3%, an increase of 2.7 percentage points year-on-year [2] - The previous year's H1 gross margins were lower due to raw material procurement timing, which has now normalized [2] Power Station Business - Revenue from the power station business in H1 2025 was 1.11 billion yuan, with a slight year-on-year increase, and expected revenue growth in Q2 due to peak generation season [2] - The gross margin exceeded 55% in H1 2025, with a slight year-on-year decline, but Q2 margins are expected to remain strong due to scale effects [2] Financial Metrics - The expense ratio for H1 2025 was 19.5%, with Q2 at 18.7%, showing a decrease of 2.0 percentage points quarter-on-quarter and 1.6 percentage points year-on-year, marking the lowest level since Q3 2023 [2] - The reduction in expense ratio is attributed to effective cost control and increased revenue scale [2] - In Q2, asset impairment of 17 million yuan and credit impairment of 14 million yuan impacted profit release [2] Future Outlook - Company anticipates maintaining a relatively full production schedule, with European demand potentially fluctuating due to holidays, while Australia and Asia-Africa-Latin America show strong performance [3] - The company expects industrial storage to double year-on-year over the next two years, with revenue gradually catching up to household storage [3] - Household storage is also projected to continue steady growth [3] Profit Forecast - Company is expected to achieve profits of 1.3 billion yuan and 1.6 billion yuan in 2025 and 2026, respectively, corresponding to PE ratios of 20 and 16 [4]

Investment Rating - The report maintains a "Buy" rating for the company, despite ongoing pressure on profitability in H1 2025 [4]. Core Viewpoints - The company reported significant operational cash flow turning positive, with a focus on achieving profitability by 2026 through stock option incentives [4][3]. - The company is facing challenges due to declining product prices, which have impacted revenue and profitability, despite maintaining a strong focus on differentiated innovation [2][4]. - The company has a robust cash position, with net cash flow from operating activities reaching 4.508 billion yuan in H1 2025, providing a solid foundation for navigating market cycles [3]. Summary by Sections Financial Performance - In H1 2025, the company achieved operating revenue of 23.905 billion yuan, a year-on-year decrease of 36.01%, and a net profit attributable to shareholders of -2.580 billion yuan, with losses widening compared to the previous year [1]. - The second quarter of 2025 saw operating revenue of 13.232 billion yuan, down 38.12% year-on-year, with a net profit of -0.942 billion yuan, indicating a narrowing loss compared to the previous quarter [1]. Product and Innovation - The company has launched various solutions for extreme weather conditions, enhancing product competitiveness, and achieved a shipment of 33.79 GW of battery modules in H1 2025, with approximately 45.93% of shipments going overseas [2]. - Despite the competitive landscape and price declines, the company reported a 38.35% decrease in module revenue to 21.777 billion yuan, with a gross margin drop of 10.51 percentage points to -5.98% [2]. Research and Development - R&D investment remained high at 1.388 billion yuan in H1 2025, accounting for 5.81% of revenue, with new products like the DeepBlue 5.0 achieving a conversion efficiency of 24.8% [3]. - The company introduced the "Molan" professional module, which significantly reduces initial investment costs in specific projects [3]. Cash Flow and Financial Health - The company reported a net cash flow from operating activities of 45.08 billion yuan in H1 2025, with cash reserves reaching a recent high of 26.075 billion yuan [3]. - The stock option incentive plan aims for a reduction in losses by at least 5% in 2025 and achieving positive net profit in 2026, reflecting confidence in the company's recovery [4]. Profit Forecast and Valuation - The company is projected to have a net profit of -3.540 billion yuan in 2025, with subsequent years showing a recovery to 0.843 billion yuan in 2026 and 3.199 billion yuan in 2027 [5]. - The report outlines a decrease in revenue growth rates, with a forecasted decline of 15.56% in 2025, followed by a rebound in 2026 and 2027 [5].

Core Insights - Hubei's photovoltaic installed capacity has surpassed 42.8282 million kilowatts, accounting for 32.31% of the total installed capacity, making it the largest power source in the province [1] - The photovoltaic capacity has exceeded hydropower for the second time this year and has now surpassed thermal power, which has an installed capacity of 41.1880 million kilowatts, representing 31.08% [1] - State Grid Hubei Electric Power is enhancing the grid structure to improve the absorption capacity in regions with concentrated photovoltaic installations, such as Suizhou, Xiaogan, and Huanggang [1]

Summary of the Conference Call for Fulete (福莱特) Company and Industry Overview - **Company**: Fulete (福莱特) - **Industry**: Photovoltaic Glass Industry Key Points and Arguments Financial Performance - In Q1 2025, Fulete reported revenue of 4.08 billion yuan, a year-on-year decline of 28.7%, primarily due to exceptionally high installation levels in Q1 2024 [2][3] - The company faced price pressure, with domestic market prices dropping to 10.5 yuan/unit, leading to losses of 1-1.5 yuan/unit for most companies [2][6] - Despite challenges, Fulete maintained strong profitability and cash flow control, with no new investment plans currently [2][7] Market Dynamics - The photovoltaic glass industry is experiencing a second round of capacity clearance, with significant demand pressure in 2025 [3][18] - Fulete's daily photovoltaic glass production capacity reached 20,600 tons by the end of 2023, accounting for approximately 25% of the global market share [3][12] - The company has adjusted its customer structure, increasing orders from India and the US to counteract domestic price declines [2][3] Challenges and Strategies - Fulete is actively seeking to stabilize prices and is looking for support from the Ministry of Industry and Information Technology to avoid deeper losses [6][7] - The glass industry is facing cash flow declines, particularly among second-tier companies, which are experiencing extended payment terms and increased financial costs [8][14] - The company has proactively shut down 1,800 tons of production capacity to adapt to market adjustments, maintaining a two-month collection cycle for receivables [8][13] Future Outlook - The overall supply in the glass industry is expected to decline until the end of 2026, with a more thorough capacity clearance anticipated [3][21] - Fulete's long-term effective capacity is projected to recover to over 20% as the industry consolidates [3][13] - The company is not planning new projects, focusing instead on maintaining operational efficiency and profitability [7][17] Price and Profitability Trends - The current price of photovoltaic glass is around 10.5 yuan, with potential further declines threatening profitability across the industry [22][25] - Fulete's net profit for the year is projected to be between 550 million to 558 million yuan, factoring in some impairment elements [25] - The glass industry is expected to see price stabilization and recovery post-capacity clearance, with long-term profitability anticipated [22][26] Investment Considerations - The photovoltaic glass sector is currently undervalued, with a target price of 18.51 yuan for A-shares and 13.3 HKD for Hong Kong shares [27] - The sector's resilience and long-term investment value make Fulete a stock to watch [27][28] Additional Important Insights - The glass industry has seen a significant drop in stock prices since 2021 due to increased capacity and lower-than-expected photovoltaic installation growth [2][9] - The company benefits from a strategic production capacity layout concentrated in regions with high component manufacturer density, enhancing transportation efficiency [15][16] - The industry is characterized by a high barrier to entry due to substantial capital requirements for new projects, making it difficult for new entrants to compete effectively [14][17]

Report Information - Report Date: July 30, 2025 [2] - Research Team: Energy and Chemical Research Team [3] - Researchers: Li Jie, CFA (Crude Oil and Fuel Oil); Ren Junchi (PTA/MEG); Peng Haozhou (Industrial Silicon/Polysilicon); Peng Jinglin (Polyolefins); Liu Youran (Pulp) [3] Market Performance and Outlook Market Performance - The price of the main polysilicon contract showed a strong trend. The closing price of PS2509 was 50,805 yuan/ton, with a gain of 3.76%. The trading volume was 546,037 lots, and the open interest was 140,638 lots, with a net increase of 4,343 lots [4] Market Outlook - The weekly output of polysilicon in the third week of July was 24,400 tons, a week-on-week increase of 4.01%. The supply in July will increase to 100,000 - 110,000 tons, expected to meet the downstream demand of 50 - 55GW. The downstream cell production schedule is also around 50GW, and the supply and demand maintain a loose balance without inventory reduction drivers [4] - The photovoltaic installation data for June (14GW) confirmed a sharp decline in domestic demand after the rush installation ended. The monthly terminal demand will drop to around 45GW [4] - Overall, recent price fluctuations are not closely related to fundamentals. The spot price ranges from 45,000 to 49,000 yuan/ton, providing a rigid support. Policy sentiment fluctuates, and the market is mainly in a high - level oscillation [4] Market News - On July 29, the number of polysilicon warehouse receipts was 3,070 lots, an increase of 20 lots (60 tons) compared with the previous trading day [5] - In June 2025, China's industrial silicon exports reached 68,300 tons, a month - on - month surge of 23% and a year - on - year increase of 12%, hitting a 18 - month high. Exports to Southeast Asia accounted for 58%, with Thailand (21,000 tons) and Malaysia (18,000 tons) being the main incremental markets, mainly used for local photovoltaic module production [5] - As of the end of June, the country's cumulative installed power generation capacity was 3.65 billion kilowatts, a year - on - year increase of 18.7%. Among them, the installed solar power generation capacity was 1.1 billion kilowatts, a year - on - year increase of 54.2%. The cumulative photovoltaic installation from January to June was 212.21GW, a year - on - year increase of 107.07%, but the domestic installation in June was only 14GW, showing a significant decline [5]

Core Viewpoint - The China Photovoltaic Industry Association has raised its forecast for installed capacity in 2025 from a range of 215GW-255GW to 270GW-300GW, despite challenges faced in the first half of the year [1] Group 1: Installed Capacity Forecast - The association's adjustment in the forecast is attributed to a solid foundation for photovoltaic project grid connection and strong certainty in installed capacity growth [1] - New policies have minimal impact on large-scale wind and solar projects, and stable demand is observed in provinces with mature market transactions [1] Group 2: Industry Performance and Challenges - In the first half of 2025, the production growth rate of battery cells and modules remained below 15%, while polysilicon and silicon wafer segments experienced negative growth [2] - The average prices of mainstream models in the four major segments of the photovoltaic industry have decreased significantly since 2020, with reductions of 88.3%, 89.6%, 80.8%, and 66.4% respectively [2] - The entire industry chain is facing unprecedented losses, with 31 A-share listed photovoltaic companies reporting a total net loss of 12.58 billion yuan in Q1 2025, a year-on-year increase of 274.3% [3] - Over 40 companies have announced delisting, bankruptcy, or mergers since 2024, indicating severe challenges in the industry [3] Group 3: Recommendations for Industry Stability - The industry is urged to strengthen self-discipline and adhere to industry rules to avoid pricing below cost, as suggested by industry leaders [3] - The association is committed to supporting comprehensive governance efforts and enhancing the standard system to curb vicious competition [3]

Report Summary 1) Report Industry Investment Rating No information provided. 2) Core Viewpoints of the Report - The main contract of polysilicon hit the daily limit during the session and then opened the limit and tumbled. The closing price of PS2509 was 50,080 yuan/ton, with a gain of 5.33%. The trading volume was 1,246,241 lots, and the open interest was 165,641 lots, a net decrease of 26,538 lots [4]. - The fundamental factors are not the main driving logic at present. After the end of the rush - installation in June, the domestic demand lacks follow - up, and the monthly terminal demand will drop to around 45GW. The resumption of production by silicon material enterprises will increase the supply to 10 - 110,000 tons, which can roughly meet the downstream demand of 48 - 50GW, and the supply - demand is barely balanced [4]. - The current market is mainly driven by policy > funds > fundamentals. After the commodity index fills the gap, there is resistance to the subsequent rally. If the polysilicon fails to break through the previous high in the short - term, it is likely to reach a phased peak. However, due to policy support and the fact that the spot price should not be lower than the full cost, the downward space is also limited. It is expected to be in a cautious and strong high - level oscillation during the day [4]. 3) Summaries According to Related Catalogs a. Market Performance and Outlook - Market performance: The polysilicon main contract showed volatile performance, hitting the daily limit and then falling. PS2509 had specific closing price, trading volume, and open - interest data [4]. - Outlook: The fundamental factors are not the main driver. There is a change in supply - demand after the end of the rush - installation. The current market is mainly affected by policy and funds, and the short - term trend has certain characteristics and limitations [4]. b. Market News - On July 23, the number of polysilicon warehouse receipts was 2,780 lots, with no increase compared to the previous trading day [5]. - On July 18, the Ministry of Industry and Information Technology announced that work plans for stabilizing growth in ten key industries such as steel, non - ferrous metals, petrochemicals, and building materials were to be introduced, aiming to adjust the structure, optimize the supply, and eliminate backward production capacity [5]. - In June 2025, China's industrial silicon exports reached 68,300 tons, a month - on - month increase of 23% and a year - on - year increase of 12%, hitting a 18 - month high. Southeast Asia was the main export destination, with Thailand and Malaysia as the main incremental markets for local photovoltaic module production [5]. - As of the end of June, the country's cumulative installed power generation capacity was 3.65 billion kilowatts, a year - on - year increase of 18.7%. Among them, the installed capacity of solar power generation was 1.1 billion kilowatts, a year - on - year increase of 54.2%. The cumulative photovoltaic installed capacity from January to June was 212.21GW, a year - on - year increase of 107.07%, but the domestic installed capacity in June was only 14GW, showing a significant decline [5].

Report Industry Investment Rating - Unilateral: Industrial silicon - Interval operation, upstream sell - hedge on rallies; Polysilicon - Neutral [2][8] - Inter - month spread: None for both industrial silicon and polysilicon [2][8] - Cross - variety: None for both industrial silicon and polysilicon [2][8] - Spot - futures: None for both industrial silicon and polysilicon [2][8] - Options: None for both industrial silicon and polysilicon [2][8] Core Views - Industrial silicon futures prices are relatively strong, affected by the rising sentiment of coking coal and the news of production cuts by a leading northwest enterprise. However, with increasing supply and high inventory, the rebound space is limited [1][2]. - Polysilicon futures rebounded, but the fundamentals are weak with high inventory, increasing supply after southwest restart, and possible decline in consumption. The market is easily affected by capital sentiment and policy disturbances [3][6]. Market Analysis - Industrial Silicon - On June 26, 2025, the main contract 2509 of industrial silicon futures opened at 7600 yuan/ton and closed at 7720 yuan/ton, up 2.66% from the previous settlement. The position of the main contract was 321342 lots, and the number of warehouse receipts on June 27 was 53234 lots, a decrease of 29 lots from the previous day [1]. - Spot prices remained stable. The price of East China oxygen - passing 553 silicon was 8100 - 8300 yuan/ton, 421 silicon was 8400 - 9000 yuan/ton, Xinjiang oxygen - passing 553 was 7500 - 7700 yuan/ton, and 99 silicon was 7500 - 7700 yuan/ton [1]. - The total social inventory of industrial silicon in major areas on June 26 was 54.2 tons, a decrease of 1.7 tons from the previous week. The inventory in ordinary social warehouses was 12.8 tons, a decrease of 0.3 tons, and that in social delivery warehouses was 41.4 tons, a decrease of 1.4 tons [1]. - The price of silicone DMC was 10300 - 10600 yuan/ton, and the price was temporarily stable, with mainly rigid - demand transactions [1]. Market Analysis - Polysilicon - On June 26, 2025, the main contract 2508 of polysilicon futures rebounded significantly, opening at 30745 yuan/ton and closing at 31715 yuan/ton, a 3.46% increase from the previous trading day. The position of the main contract was 77132 lots, and the trading volume was 225035 lots [3]. - Spot prices remained stable. The price of polysilicon re - feeding material was 30.00 - 33.00 yuan/kg, dense material was 28.00 - 32.00 yuan/kg, cauliflower material was 27.00 - 30.00 yuan/kg, granular silicon was 30.00 - 31.00 yuan/kg, N - type material was 33.00 - 36.00 yuan/kg, and N - type granular silicon was 31.00 - 32.00 yuan/kg [3]. - The inventory of polysilicon manufacturers increased slightly, with the polysilicon inventory at 27.00 tons, a 3.05% increase, and the silicon wafer inventory at 20.11GW, a 7.30% increase. The weekly polysilicon output was 23600.00 tons, a decrease of 3.67%, and the silicon wafer output was 13.44GW, an increase of 4.10% [3]. Market Analysis - Silicon Wafer and Battery - Silicon wafer prices: Domestic N - type 18Xmm silicon wafers were 0.87 yuan/piece, N - type 210mm were 1.23 yuan/piece, and N - type 210R silicon wafers were 1.02 yuan/piece [5]. - Battery prices: High - efficiency PERC182 battery was 0.27 yuan/W, PERC210 battery was 0.28 yuan/W, TopconM10 battery was 0.24 yuan/W, Topcon G12 battery was 0.25 yuan/W, Topcon210RN battery was 0.26 yuan/W, and HJT210 half - piece battery was 0.37 yuan/W [5]. - Component prices: The mainstream transaction price of PERC182mm was 0.67 - 0.74 yuan/W, PERC210mm was 0.69 - 0.73 yuan/W, N - type 182mm was 0.67 - 0.70 yuan/W, and N - type 210mm was 0.67 - 0.70 yuan/W [5]. Factors to Monitor - The resumption of production and new capacity commissioning in the northwest and southwest regions [4]. - Changes in the operating rate of polysilicon enterprises [4]. - Policy disturbances [4]. - Macroeconomic and capital sentiment [4]. - The operating rate of silicone enterprises [4]. - The impact of industry self - discipline on upstream and downstream operations [8]. - The impact of futures listing on the spot market [8]. - The impact of capital sentiment [8]. - The impact of policy disturbances [8].

Report Summary Investment Rating - No investment rating for the industry is provided in the report. Core Viewpoints - The report focuses on industrial silicon and polysilicon, suggesting to pay attention to the upside space due to production cut news and market sentiment fermentation respectively [1][2] Summary by Directory Fundamental Tracking - **Futures Market**: For industrial silicon Si2509, the closing price was 7,720 yuan/ton, with a trading volume of 1,087,621 lots and an open interest of 321,342 lots. For polysilicon PS2508, the closing price was 31,715 yuan/ton, with a trading volume of 225,035 lots and an open interest of 77,132 lots [2] - **Basis**: Industrial silicon's spot premium or discount varied against different benchmarks, and polysilicon's spot premium against N - type re - investment was +2155 yuan/ton [2] - **Price**: The price of East China oxygen - passing Si5530 was 8200 yuan/ton, Yunnan Si4210 was 9900 yuan/ton, and polysilicon N - type re - feedstock was 34500 yuan/ton [2] - **Profit**: Silicon factory profits were negative, with Xinjiang new standard 553 at - 3446 yuan/ton and Yunnan new standard 553 at - 6596 yuan/ton. Polysilicon enterprise profit was - 6.8 yuan/kg [2] - **Inventory**: Industrial silicon's social inventory was 54.2 million tons, enterprise inventory was 22.3 million tons, and industry inventory was 76.5 million tons. Polysilicon's factory inventory was 27.0 million tons [2] - **Raw Material Cost**: Prices of various raw materials such as silicon ore, washed coal, petroleum coke, electrodes, etc. showed different degrees of change [2] - **Related Products in the Polysilicon (Photovoltaic) Industry**: Prices of products like silicon powder, silicon wafers, battery cells, components, photovoltaic glass, and photovoltaic - grade EVA all had certain fluctuations [2] - **Organic Silicon and Aluminum Alloy**: The price of DMC in organic silicon was 10450 yuan/ton, and the profit of DMC enterprises was - 1688 yuan/ton. The price of ADC12 in aluminum alloy was 20000 yuan/ton, and the profit of recycled aluminum enterprises was - 610 yuan/ton [2] Macro and Industry News - On June 24, Longi Green Energy's solar cell and module manufacturing plant with an annual capacity of 1.4GW in Indonesia was officially launched. After the implementation of this project, Indonesia's solar energy capacity will increase to 3GW [2][4] Trend Intensity - The trend intensity of industrial silicon and polysilicon is both 0, indicating a neutral view [4]

Investment Rating - The investment rating for the company is "Buy" and is maintained [6]. Core Views - The company reported a revenue of 82.582 billion yuan in 2024, a year-on-year decrease of 36%, with a net profit attributable to shareholders of -8.618 billion yuan, down 180% year-on-year, which aligns with the performance forecast range [2][4]. - In Q4 2024, the company achieved a revenue of 23.99 billion yuan, a 32% year-on-year decline, with a net profit of -2.113 billion yuan [2][4]. - For Q1 2025, the revenue was 13.652 billion yuan, a 23% year-on-year decrease, with a net profit of -1.436 billion yuan [2][4]. Summary by Sections Sales and Production - In 2024, the company shipped 82.32 GW of battery modules, with external sales of 73.48 GW, representing a year-on-year growth of 10.6%. The BC product shipment exceeded 17 GW, accounting for over 20% of total shipments [10]. - The company’s silicon wafer shipments reached 108.46 GW, with external sales of 46.55 GW, a year-on-year decline of 13.45% [10]. Financial Performance - The gross margin for battery modules was 6.27%, down 12.11 percentage points year-on-year. The gross margin for silicon wafers was -14.31%, impacted by price declines [10]. - The company reported a significant reduction in management and R&D expenses in 2024, primarily due to a decrease in employee numbers and related costs [10]. Future Outlook - By the end of 2025, the company expects to achieve a BC 2.0 production capacity of 50 GW, with silicon wafer shipments projected at 120 GW and module shipments between 80-90 GW, with BC components accounting for over 25% [10]. - The company is collaborating with partners to expand its BC capacity and ecosystem, positioning itself as a potential leader in the industry cycle [10].