Core Viewpoint - TCL Zhonghuan reported that the photovoltaic industry experienced price fluctuations in the supply chain due to terminal market demand in the first half of the year, but prices in the upstream supply chain rebounded from July to September, leading to a recovery in industry profitability [1] Industry Summary - The photovoltaic industry faced price volatility in the main supply chain during the first half of the year due to strong demand in the terminal market [1] - From July to September, the prices in the upstream supply chain further increased, which gradually transmitted to the silicon wafer segment [1] - The recovery in prices has contributed to an improvement in industry profitability [1]

Core Viewpoint - The photovoltaic industry is experiencing upward pressure on costs due to rising prices of upstream materials, particularly silicon, while demand remains stable overseas [1] Industry Summary - Upstream prices in the photovoltaic industry continue to rise, with recent increases in silicon material prices significantly elevating cost pressures [1] - Silicon wafer prices are on an upward trend, while prices for battery cells and modules remain stable, supported by robust overseas demand [1] - Domestic market expectations indicate a potential decline in terminal module demand in the second half of the year due to the impact of market-oriented pricing policies for new energy grid connections [1] - However, a quarter-on-quarter recovery in overseas demand is anticipated by the end of Q3 [1] - The domestic industry is undergoing self-regulatory actions, with the effectiveness of these measures still to be observed [1] Company Performance - In Q2, major companies in the photovoltaic supply chain may still be operating at negative gross margins, with most segments not yet escaping cash cost losses [1] - A recovery in profitability is expected to begin in Q3 [1] Investment Products - The photovoltaic 50 ETF (159864) tracks the photovoltaic industry index (931151), which includes listed companies involved in solar photovoltaic power generation across the entire industry chain [1] - The index comprises companies with high growth potential and technological leadership, reflecting the overall performance and development trends of China's photovoltaic industry [1] - Investors without stock accounts may consider the Guotai CSI Photovoltaic Industry ETF Initiated Link A (013601) and Guotai CSI Photovoltaic Industry ETF Initiated Link C (013602) [1]