Core Viewpoint - The Sichuan Provincial Energy Bureau has issued specific implementation requirements for the management of distributed photovoltaic (PV) power generation projects, aiming to standardize and promote their development in the province [1][2]. Group 1: Key Principles of the New Policy - The new distributed PV policy is based on three main principles: 1. Adaptation to local conditions, planning construction based on resource availability and grid capacity 2. Focused support for the rapid development of commercial and industrial distributed PV, ensuring all necessary preparations are made and projects can be built quickly 3. Regulated development of household PV systems, implementing the "Thousand Households in the Sunlight Action" in a scientific and orderly manner while respecting farmers' rights and interests [1]. Group 2: Grid Connection and Usage Requirements - For large commercial projects, the principle is self-consumption, with the option to sell excess electricity to the market after the provincial electricity spot market is operational. Specifically, for projects in the "Three Prefectures and One City" (Aba, Ganzi, Liangshan, and Panzhihua), the self-consumption ratio should not be less than 50% for the entire year [1]. Group 3: Project Filing Management - Construction units and individuals must file with the local authorities in their project area. Individuals can choose to either have the grid company handle the filing or do it themselves. The Sichuan regulations stipulate that filing authorities cannot arbitrarily stop or suspend filings, impose additional conditions, or create barriers to market entry [1]. Group 4: Dynamic Assessment of Grid Capacity - Sichuan requires ongoing assessments of grid capacity for distributed PV. Local energy authorities must organize evaluations by grid companies on a quarterly basis, reporting the available capacity and categorizing it into "red, yellow, green" levels, which will be submitted to the Sichuan Provincial Energy Bureau [2].

Core Viewpoint - The article discusses the implementation of the "Distributed Photovoltaic Power Generation Development and Construction Management Measures" issued by the National Energy Administration, emphasizing the need for high-quality development in the distributed photovoltaic industry and the opportunities presented by new policies [3]. Group 1: Definition and Classification - Photovoltaic power generation is the method of converting solar radiation energy directly into electrical energy using solar cells. It is classified into centralized photovoltaic power stations and distributed photovoltaic power generation [5]. - Distributed photovoltaic power generation is developed on the user side, connected to the distribution network, and is generally balanced near the distribution network system [5]. - There are four types of distributed photovoltaic power generation: household use by natural persons, household use by non-natural persons, general commercial and industrial, and large commercial and industrial [6]. Group 2: Types of Distributed Photovoltaic Power Generation - Natural person household use refers to distributed photovoltaic systems built by individuals on their own residential properties, with a connection voltage not exceeding 380 volts. Non-natural person household use involves entities investing in similar systems with a connection voltage not exceeding 10 kV (20 kV) and a total installed capacity not exceeding 6 MW [7]. - General commercial and industrial distributed photovoltaic systems are built on public institutions and commercial buildings, with a connection voltage not exceeding 10 kV (20 kV) and a total installed capacity generally not exceeding 6 MW. Large commercial and industrial systems can connect at 35 kV or 110 kV (66 kV) with higher capacity limits [9]. Group 3: Connection and Capacity Regulations - A project with a connection voltage of 10 kV and an installed capacity of 8 MW does not qualify as general commercial distributed photovoltaic power generation due to exceeding the capacity limit [10]. - A project with a connection voltage of 35 kV and an installed capacity of 5 MW cannot be classified as general commercial distributed photovoltaic power generation [11]. Group 4: Grid Connection Modes - Distributed photovoltaic power generation can adopt three grid connection modes: full grid connection, all self-consumption, and self-consumption with surplus electricity fed into the grid [13]. - Both natural person and non-natural person household uses can choose from the same grid connection modes [14]. - General commercial distributed photovoltaic systems can choose all self-consumption or self-consumption with surplus electricity fed into the grid, while large commercial systems generally must choose all self-consumption [15][16]. Group 5: Project Management and Land Use - Distributed photovoltaic projects must be located within the same land red line as the user’s substation. Large commercial systems can cross land red lines when engaging in dedicated supply [22]. - Projects built on agricultural facilities, such as greenhouses, are classified as agricultural-light complementary projects and fall under centralized photovoltaic management [25]. - Photovoltaic projects built on roads or slopes adjacent to buildings can be managed as commercial distributed photovoltaic systems if they are within the same land red line [26].

Investment Rating - The investment rating for the company is Neutral with a target price of HKD 3.47, representing a potential downside of 8.9% from the current price of HKD 3.81 [1][4][11]. Core Views - The company experienced an expanded loss in Q4, with a reported loss of RMB 363 million, which is an 88% increase quarter-on-quarter. This was primarily due to a 13% decline in the average price of photovoltaic glass, leading to a gross margin drop of 11.6 percentage points to a record low of -30.4% [2][7]. - Recent strong rebounds in photovoltaic glass prices are expected to help mitigate losses, with a projected price increase of RMB 1.75 per square meter or 15% in March, and an anticipated further increase of RMB 0.5 per square meter or 4% in April [7][9]. - The company plans to increase its stake in Jiangsu Kaisheng by investing RMB 370 million to acquire 74.6% equity, while its northern glass production capacity is ready for ignition, pending market conditions [7][9]. Financial Overview - Revenue for 2023 is projected at RMB 6,595 million, with a significant decline expected in 2024 to RMB 4,594 million, followed by a slight recovery in subsequent years [3][14]. - The net profit is forecasted to be a loss of RMB 610 million in 2024, with gradual improvements leading to a profit of RMB 34 million by 2027 [3][14]. - The company’s gross margin is expected to remain negative in 2024 at -4.8%, with a slight recovery to 1.0% in 2025 [9][14]. Market Dynamics - The photovoltaic glass market is experiencing a supply-demand reversal, with production capacity decreasing from a peak of 123,000 tons to 97,000 tons by January 2025, which is expected to support price increases [7][9]. - The introduction of new policies for distributed photovoltaic projects and changes in new energy pricing are likely to drive demand ahead of the deadlines in May 2025, creating a short-term surge in demand [7][9].