Summary of Trina Solar (688599.SS) Conference Call Company Overview - **Company**: Trina Solar - **Industry**: Solar Energy Key Financial Highlights - **Net Loss**: Rmb2,918 million in 1H25 compared to Rmb526 million profit in 1H24, with a net loss of Rmb1,598 million in 2Q25 [1][9] - **Operating Cash Inflow**: Rmb1,843 million in 1H25, including Rmb2,679 million in 2Q25 [1] - **Revenue**: Decreased by 27.7% YoY to Rmb31,056 million in 1H25 [9] - **Module Shipment Volumes**: 32GW in 1H25, with 17GW in 2Q25, reflecting a 5.9% YoY decline [2][9] - **Gross Profit Margin**: Dropped to 4.9% in 1H25 from 13.4% in 1H24 [9] Core Insights - **Anti-involution Policy**: Trina Solar emphasized the importance of the Chinese government's anti-involution policy, which aims to prevent selling solar products below cost. This policy is expected to benefit polysilicon makers more than module manufacturers [1][8] - **Module Sales Losses**: The company reported losses of Rmb0.08/W on module sales in the first half of the year, while distributed systems generated a profit of Rmb0.2/W [2] - **Technology Outlook**: Trina Solar downplayed advancements in solar cell technology, indicating that TOPCON will remain the primary technology, with marginal improvements from newer technologies [2] Business Segment Performance - **Energy Storage System (ESS)**: The ESS business turned profitable in 2Q25, earning Rmb7-8 million, with a shipment volume of 1.7GWh in 1H25 [6] - **Export Focus**: 90% of ESS shipments were for exports, with significant orders from the US and a target to double shipment volume to 8GWh in 2025E [6] Market Conditions - **US Market Dynamics**: The US solar market may see sustained module demand due to installation rushes, despite regulatory changes that could limit new project approvals [7] - **Polysilicon Preference**: Analysts prefer polysilicon manufacturers like Tongwei over Trina due to uncertain benefits from anti-involution measures for module sales [8] Valuation and Risks - **Target Price**: Rmb12.00/share based on DCF valuation, indicating a potential decline of 28.3% from the current price of Rmb16.740 [4][16] - **Key Risks**: Include faster-than-expected global solar installation growth and price competition among module companies [17] Additional Notes - **Impairment Losses**: Trina may face impairment losses of Rmb400-500 million from its TOPCon production capacity in Thailand [8] - **Debt Levels**: Total debt increased by 5.8% to Rmb48.9 billion in 1H25, with a net debt to equity ratio rising to 91.1% [9]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Chinese macroeconomic environment** as of August 25, 2025, highlighting a shift in market sentiment towards a risk-on approach despite economic slowdowns. Core Observations 1. **Economic Slowdown and Policy Impact** - The slowdown in China's economy is attributed to the government's "anti-involution" policy aimed at curbing oversupply, which is expected to positively impact corporate profits and suggests a potential "policy put" if growth declines further [2][5][7] - Industrial production and fixed asset investment have decreased significantly due to this policy shift [5] 2. **Liquidity in Financial Markets** - There has been a notable increase in liquidity within China's financial markets, driven by fiscal expansion and increased government spending [9][10] - M1 and M2 money supply growth has accelerated, indicating a larger pool of liquid money available for investments [9][11] 3. **External Environment and Trade Dynamics** - The external environment has improved, with tariff risks peaking and trade negotiations between the US and China showing progress [12][13] - Despite a decline in exports to the US, China's overall exports grew by 6% year-on-year in the first seven months of 2025, supported by positive growth in other regions [13][15] 4. **Investor Sentiment and National Pride** - There is a growing positive sentiment towards China among both domestic and international observers, with improved perceptions compared to the US [16][18] - A sense of national pride is emerging, driven by technological advancements and cultural recognition, which may contribute to market performance [18] Potential Risks 1. **Economic Reality Check** - If the economic slowdown persists without signs of stabilization, investor sentiment may shift back towards low-risk assets [3][18] - The effectiveness of the government's "anti-involution" measures is crucial; failure to cut capacity could lead to deflationary expectations dominating sentiment [18] 2. **Market Valuation Concerns** - A rapid stock market rally could lead to stretched valuations, raising concerns about financial stability and prompting regulatory actions to limit inflows [19] Conclusion - The current risk-on sentiment in the Chinese market is supported by a combination of domestic policy changes, abundant liquidity, a favorable external environment, and improved national sentiment. However, ongoing monitoring of economic indicators and government policy effectiveness is essential to gauge future market stability and investor confidence [17][19]