25 November 2025 | 6:58AM CST Equity Research CHINA SOLAR: TRACKING PROFITABILITY INFLECTION Nov-25: Upstream price/supply declined for the first time since July-25 Our China Solar Profitability Tracker follows monthly supply/demand and inventory dynamics by sub-sector, and the spot prices/input costs implied cash GP & EBITDA margin trends for companies under our coverage. Key highlights in Nov MTD: Sector view: We believe the ongoing anti-involution campaign with newly imposed Goldman Sachs does and seeks ...

Summary of China Renewable Energy Conference Call Industry Overview - The conference call focused on the **China Renewable Energy** sector, particularly the solar energy market, including polysilicon, wafers, solar cells, modules, and solar glass products [1][2][3][4][5][6]. Key Points and Arguments Price Trends - **Polysilicon Prices**: Average market prices for n-type grade rod-type polysilicon decreased by -0.1% week-over-week (wow) to Rmb51.9/kg, while granular silicon prices remained unchanged at Rmb50.5/kg [2]. - **Wafer Prices**: Prices for n-type wafers fell by -2.3% wow to Rmb1.26/W for 182mm products and -1.8% wow to Rmb1.68/W for 210mm products due to inventory pressure [3]. - **Solar Cell Prices**: Average prices for TOPCon solar cells decreased by -2.6% wow to Rmb0.30/W [3]. - **Module Prices**: Average market prices for TOPCon modules increased slightly by 0.2% wow to Rmb0.67/W for utility-scale projects, but remained stable for distributed projects [4][5]. - **Solar Glass Prices**: Prices for solar glass products decreased by -1.5% wow to Rmb12.8/m2 for 2.0mm and -1.3% wow to Rmb19.8/m2 for 3.2mm products [6]. Inventory and Demand - **Inventory Levels**: Polysilicon inventory at producer plants rose by +3.1% wow to 267k tonnes, while wafer inventory increased by 5.3% wow to 18.4GW [2][3]. - **Demand Decline**: Domestic solar installation demand in China dropped by -50.9% year-over-year (yoy) to 28.7GW in 3Q25, while module export volume grew by +43.6% yoy to 78.8GW in the same period [1][5]. - **Future Projections**: Monthly polysilicon output is expected to decline by 14% month-over-month (mom) to 120k tonnes in November, with an annual output forecasted to drop by 27.8% yoy to 1,330k tonnes in 2025 [2]. Market Dynamics - **Anti-Involution Policies**: The anticipated increase in module prices is driven by anti-involution policies in China's solar industry and the potential removal of VAT rebates for module exports by the end of 2025 [1][5]. - **Production Adjustments**: Certain polysilicon plants in Southwest China, including Tongwei's facilities, suspended production due to weakened demand and increased electricity prices [2]. Investment Preferences - **Preferred Companies**: The report favors inverter manufacturers such as **Sungrow** and **Deye**, which are expected to benefit from the growth in energy storage systems. Polysilicon producers are also favored due to higher average selling prices (ASP) and potential capacity consolidation [1]. Additional Important Information - **Risks**: Key risks for companies like Deye and Sungrow include lower-than-expected demand for energy storage, increased price competition, and potential trade tariffs against Chinese products in overseas markets [20][22]. - **Valuation Models**: Target prices for companies are based on discounted cash flow (DCF) models, with specific assumptions regarding growth rates and weighted average cost of capital (WACC) [19][21][23]. This summary encapsulates the essential insights from the conference call, highlighting the current state and future outlook of the China Renewable Energy sector, particularly in solar energy.

China solar Global Markets Research EQUITY: ALTERNATIVE ENERGY Positive on solar anti-involution Recent news highlights positive signs; anti-involution likely to succeed with pricing uptick in the mid-term Polysilicon anti-involution news: signal positive signs Recently, we noted three news highlighting efforts in the China polysilicon industry to address "involution". 1) The JA Solar (002459 CH, Not rated) announcement on 12 November after market firmly denies market talk, falsely attributing statements to ...

27 October 2025 | 8:01AM CST Equity Research CHINA SOLAR: TRACKING PROFITABILITY INFLECTION Upstream price hike paused in Oct, downstream price acceptance likely weakened by higher silver price Our China Solar Profitability Tracker follows monthly supply/demand and inventory dynamics by sub-sector, and the spot prices/input costs implied cash GP & EBITDA margin trends for companies under our coverage. Key highlights in Oct MTD: Valuation wise, we believe the market is currently pricing in Poly/Wafer/Module/ ...

Summary of China Renewable Energy Conference Call Industry Overview - The conference call focused on the **China Renewable Energy** sector, particularly the solar energy market, including solar glass, polysilicon, wafers, solar cells, and modules. Key Points and Arguments Policy Developments - The **Ministry of Industry and Information Technology (MIIT)** and other Chinese administrations issued a new policy titled "Work Plan for Stabilizing Growth in the Building Materials Industry (2025-2026)" aimed at promoting low carbon and digitalization in the construction materials industry. This policy is expected to facilitate the consolidation of solar glass production by shifting focus from 'project management' to 'planning oriented', which may help eliminate inefficient production capacity [1][1][1]. Price Trends - **Midstream solar product prices** (wafer, solar cells, and solar glass) increased by **1-3% week-over-week (wow)**, while upstream polysilicon and downstream solar module prices remained stable [1][1][1]. - **Polysilicon prices** saw a slight increase of **0.2% wow**, averaging **Rmb52.3/kg** for n-type grade rod-type polysilicon, while granular silicon prices remained unchanged at **Rmb49.5/kg**. Polysilicon inventory at producer plants decreased by **6.8% wow** to **204k tonnes** [2][2][2]. - **Wafer prices** for n-type products rose by **1.5% wow** to **Rmb1.35/W** for 182mm products and **1.2% wow** to **Rmb1.70/W** for 210mm products. Total wafer inventory increased by **1.9% wow** to **16.9GW** [3][3][3]. - **Solar cell prices** increased by **2.5% wow** to **Rmb0.32/W** for TOPCon products, with expected output rising by **1.5% wow** to **60.0GW** in September [3][3][3]. - **Module prices** experienced a slight decline, with average prices for TOPCon modules decreasing by **0.6% wow** to **Rmb0.66/W** for utility-scale projects [4][4][4]. Demand and Production Insights - **Solar installation demand** in China remains muted due to tariff uncertainties, but module export demand has grown significantly, with a **41.9% year-over-year (yoy)** increase in module export volume to **26.6GW** in August [6][6][6]. - Monthly module output is expected to rise by **2.2% month-over-month (mom)** and **2.4% yoy** to **50.3GW** in September [6][6][6]. - **Solar glass prices** increased by **1.1% wow** to **Rmb13.5/m2** for 2.0mm products, while the inventory period decreased by **6.8% wow** to **15.0 days** [7][7][7]. Company Recommendations - The report expresses a favorable outlook on companies such as **Sungrow** and **Deye**, which are expected to benefit from the growing demand for energy storage systems. Additionally, it recommends buying shares in upstream polysilicon makers like **GCL**, **Tongwei**, **Daqo**, and **TBEA** due to anticipated industry consolidation driven by anti-involution measures [1][1][1]. Additional Important Information - The report highlights the potential for increased capacity utilization among module companies to produce more with low-cost materials amid rising upstream solar product prices [6][6][6]. - The operational daily solar glass melting capacity remained unchanged at **89,290 tonnes**, but some companies plan to increase capacity due to improved profitability [7][7][7]. This summary encapsulates the key insights and developments discussed during the conference call, providing a comprehensive overview of the current state and future outlook of the China Renewable Energy sector.

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 China Solar Industry Conference Call Industry Overview - The conference call focused on the solar industry in China, particularly the dynamics of module pricing and profitability trends [1][5][11]. Key Highlights - **Module Price Trends**: Early signs of a module price increase were noted with China Huadian's 20GW solar project bidding starting at an average of Rmb0.71/w, which is 6% higher than the current spot module pricing of Rmb0.67/w [5][17]. - **Supply/Demand Outlook**: The monthly supply/demand ratio is expected to worsen, deteriorating to 1.4X-2.1X in August from 1.3X-1.7X in July, primarily due to slow supply cut adjustments [5][12]. - **Inventory Levels**: Significant inventory increases were observed in the Poly and Module segments, with Poly inventory rising by 10% month-over-month to 158GW and Module inventory increasing by 23% to 34GW [5][12]. - **Sector View**: The solar sector is believed to be at a cyclical bottom, with a potential inflection point expected around the second half of 2026. Long-term profitability is anticipated to remain low due to a slowdown in demand growth in China [5][11]. Financial Metrics - **Profitability Trends**: Cash gross profit margins (GPM) and EBITDA margins improved for upstream companies but deteriorated for downstream companies in August [6][9]. - **Spot Price Changes**: The average cash GPM for various segments showed mixed results, with Poly GPM at +1pp, Wafer at -5pp, Cell at -6pp, and Module at -9pp month-to-date [9][21]. - **Production Increases**: Production across the value chain is expected to increase by 5%-20% month-over-month in August, with specific increases of +19% for Poly, +5% for Wafer, and +12% for Module [11][12]. Pricing Dynamics - **Value Chain Pricing Stability**: Overall, value chain prices remained stable in August, with a notable 6% increase in Glass prices due to rapid inventory depletion [5][17]. - **Average Cash Profit Changes**: The average cash profit for Poly was reported at Rmb12.0/kg, while for Granular Poly it was Rmb16.3/kg, indicating a positive trend in upstream profitability [21]. Additional Insights - **Inventory Days**: The average inventory days across the value chain are expected to remain at 40 days in August, reflecting a diversified inventory situation relative to demand [12][15]. - **Challenges Ahead**: The implementation of price hikes and profitability improvements is seen as challenging without significant fiscal support and changes in local government incentives [5][11]. This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state and outlook of the solar industry in China.

Summary of China Solar Profitability Tracker Conference Call Industry Overview - The report focuses on the solar industry in China, specifically tracking profitability trends and supply/demand dynamics within the solar value chain [1][5]. Key Highlights - **Module Price Trends**: Early signs of module price increases were noted, with China Huadian's 20GW solar project bidding starting at an average of Rmb0.71/w, which is 6% higher than the current spot module pricing of Rmb0.67/w. This price hike followed a joint meeting by six ministries on August 19 [5]. - **Supply/Demand Outlook**: The monthly supply/demand ratio is expected to worsen, estimated to be between 1.4X-2.1X in August, down from 1.3X-1.7X in July. This deterioration is attributed to slow supply cut adjustments, with increased inventory pressures in the Poly and Module segments [5][12]. - **Production Increases**: Production across the value chain is expected to increase by 5%-20% month-over-month in August, with specific increases of +19% for Poly, +5% for Wafer and Cell, and +12% for Module [11]. - **Inventory Dynamics**: End-August inventory is projected to decline significantly in the Cell and Glass segments due to higher module production demand, while Poly and Module inventories are expected to rise [12]. Financial Metrics - **Profitability Trends**: Cash gross profit margins (GPM) and EBITDA margins have shown improvement in upstream segments but have deteriorated in downstream segments. For example, the cash GPM for Poly is at 29%, while for Modules, it is at -3% [6][9]. - **Spot Price Changes**: As of August 21, 2025, spot prices for most value chain products remained stable, except for a 6% increase in Glass prices due to rapid inventory depletion [17][21]. Sector View - The report suggests that the solar sector is at a cyclical bottom, with a potential inflection point expected around the second half of 2026. However, normalized profitability is likely to remain low due to a slowdown in demand growth in China [5]. - **Investment Preferences**: The report indicates a preference for investments in Cell & Module and Film segments, while showing a bearish outlook on Glass, Poly, Wafer, and Equipment segments [5]. Additional Insights - **Challenges in Implementation**: The anticipated price hikes and profitability improvements are contingent on effective implementation of policies, which currently face challenges due to a lack of fiscal support and changes in local government incentives [5]. - **Diverse Inventory Days**: The average inventory days across the value chain are expected to remain at around 40 days in August, reflecting a diverse inventory situation relative to demand [12][15]. This summary encapsulates the key points from the conference call regarding the current state and outlook of the solar industry in China, highlighting both opportunities and risks for investors.

Summary of Key Points from the Conference Call Industry Overview: China Renewable Energy Solar Module Exports - **Export Value Decline**: China's solar module export value decreased by 19.3% year-over-year (yoy) and 0.8% month-over-month (mom) to US$1,906 million in July [1] - **Export Volume Increase**: Estimated export volume rose by 13.3% yoy and 2.3% mom to 22.2GW, driven by demand recovery from Europe (+16.5% yoy to 9.9GW) [1] - **Regional Demand Variations**: Increased demand from the Philippines (+173.7% yoy to 1.2GW) and Africa (+61.0% yoy to 1.8GW) was noted, while demand from Brazil (-38.8% yoy to 0.9GW) and India (-81.8% yoy to 0.2GW) declined [1] - **Total Export Volume**: China's total solar module export volume was down 1.5% yoy to 149.2GW in the first seven months of 2025, likely due to more direct exports of solar cells for assembly outside China [1] Inverter Exports - **Export Value Growth**: China's inverter export value increased by 15.8% yoy but decreased by 0.7% mom to US$911 million in July [1] - **Demand Recovery**: Significant demand recovery was observed from Europe (+28.1% yoy to US$398 million) and Australia (+206.0% yoy to US$54 million) [3] - **Emerging Markets**: Strong growth was also noted in emerging markets such as UAE, Saudi Arabia, and Vietnam [1] - **Regional Performance**: Inverter exports from Anhui province (home to Sungrow) increased by 27.5% yoy to US$117 million, while exports from Zhejiang province (home to Deye and Ginlong) decreased by 3.6% yoy to US$216 million [6] Production and Installation Trends - **Module Production Output**: China's module production volume was up 1.5% yoy to 330.4GW in the first seven months of 2025, but a decline of 4.6% yoy and 0.6% mom to 46.8GW is expected in August due to lower solar installation demand [2] - **Solar Installation Growth**: Solar installations in China increased by 106.5% yoy to 211.6GW in the first half of 2025, although June saw a significant drop of 41.0% yoy to 13.8GW after a rush installation period ended [2] Investment Insights - **Preferred Segments**: The report suggests a preference for upstream polysilicon manufacturers benefiting from higher average selling prices (ASP) and potential capacity consolidation, as well as inverter companies like Sungrow and Deye that are expected to benefit from energy storage system demand growth [1] Additional Considerations - **Market Dynamics**: The report highlights the contrasting trends in demand across different regions and the implications for production and export strategies within the Chinese renewable energy sector [1][2][3] - **Future Outlook**: The ongoing recovery in demand from Europe and emerging markets may provide opportunities for growth, despite the current challenges faced by the solar module segment [1][3]

Summary of China Solar Industry Conference Call Industry Overview - The conference call focused on the **China Solar** industry, particularly the dynamics of supply, demand, and pricing within the solar value chain [1][3][20]. Key Highlights - **Profitability Tracker**: The China Solar Profitability Tracker monitors monthly supply/demand and inventory dynamics, along with cash gross profit (GP) and EBITDA margin trends for covered companies [1]. - **Price Increases**: A policy-driven price hike occurred in July, with upstream prices for Poly increasing by **34%** and Wafer by **21%**. Domestic Poly future quotes surged over **60%**, reaching **Rmb49-51/kg** [6][20]. - **Demand Weakness**: Despite price increases, transaction volumes remained muted due to weak demand. Global module demand fell by **67% month-over-month** and **17% year-over-year** to **45GW** in June [6][21]. - **Cyclical Bottom**: The industry is believed to be at a cyclical bottom, with a potential inflection point expected around **2H26** as demand turns [3]. Profitability Insights - **Cash Profitability Improvement**: Spot price implied cash profitability improved for Tier 1 players, with upstream segments showing stronger sequential recovery [8][11]. - **Average Cash GPM Changes**: The average cash gross profit margin (GPM) for Poly was **28%**, Wafer **5%**, Cell **1%**, Module **11%**, and Glass **-12%** [11]. Inventory and Production Dynamics - **Production Forecast**: Poly production is expected to increase by **7%** in July, while other segments like Wafer and Cell are projected to decline by **11%** and **5%**, respectively [13]. - **Inventory Days**: Inventory days are likely to rebound to **39 days** in July from **34 days** in June, indicating intensifying inventory pressure in the Poly segment [14][17]. Investment Recommendations - **Preferred Segments**: The report recommends a "Buy" on Cell & Module and Film, while advising a "Sell" on Glass, Poly, Wafer, and Equipment [3]. - **Long-term Outlook**: Mid-to-long run normalized profitability is expected to remain low due to a slowdown in demand growth in China [3]. Additional Insights - **Market Dynamics**: The successful pass-through of upstream price hikes to downstream operators is crucial but appears challenging given the softer demand outlook [21]. - **Global Module Demand Forecast**: The full-year installation forecast suggests a **42% year-over-year** decline in global module demand, averaging **33GW** per month in **2H2025** [6]. This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state and future outlook of the China Solar industry.