Investment Rating - The report maintains a "Recommendation" rating for the photovoltaic industry, indicating an expectation of high-quality development driven by recent policy changes [1][11][12]. Core Insights - The report highlights the need to eliminate "involution" in the photovoltaic industry, emphasizing the importance of improving product quality and promoting the orderly exit of outdated production capacity [1][11]. - Recent government meetings and discussions among industry leaders suggest a focus on sustainable development and self-regulation within the industry, which is expected to improve supply and demand dynamics, leading to price and profit recovery [2][12]. - The photovoltaic sector is currently experiencing low price levels and profitability, with expectations for a rebound as supply-side policies are implemented [2][12]. Summary by Sections Industry Investment Rating - The report maintains a "Recommendation" rating for the photovoltaic industry, anticipating that the industry index will outperform the benchmark index by over 5% in the next 3-6 months [1][63]. Market Overview - The report notes a 2.82% increase in the comprehensive index and a 1.99% increase in the electric power equipment industry index for the week [13][14]. - The photovoltaic equipment sector saw a significant increase of 5.76% during the same period [17]. Photovoltaic Industry Chain Prices - The average price for polysilicon dense material and granular material remained stable at 35.0 and 34.0 RMB/kg respectively [3][37]. - The average price for monocrystalline N-type silicon wafers (182-183.75mm) decreased by 2.2% to 0.88 RMB/piece [3][37]. - The price for TOPCon battery cells (182-183.75mm) was reported at 0.230 RMB/W, reflecting a decrease of 2.1% [3][37]. - The price for 3.2mm coated photovoltaic glass decreased by 2.6% to 18-19 RMB/m² [4][43]. Industry Valuation - As of July 4, the industry PE (TTM) for photovoltaic equipment is reported at 18x, with a valuation percentile of 13.8% [25][33]. - The report indicates that the electric power equipment industry has a PE (TTM) of 26x, with a valuation percentile of 24.9% [25][31].

Core Insights - The report highlights a structural decline in prices across the photovoltaic industry, particularly in battery cells, modules, and polysilicon, driven by weak demand and high inventory levels in Europe [4][5][6] - The report suggests a cautious outlook for the short term, with expectations of continued price declines in battery cells and modules due to low terminal demand and overstocking [4][5] - Key companies recommended for investment include Aiko Solar, Longi Green Energy, and others focusing on new technologies and supply-side improvements [4][6] Market Trends - The average price of N-type battery cells (182-183.75mm) is reported at 0.240 CNY/W, down 2.0% from the previous week, while the price for 182*210mm N-type battery cells remains stable at 0.265 CNY/W [4] - The average price of 182mm TOPCon double-glass modules is stable at 0.68 CNY/W, with a notable premium for BC modules [4] - The price of photovoltaic glass has decreased, with 3.2mm coated glass priced at 19.5 CNY/㎡, down 2.5% [4] Polysilicon and Wafer Prices - The average price for dense polysilicon is reported at 35.0 CNY/kg, remaining stable, while granular silicon has decreased by 1.4% to 34.0 CNY/kg [5] - The average price for N-type wafers (182-183.75mm) is stable at 0.93 CNY/piece, while the price for 182*210mm wafers has decreased by 1.9% to 1.05 CNY/piece [5] Investment Recommendations - Companies to actively monitor include Xinyi Solar, GCL-Poly Energy, Tongwei Co., and others, focusing on various strategic directions such as overseas expansion and domestic substitution [6]