中国光伏反内卷：是迂回，而非转向-China Solar Anti-Involution_ A detour, not a u-turn

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the China Solar Industry, specifically focusing on the polysilicon sector and the implications of the anti-involution initiative led by the State Administration for Market Regulation (SAMR) [1][4]. Core Insights and Arguments - The SAMR rejected the CPIA's proposal for a consolidation fund and self-imposed production quotas, citing non-compliance with anti-trust laws, which is seen as a setback for the solar anti-involution initiative [1][3]. - Despite this setback, the outlook remains optimistic, viewing the situation as a detour rather than a u-turn due to the high political profile of the initiative [1][4]. - Potential outcomes include government intervention to manage production quotas or the issuance of waivers by senior bureaus [1][5]. - In a worst-case scenario where higher-cost producers go bankrupt, Daqo and GCL Tech are expected to emerge as winners due to their strong financial positions [1][9]. Important Developments - A meeting was scheduled for January 6, 2026, where the SAMR expressed concerns about anti-trust issues and required major polysilicon producers to submit rectification plans by January 20, 2026 [2][5]. - The establishment of a platform for consolidating polysilicon capacity was noted on December 9, 2025, but concerns about anti-trust compliance may hinder its effectiveness [3][5]. Pricing and Cost Insights - The estimated cost for marginal polysilicon producers is around Rmb 50/kg, which is slightly below current spot prices, indicating a need for prices to remain above production costs [4][8]. - The cash production costs for major polysilicon producers in 2025 are projected, with GCL Tech being the lowest at Rmb 23.9/kg and Daqo at Rmb 36.2/kg [11]. Stock Recommendations - The report maintains an Overweight (OW) rating on Daqo New Energy (DQ US) and GCL Tech (3800 HK), highlighting their strong balance sheets and competitive positions in the market [9][23]. Risks and Future Considerations - There are rising risks associated with the polysilicon consolidation fund plan due to the SAMR's anti-trust concerns, which may prevent producers from coordinating production and pricing [3][5]. - If the consolidation plan fails, polysilicon producers may continue to compete freely, potentially leading to a price floor at Rmb 50/kg without restrictions on production or sales volume [8]. Conclusion - The solar industry in China is navigating significant regulatory challenges, but the long-term outlook remains positive, particularly for financially robust companies like Daqo and GCL Tech. The situation is being closely monitored for further developments regarding government interventions and market dynamics [1][4][9].