In early trading on January 6, A-share photovoltaic concept stocks frantically pulled up and stopped rising, and the photovoltaic index rose more than 2.5% in early trading.

Individual stocks, as of press time, Haiyou new materials rose nearly 17%, Oriental Sunrise, CITIC Bo, Mingguan new materials, Gu Dewei and other rose more than 10%, Lushan new materials, Aixu shares, Junda shares, Foster and so on have risen by the limit.

HJT battery index also rose rapidly, Yubang new materials rose more than 15%, Oriental Sunrise, Robert Tecco, Sunshine Power, Haiyuan compound Materials, Dicco shares, Longji Green Energy and so on rose sharply.

At the same time, Hong Kong stocks photovoltaic solar energy across the board strengthened, Flat Glass Group once rose more than 13%, Xinyi Solar, Xinte Energy, Luoyang Glass shares, Xiexin Technology and so on rose.

On the news side, due to the stabilization of silicon wafer prices in the past two days and the optimistic demand of component enterprises for February orders, market confidence has been restored, and a number of component companies have temporarily raised their component production plans for January. Among them, a leading Shaanxi enterprise held a production increase meeting in the afternoon of January 5th. In addition, first-line component enterprises JK and JA also released production plans one after another.

Huatai research newspaper pointed out that with the gradual release of silicon production capacity, the price of photovoltaic main materials has fallen rapidly recently. It is expected that the decline in the price of photovoltaic main materials is conducive to the continued strong growth of installed demand in 2023, but for the photovoltaic glass industry, the current core contradiction has not been alleviated. Due to the more rapid production capacity growth in 22-23, the competition in the photovoltaic glass industry is expected to become more fierce in 2023.

Price reduction may become the main theme of photovoltaic industry chain in 2023.

Recent quotations from the Silicon Industry Branch show that the average transaction price of single crystal re-investment materials in China this week is 178200 yuan / ton, and the average transaction price of single crystal compact material is 176200 yuan / ton, which is more than 40% lower than the high point in 2021. The market transaction situation is light, the actual order signing enterprise is only 2-3. Due to the decline in market prices and falling much faster than expected, most front-line upstream and downstream enterprises are still in a stalemate.

The price of silicon wafers continues to fall. The average transaction price of M6 single crystal silicon chip dropped to 3.5 yuan per chip; the average transaction price of M10 single crystal silicon chip dropped to 3.74 yuan per chip; the average transaction price of G12 single crystal silicon chip dropped to 4.9 yuan per chip; and the cycle-to-cycle ratio of M6 and G12 single crystal silicon wafers both dropped by more than 20%.

The price reduction of silicon materials and wafers is accelerating to the downstream battery wafers and components. The latest data from the Silicon Industry Association show that the price of mainstream battery chips is 0.8-0.85 yuan / W, down 26% from the previous month; in terms of components, the previous orders for components are basically more than 1.6 yuan / W.

In fact, the price of the photovoltaic industry chain has suddenly cooled at the end of 2022. Since October 2022, the price of silicon wafer has fallen sharply ahead of the upstream silicon link, the price war has begun in an all-round way, and the trend of price reduction has rapidly spread to the downstream battery link. Due to the continued release of new production capacity on the supply side and the sharp decline in seasonal terminal demand, the psychological tug-of-war between upstream and downstream has become more sensitive, with a strong wait-and-see mood of "buy up instead of buy down", according to the China Securities News. The price of the industrial chain has not yet bottomed out, and the decline will continue in the short term.

Price reduction in 2023 will be the main theme of the photovoltaic industry chain. Many people in the industry said that the installed capacity of photovoltaic will continue to increase in 2023, but because the expansion speed of back-end cells and components is slower than that of front-end silicon material and silicon wafer, the front-end capacity will be in a state of excess. Under such circumstances, price reduction is the trend of the times.

"from silicon to wafers to batteries to components, prices will continue to fall in 2023. Silicon prices will return to the normal state, before 300000 yuan / ton is profiteering, the future will return to 80, 000 yuan to 120000 yuan / ton normal range. " An industry insider said.

The profits of the industrial chain may be transferred downstream.

The photovoltaic manufacturing industry chain is mainly divided into four links: silicon material, silicon wafer, battery chip and module.

In the past two years, the price of silicon has risen fiercely, and the photovoltaic industry once supported silicon as the king. Data show that since the beginning of 2021, the price of silicon has risen from 80 yuan / kg to more than 300 yuan / kg in the third quarter of this year, a cumulative increase of more than three times, reaching a 10-year high. Silicon companies have taken away most of the profits of the photovoltaic industry chain and become the biggest beneficiaries.

According to statistics, in the first three quarters of this year, Tongwei shares and Daquan Energy, the leading silicon companies, realized net profits of 21.73 billion yuan and 15.085 billion yuan respectively belonging to shareholders of listed companies, up 265.54% and 237.23% over the same period last year. The gross profit margin of Daquan energy in the first three quarters was even as high as nearly 74%.

In the remaining links, silicon wafer enterprises have a certain pricing power, which can better transmit the price increase of upstream silicon materials downwards, thus squeezing the profits of battery chips and components accordingly. For example, component manufacturer Jingao Technology's gross profit margin in the first three quarters was 13.44%, and Trina Solar's gross profit margin in the first three quarters was 13.45%, both slightly lower than the same period last year. The above-mentioned companies said that the slight decline in gross profit margin was mainly affected by the higher price of silicon material upstream.

However, industry experts believe that with the gradual lifting of the bottleneck of silicon supply, the profits of the industrial chain will be transferred from the upstream to the downstream, and the battery chips and components are expected to benefit from the redistribution of profits in the industrial chain.

Caixin Securities pointed out that the era of "silicon is king" is over, the competition pattern of the photovoltaic industry chain will be reshaped, and the industry will shift from the price elasticity caused by the mismatch between supply and demand to the development duration of technological change. In this context, a number of agencies suggest to pay attention to the profit repair of battery chips, the iteration of battery technology and the gap of photovoltaic materials.

CITIC analyzed and estimated that the newly installed scale of photovoltaic in China will reach 140 million kilowatts in 2023. In particular, with the release of new production capacity of silicon materials and other links in 2023, costs have gradually come down. The installed proportion of ground power stations suppressed by low yields may recover, and the growth rate of ground power stations is expected to reach 80% compared with the same period last year. Distributed power stations are also expected to maintain a growth rate of nearly 40%. CITIC believes that looking forward to 2023, we think that through the downward price of silicon to achieve the downward price of components and installation costs, the logic of volume increase is very clear. The profit gap caused by the fall in silicon prices will be transmitted downstream along the industrial chain.

Edit / lydia