On Friday, new energy raceway stocks continued to rise, with photovoltaic concepts, BC batteries, and energy storage sectors all rising.

As of press time, photovoltaic equipment sector rose more than 2%, Shichuang Energy 20CM rose by limit, Goodwe rose more than 14%, Ginlong Technologies rose more than 12%, Hemai Shares, Deyi Shares, Sungrow Power Supply, Sineng Electric and other stocks also soared.

Since this week, the photovoltaic sector has begun to rebound and has risen more than 7% in a week.

In terms of capital flow, the photovoltaic equipment sector has the highest net inflows, with net inflows exceeding 1 billion yuan at present.

Is the industry embracing innovation?

Recently, the Ministry of Industry and Information Technology issued the "Regulatory Conditions for the Photovoltaic Manufacturing Industry (2024)" and the "Regulatory and Announcement Management Measures for the Photovoltaic Manufacturing Industry (2024)" (draft for comments).

Among them, it is explicitly mentioned to guide photovoltaic companies to reduce photovoltaic manufacturing projects that simply expand production capacity, strengthen technological innovation, improve product quality, and reduce production costs.

The minimum capital ratio for new and expansion photovoltaic manufacturing projects is 30%.

As the policy guides the transformation of the photovoltaic industry, it will inevitably concentrate resources on high-quality enterprises and effectively accelerate the elimination process of backward production capacity.

Earlier, the National Energy Administration also stated that the competition in China's photovoltaic industry is indeed very fierce, and it will reasonably guide the construction and release of photovoltaic upstream production capacity to avoid redundant construction of low-end production capacity.

Recently, photovoltaic manufacturers have experienced a collective "hemorrhage", and their mid-year performance is bleak.

Due to the imbalance between supply and demand in the industry, "significant losses" have become a common phenomenon. Among the disclosed forecast photovoltaic companies, at least eight leading enterprises in the first half of the year have a maximum net loss of more than 1 billion yuan.

Among them, Longi Green Energy is expected to lose 4.8-5.5 billion yuan, while its net profit in the same period last year was 9.178 billion yuan.

In this round of industry downturn, "volume increase and price decrease" is the main factor of impact.

Zhu Gongshan, chairman of Xinjiang Goldwind, pointed out at the end of June that the price war for the photovoltaic silicon industry chain is extremely fierce today.

So far, the four main materials in the photovoltaic industry chain, silicon materials, silicon wafers, batteries, and modules, have basically fallen below the cash cost, and the entire industry chain is under pressure.

Market data shows that in the first half of the year, among the four major materials of photovoltaics, silicon materials prices fell by more than 40%, and silicon wafer prices also fell by more than 30%, both of which fell by more than 80% compared with the previous highs.

In addition, the prices of battery cells and modules have also dropped by at least 15% this year, shrinking nearly 60% compared with last year's high point.

Is the inflection point for photovoltaics approaching?

The entire industry chain's profitability continues to be under pressure. When will the industry rebound?

Longi Green Energy Technology's chairman Zhong Baoshen recently stated that with the current competitive situation, prices may stabilize or even rise slightly in about three months.

"2024 will be a very difficult year for the company and for the industry. 2025 will be the year when the company recovers before the photovoltaic industry."

Market analysts also believe that a bottoming out of profits indicates that a turning point is imminent, but it also indicates that a real clearance of production capacity will gradually begin in the second half of the year.

Lü Jinbiao, the joint secretary-general of SEMI China Photovoltaic Standards Committee, pointed out that the photovoltaic industry will adjust within the year, and signals of adjustment will be seen in the third quarter.

"The adjustment of the industry chain will first be reflected in the polycrystalline silicon end. Companies will relieve inventory pressure by arranging production lines with relatively high costs to stop production and reduce load in a flexible manner."

In order to survive the cycle, photovoltaic companies are also increasing their investment in technological innovation, and with the boost of policies, what will be the trend of the photovoltaic market in the future?

Everbright Securities believes that the revision is aimed at further guiding photovoltaic companies to reduce investment in photovoltaic manufacturing projects that only expand production capacity, while further improving the requirements for project technology and energy consumption management.

Against the backdrop of a sustained decline in photovoltaic product prices, companies in various links of the main industry chain are facing severe operating pressures. Leading enterprises with cost and technology advantages are expected to occupy a leading position in the clearance of industry capacity.

However, Cifco Securities also pointed out that the photovoltaic industry is still maintaining a relatively fierce competitive situation. After large-scale expansion of industry capacity in 2023, the short-term trend of photovoltaic capacity optimization and clearance in the main industry chain has not changed, and there is still great pressure on profits in various links of the main industry chain.

In this context, companies with abundant funds and obvious technological advantages are expected to survive the cycle, but at present, there is only the possibility of a short-term rebound, and a long-term reversal still requires continuous optimization from the industry side.