Market rumors suggest that a meeting will be held in Yibin, with quotas for photovoltaic battery modules. The plan is to have 70% production in the first half of the year + 30% production capacity (with an additional 20% in BC production capacity).

1. Early indications have suggested that quotas for silicon wafers, batteries, and modules have reached a basic agreement. The quota = a*23-year sales volume + (1-a)*current production capacity, with different weight parameters for each link. (It's roughly understood that a is 0.7 for batteries, 0.5 for silicon wafers).

2. The battery segment has a significant impact because there are a large number of new capacity expansions in the N-type battery iteration. Last year, there were significant differences in the operating rates of first and second-tier battery factories, leading to significant differences in quota coefficients among companies. Quotas represent the operating rate, which significantly affects costs.

3. Two types of companies will benefit: a) Firstly, those with high sales volume in 2023 and no major expansions last year; b) Secondly, those who recently increased their BC production capacity, which provided a certain amount of additional quota. The former beneficiaries include Hainan Drinda New Energy Technology, whose 40GW domestic production capacity quota is nearly fully taken, allowing for close to full production capacity. The latter benefitted companies like Shanghai Aiko Solar Energy and Longi Solar also gained, receiving a considerable additional quota, with a total operating rate higher than their peers.

4. In the silicon wafer segment, Longi and Zhonghuan hold the majority of the quotas, while Shuangliang and others also have reasonable quotas. The actual impact on modules is relatively small.

The silicon material segment may require further observation due to significant differences in energy consumption and operating rates. However, leading enterprises have already begun to significantly reduce production.

5. The solar energy annual conference has been held, and the industry's main conference focusing on "preventing overcapacity" will be held tomorrow (the 5th) afternoon. The deployment has been further implemented, reaching a consensus. As we understand, numerous closed-door meetings have been held in the industry in recent days, discussing production limits and pricing at various stages. The production limit quotas are determined through calculations involving output, production capacity ratios, and detailed measures, accompanied by relatively strict supervision measures.

Policy details and the effectiveness of implementation are worth looking forward to.

Zhixin Finance and Economics App learned that Sinolink Securities released research reports stating that the solar energy primary industry chain has been operating at a loss for over half a year. Most segments are experiencing cash flow losses. Under the joint efforts of industry associations and self-discipline of enterprises, "production reduction and supporting prices" may become the unified action direction for leading companies in various segments of the industry chain. Considering that industry capital expenditures have significantly slowed down, as outdated production capacities are gradually eliminated, the supply-demand relationship in various segments of the industry chain is continually improving, and is expected to accelerate during the "year-end" period between the end of 2024 and the beginning of 2025.

The solar energy industry's various segments are solidifying the bottom of the prosperity cycle, with the clearer and more widespread main industry chain profit turning point expected to arrive as early as Q2 2025. It is anticipated that most target companies will show an upward trend with fluctuations in the future.

Photovoltaic sector related companies:

Xinte Energy (01799), GCL Tech (03800), Xinyi Solar (00968), Flat Glass (06865), and more.