The recent photovoltaic products, ranging from polysilicon to components, have declined in varying degrees, and some products have fallen by more than 30% from the highest point to the present, creating tremendous pressure on related production companies.
The reasons for the decline: the phased economic decline caused by the imbalance between supply and demand. First, the price drop is the only way for the solar industry to have a cost advantage.
Under this premise, it must be realized that the current price fall is not a simple short-term fluctuation, but a downturn in the cycle of industrial prosperity, which is the imbalance between supply and demand caused by the dual effects of the gradual release of large capacity and the deceleration of demand in the previous two years. Sex price falls;
This industry boom began in mid-2009. The trigger was the one-time extraction of polysilicon falling prices from companies after the financial crisis. After the boom, the economy rose and reached its peak in the second half of last year. The trigger factor was the over-expectation of the Italian and German markets. ;
After that, the economy began to maintain and slowly declined. In fact, sales of components began to be difficult at the beginning of the year. It was far from the heat of the second half of last year. This was a sign that the industry began to turn cold. After that, the price of components began to fall, followed by batteries, then silicon. The film is finally polysilicon that has just begun to fall.
How long and how long it can go: The worst days of silicon wafers and batteries have passed, and it is said that the decline of photovoltaic products is still in a gradient, and that polysilicon, silicon wafers, batteries, and components will not fall at the same time or they will stop falling at the same time. The previous round of price decline was due to the financial crisis. The trigger was a severely overvalued polysilicon price avalanche, which led to polysilicon. Demand was reduced due to falling costs and credit contraction; this year’s decline was As the downstream demand can not undertake such a huge upstream capacity, leading decline is the nearest component to the market. In terms of magnitude, we currently judge that the prices of silicon wafers and batteries should fall to the industry's average net profit level based on the European market conditions and current prices and the profitability of enterprises. In terms of time, we should judge that the half-year should end, but before it should be experienced A wave of overcapacity brought overcapacity.
What will happen later: Polysilicon still has a lot of downside, and the price of silicon cells will continue to decline. Since the beginning of the year, we have repeatedly emphasized in roadshows and communications to avoid polysilicon, silicon, and batteries. From the current point of view, although the price of some products has not fallen by a small margin, it is said that the stoppage may be seen within a month, but our judgment is that we must wait until the fourth quarter;
At present, the price of polysilicon has not dropped sharply. We believe that under the dual pressure of decreasing costs and sharply shrinking profitability of downstream wafers, polysilicon will have a substantial decline, starting at a high of RMB 700,000/tonne at the beginning of the year. It may be close to 40%, and the market price may go up to 400,000.
Investment strategy: Concerned about the time of price increase, the sub-sector that continues to favor growth without price cuts. In the current situation where the downward trend of prices has not yet ended, we continue to recommend the view from the end of last year on polysilicon, silicon wafers, and batteries. Several mainstream products wait and see;
After this round of price plunge, the PV parity that we have always been looking forward to will come. Therefore, we strongly recommend that people pay attention to the point when the price drop brings about an increase in IRR and an increase in shipments. This will be a historic investment opportunity;
Although the industry is generally bleak, the sub-sectors with unabated increases in prices are still worth watching, such as silver paste and inverters.
The reasons for the decline: the phased economic decline caused by the imbalance between supply and demand. First, the price drop is the only way for the solar industry to have a cost advantage.
Under this premise, it must be realized that the current price fall is not a simple short-term fluctuation, but a downturn in the cycle of industrial prosperity, which is the imbalance between supply and demand caused by the dual effects of the gradual release of large capacity and the deceleration of demand in the previous two years. Sex price falls;
This industry boom began in mid-2009. The trigger was the one-time extraction of polysilicon falling prices from companies after the financial crisis. After the boom, the economy rose and reached its peak in the second half of last year. The trigger factor was the over-expectation of the Italian and German markets. ;
After that, the economy began to maintain and slowly declined. In fact, sales of components began to be difficult at the beginning of the year. It was far from the heat of the second half of last year. This was a sign that the industry began to turn cold. After that, the price of components began to fall, followed by batteries, then silicon. The film is finally polysilicon that has just begun to fall.
How long and how long it can go: The worst days of silicon wafers and batteries have passed, and it is said that the decline of photovoltaic products is still in a gradient, and that polysilicon, silicon wafers, batteries, and components will not fall at the same time or they will stop falling at the same time. The previous round of price decline was due to the financial crisis. The trigger was a severely overvalued polysilicon price avalanche, which led to polysilicon. Demand was reduced due to falling costs and credit contraction; this year’s decline was As the downstream demand can not undertake such a huge upstream capacity, leading decline is the nearest component to the market. In terms of magnitude, we currently judge that the prices of silicon wafers and batteries should fall to the industry's average net profit level based on the European market conditions and current prices and the profitability of enterprises. In terms of time, we should judge that the half-year should end, but before it should be experienced A wave of overcapacity brought overcapacity.
What will happen later: Polysilicon still has a lot of downside, and the price of silicon cells will continue to decline. Since the beginning of the year, we have repeatedly emphasized in roadshows and communications to avoid polysilicon, silicon, and batteries. From the current point of view, although the price of some products has not fallen by a small margin, it is said that the stoppage may be seen within a month, but our judgment is that we must wait until the fourth quarter;
At present, the price of polysilicon has not dropped sharply. We believe that under the dual pressure of decreasing costs and sharply shrinking profitability of downstream wafers, polysilicon will have a substantial decline, starting at a high of RMB 700,000/tonne at the beginning of the year. It may be close to 40%, and the market price may go up to 400,000.
Investment strategy: Concerned about the time of price increase, the sub-sector that continues to favor growth without price cuts. In the current situation where the downward trend of prices has not yet ended, we continue to recommend the view from the end of last year on polysilicon, silicon wafers, and batteries. Several mainstream products wait and see;
After this round of price plunge, the PV parity that we have always been looking forward to will come. Therefore, we strongly recommend that people pay attention to the point when the price drop brings about an increase in IRR and an increase in shipments. This will be a historic investment opportunity;
Although the industry is generally bleak, the sub-sectors with unabated increases in prices are still worth watching, such as silver paste and inverters.
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