Photovoltaic Industry Weekly Report: Supply-Side Reform and Policy Tailwinds Drive Structural Recovery

Date: February 24, 2026
Sector: Power Equipment / Photovoltaics (PV)
Rating: Overweight (Positive)
Analyst: Zhang Xinyi (S1490522090001)

Executive Summary

The Chinese photovoltaic (PV) sector is currently navigating a critical inflection point characterized by stabilizing supply chain prices, robust policy support for the "15th Five-Year Plan" (2026-2030), and accelerating regional industrial integration. For the week ended February 13, 2026, while the broader PV equipment index underperformed the general market slightly (-1.08% vs. +0.36% for CSI 300), the underlying fundamentals suggest a consolidation phase preceding a potential upward trajectory driven by supply-side reforms and technological iteration.

Key developments this week include the stabilization of main chain prices—particularly polysilicon and modules—and significant policy announcements from the National Energy Administration (NEA) regarding the construction of integrated wind-solar-hydrogen-ammonia-methanol bases and zero-carbon parks. Furthermore, provincial governments in Guizhou and Inner Mongolia have unveiled ambitious capacity targets and industrial cluster plans, reinforcing long-term demand visibility.

We maintain an Overweight rating on the PV sector. Our investment thesis centers on three pillars:
1. Profitability Repair: Driven by supply-side reforms that are gradually clearing excess capacity and stabilizing margins.
2. Technological Alpha: Opportunities arising from the transition to next-generation high-efficiency technologies (e.g., BC, HJT, perovskite tandem).
3. Demand Beta: Marginal improvements in demand expectations fueled by national and local policy mandates.

Investors should focus on leading polysilicon producers, module integrators with strong brand channels, and equipment manufacturers benefiting from technology upgrades. While short-term volatility persists due to project commencement timelines and trade friction risks, the long-term structural growth story remains intact.

Key Takeaways

1. Market Performance: Divergence Within Power Equipment

For the trading week of February 9–13, 2026, the A-share market exhibited mixed performance across the power equipment landscape. The CSI 300 Index rose by 0.36%, with 18 out of 31 Shenwan industry indices posting gains. The broader Power Equipment Index (Shenwan) increased by 1.13%, ranking 13th among all sectors and outperforming the benchmark by 0.77 percentage points.

However, performance within the secondary sub-sectors of power equipment was divergent:

Source: Wind, Guoxin Securities Research

Stock-Level Dynamics:
Within the PV equipment sector, individual stock performance highlighted a rotation towards specific niche leaders and material suppliers, while integrated module makers faced pressure.
* Top Performers: Microdao Nano (Micro-dao Nanometer), Polymer Materials, DKEM (Dike Shares), Deye Shares, and Ancai Hi-Tech. These gains were likely driven by specific order announcements or resilience in auxiliary material segments.
* Laggards: Topray Solar, JinkoSolar, Risen Energy, Kingchen Machinery, and Autowell (Aotewei). The decline in major module manufacturers and equipment providers like Autowell suggests lingering concerns over near-term margin compression or order delivery delays.

2. Supply Chain Price Analysis: Stabilization Signals

According to data from Datayes (as of February 11, 2026), the PV supply chain prices have largely stabilized, indicating that the aggressive price wars of previous periods may be bottoming out. This stabilization is a crucial prerequisite for margin repair across the industry.

Main Chain Prices

Auxiliary Material Prices

Source: Datayes, Solarzoom, Guoxin Securities Research

Interpretation:
The flattening of polysilicon, cell, module, glass, and silver paste prices is a positive signal for industry health. It reduces uncertainty for both manufacturers and project developers. The slight dip in wafer prices (-0.1 CNY/piece) is the only notable movement, reflecting continued efficiency improvements or minor oversupply in that specific link, but it has not yet transmitted significantly to cell or module pricing. This price stability allows manufacturers to better forecast costs and manage working capital, setting the stage for potential profitability recovery as volume picks up.

3. Policy Catalysts: Strategic Direction for the "15th Five-Year Plan"

The most significant driver for the sector this week stems from high-level policy directives outlining the roadmap for China’s energy transition through 2030.

A. National Energy Administration (NEA): Integrated Bases and Zero-Carbon Parks

On February 23, 2026, Ren Yuzhi, Director of the Planning Department of the NEA, published an article titled "Promoting the Initial Establishment of a New Energy System in the 15th Five-Year Plan" in China Electric Power News. The article outlines several strategic priorities that directly benefit the PV sector:

1. Integrated Energy Bases: The layout and construction of several "Wind-Solar-Hydrogen-Ammonia-Methanol" integrated bases. This signifies a shift from pure electricity generation to chemical energy storage and transport, creating new demand avenues for PV power beyond the grid.
2. Zero-Carbon Parks: The establishment of a batch of zero-carbon industrial parks. This drives distributed PV adoption and requires sophisticated energy management systems, benefiting companies with integrated solutions.
3. Concentrated Solar Power (CSP): Construction of CSP projects, which complements intermittent PV and wind, enhancing grid stability.
4. "Small and Beautiful" Projects: Acceleration of smaller-scale, high-efficiency projects and the upgrading of EV charging networks, which often co-locate with PV installations.

Investment Implication: This policy framework moves the narrative from simple capacity addition to systemic integration. Companies capable of providing hybrid solutions (PV + Storage + Hydrogen/Chemical integration) or serving industrial zero-carbon requirements will command a premium.

B. Provincial Targets: Guizhou and Inner Mongolia

Regional governments are translating national goals into concrete capacity targets and industrial clusters, providing visible demand pipelines.

Guizhou Province: 15th Five-Year Plan Outline (Released Feb 14, 2026)
* Capacity Target: By 2030, new energy installed capacity to exceed 65 GW, accounting for >45% of total power generation capacity.
* Total Power Capacity: Total installed power capacity to reach 140 GW.
* Strategic Focus:
* Acceleration of large-scale wind and PV projects.
* Localized utilization of distributed energy.
* Exploration of low-wind speed generation technologies.
* "AI + New Energy" application scenarios, suggesting a push for smart O&M and grid optimization.
* Development of hydrogen full-chain (production, storage, transport, refueling, usage).
* Virtual power plants (VPP) and load-side regulation resources.
* Market Mechanism: Improvement of mid-to-long term and spot electricity markets, and regional ancillary service markets.

Inner Mongolia Autonomous Region: Government Work Report (Feb 12, 2026)
* Industrial Cluster Goal: Creation of trillion-yuan level industrial chains for dairy, rare earths, non-ferrous metals, modern coal chemicals, and photovoltaics.
* Manufacturing Upgrade:
* Implementation of industrial equipment updates and technical transformations.
* Cultivation of 50 advanced smart factories and 90 new green factories.
* Digital and intelligent transformation of metallurgy, chemical, and building material industries.
* Material Deep Processing: Enhancing deep processing of aluminum, copper, lead, zinc, magnesium, and lithium. Specifically mentioned are high-purity aluminum, copper-based alloys, and advanced battery materials.
* Regional Hubs:
* Baotou: Premium steel base and high-end aluminum post-processing.
* Ordos: High-alumina fly ash comprehensive utilization.
* Chifeng: Green lithium industry base and high-end non-ferrous metal aggregation zone.

Investment Implication:
Inner Mongolia’s focus on a "trillion-yuan PV chain" confirms its status as a global manufacturing hub for polysilicon, wafers, and modules. The emphasis on "smart factories" and "green factories" favors leading enterprises with capital advantages for technological upgrades. Guizhou’s target of 65 GW by 2030 provides a clear volume visibility for EPC contractors and module suppliers operating in Southwest China.

4. Historical Context: 2025 Installation Data

On February 21, 2026, the NEA released the final PV installation data for 2025, providing a baseline for future growth projections.

2025 PV Installation Summary:
* Total New Grid-Connected Capacity: 316.57 GW (316,574 MW).
* Centralized PV: 163.57 GW (51.7% of total).
* Distributed PV: 153.00 GW (48.3% of total).
* Household PV: 45.95 GW.

Analysis:
The 2025 data demonstrates a balanced growth between centralized utility-scale projects and distributed generation. The substantial share of distributed PV (nearly half) underscores the importance of residential and commercial & industrial (C&I) channels. For investors, this validates the business models of companies with strong distribution networks and household PV leasing platforms. The sheer scale of ~316 GW added in a single year highlights the maturity of the Chinese PV market and the urgent need for grid flexibility solutions (storage, VPPs) as emphasized in the recent policy documents.

Investment Logic and Strategy

Our Overweight rating is underpinned by a convergence of supply-side discipline, policy-driven demand, and technological evolution. We advise institutional investors to structure their portfolios around the following themes:

1. Supply-Side Reform and Profitability Repair

The era of unchecked capacity expansion is yielding to a phase of consolidation. The stabilization of polysilicon and module prices at ~56 CNY/kg and ~0.82 CNY/W respectively suggests that the market has absorbed much of the shock from previous oversupply.
* Logic: As weaker players exit or reduce output due to cash flow constraints, market share concentrates among top-tier manufacturers. These leaders benefit from economies of scale, lower cost of capital, and superior supply chain management.
* Focus: Leading polysilicon producers with low-cost advantages and integrated module giants with strong global branding.

2. Technological Iteration ($\alpha$ Opportunities)

The industry is transitioning from P-type PERC dominance to N-type technologies (TOPCon, HJT) and emerging BC (Back Contact) and perovskite tandem cells.
* Logic: Technology leaders can command price premiums and achieve higher conversion efficiencies, which are critical for land-constrained projects and zero-carbon parks. Equipment manufacturers enabling these transitions are seeing robust order books.
* Focus:
* Equipment Makers: Companies like Microdao Nano (ALD/CVD equipment) and DKEM (conductive paste) are benefiting from the material and process changes required by new cell architectures.
* Cell Tech Leaders: Firms actively deploying BC or HJT lines at scale.

3. Policy-Driven Demand ($\beta$ Opportunities)

The "15th Five-Year Plan" directives and provincial targets (Guizhou, Inner Mongolia) create a predictable demand floor.
* Logic: The shift towards "Wind-Solar-Hydrogen-Ammonia-Methanol" integration opens new addressable markets. PV is no longer just about electricity; it is about green feedstock for chemicals. Additionally, the push for zero-carbon parks drives high-quality distributed PV demand.
* Focus: Integrated energy service providers and companies with exposure to hydrogen/ammonia value chains.

4. Regional Industrial Clusters

Inner Mongolia’s commitment to a trillion-yuan PV chain reinforces the competitive moat of companies located there or sourcing from there.
* Logic: Proximity to raw materials (polysilicon, industrial silicon) and cheap green power lowers production costs. The government’s support for "smart factories" further widens the gap between automated leaders and manual laggards.

Risks / Headwinds

While the outlook is positive, investors must monitor the following risks which could derail the recovery trajectory:

1. Raw Material Price Volatility

Although prices are currently stable, the PV supply chain remains susceptible to sudden shocks.
* Risk: A resurgence in polysilicon prices due to unexpected production halts or a crash in silver prices affecting paste costs could disrupt margin forecasts. Conversely, if prices fall too sharply, it may indicate persistent oversupply, delaying profitability recovery.
* Mitigation: Monitor weekly price data from Datayes/Solarzoom closely.

2. Project Commencement Delays

Policy announcements do not immediately translate into installed capacity.
* Risk: If project approvals, land acquisition, or grid connection permits face bureaucratic delays, the expected demand surge in 2026-2027 may be pushed back. This would lead to inventory buildup for module manufacturers.
* Mitigation: Track monthly installation data from the NEA and corporate order backlog reports.

3. Intensifying Trade Frictions

The global trade environment for Chinese PV products remains contentious.
* Risk: Increased tariffs or non-tariff barriers in key markets such as the US, EU, or India could restrict export volumes. Given that Chinese manufacturers rely on global markets to absorb their massive capacity, any contraction in export channels would exacerbate domestic competition.
* Mitigation: Diversification of manufacturing bases (e.g., Southeast Asia, Middle East) by leading firms is a key factor to watch.

4. Technological Obsolescence

• Risk: Rapid shifts in technology (e.g., if perovskite commercializes faster than expected) could strand assets invested in current-generation TOPCon or HJT lines.
• Mitigation: Focus on companies with strong R&D spend and flexible manufacturing capabilities.

Rating / Sector Outlook

Sector Rating: Overweight (Positive)

We define "Overweight" as expecting the industry index to outperform the market benchmark by more than 5% over the next 6 months.

Outlook:
The PV sector is transitioning from a period of "price-driven contraction" to "value-driven recovery." The combination of stabilized prices, strong policy tailwinds from the 15th Five-Year Plan, and clear provincial capacity targets provides a solid foundation for growth. While short-term market sentiment may fluctuate (as seen in the -1.08% weekly dip), the fundamental drivers are strengthening.

Key Metrics to Watch:
* Polysilicon Price: Stability above 50 CNY/kg is healthy; significant drops below 45 CNY/kg may signal renewed distress.
* Module Tender Prices: Monitoring whether tender prices begin to inch up from the 0.82 CNY/W level, indicating improved bargaining power for manufacturers.
* Policy Implementation: Concrete bidding announcements for the "Wind-Solar-Hydrogen" bases mentioned by the NEA.

Investment View

Based on the analysis of market performance, supply chain dynamics, and policy catalysts, we recommend the following investment strategy for institutional portfolios:

1. Core Holdings: Industry Leaders with Integrated Advantages

Investors should maintain core positions in leading polysilicon and module manufacturers that have demonstrated resilience during the downturn. These companies are best positioned to benefit from supply-side consolidation and have the balance sheets to invest in the next generation of technology.
* Rationale: Market share concentration will accelerate as smaller players struggle with cash flow. Leaders in Inner Mongolia and other key clusters benefit from local policy support and cost advantages.

2. Satellite Positions: Technology Enablers and Niche Leaders

Allocate a portion of the portfolio to equipment and material suppliers driving technological iteration.
* Microdao Nano (688147.SH): Benefiting from the demand for atomic layer deposition (ALD) and other specialized equipment required for high-efficiency cell structures. Its strong weekly performance (+top gainer) reflects market confidence in its order book.
* DKEM (300842.SZ): As a leader in conductive paste, it benefits from the increased silver consumption per watt in N-type cells, although silver price stability is key.
* Deye Shares (605117.SH): Strong presence in inverters and energy storage, aligning with the "PV + Storage" and micro-grid trends emphasized in provincial plans.

3. Thematic Plays: Hydrogen and Integrated Energy

Given the NEA’s explicit mention of "Wind-Solar-Hydrogen-Ammonia-Methanol" bases, investors should consider companies with exposure to electrolyzers, hydrogen storage, or chemical integration.
* Strategy: Look for traditional PV players diversifying into hydrogen or specialized equipment makers expanding into electrolyzer production.

4. Avoid / Underweight: Pure Play Laggards

Companies lacking technological differentiation, high debt levels, or exposure to outdated production lines should be avoided. The recent underperformance of stocks like Topray Solar and Risen Energy serves as a cautionary tale. Without a clear path to cost leadership or tech innovation, these firms face margin squeeze in a stabilizing but still competitive market.

Conclusion

The week of February 9-13, 2026, marked a period of consolidation for the PV sector, with price stabilization providing a platform for future growth. The policy landscape has shifted decisively towards integrated, high-quality development under the 15th Five-Year Plan. While short-term market noise persists, the long-term trajectory is supported by robust domestic demand targets (Guizhou, Inner Mongolia) and strategic national initiatives (NEA).

We advise investors to look through the short-term volatility and position for the structural recovery led by supply-side reform and technological innovation. The focus should remain on quality, technology, and integration.

Disclaimer:
This report is prepared by Guoxin Securities Co., Ltd. for institutional clients only. The information contained herein is based on sources believed to be reliable, but Guoxin Securities does not guarantee its accuracy or completeness. The views expressed are those of the analyst and do not constitute an offer or solicitation to buy or sell any securities. Investors should conduct their own independent assessment and consult with their investment advisors before making any investment decisions. Guoxin Securities and its affiliates may hold positions in the securities mentioned and may engage in transactions inconsistent with the recommendations herein.

Analyst Certification:
I, Zhang Xinyi, certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. No part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.