Photovoltaic Industry Weekly Report: Stabilization Amidst Policy Tailwinds and Structural Shifts

Date: September 15, 2025
Source: Guoxin Securities Market Research Department
Analyst: Zhang Xinyi (S1490522090001)
Rating: Overweight (Positive Outlook)

Executive Summary

The Chinese photovoltaic (PV) sector exhibited a divergent performance during the week of September 8–12, 2025. While the broader market, represented by the CSI 300 Index, advanced by +1.38%, the Shenwan Photovoltaic Equipment Index declined by -3.28%, underperforming the broader Power Equipment Index (+0.53%) and significantly lagging the market benchmark by 0.85 percentage points. This short-term volatility occurs against a backdrop of stabilizing supply chain prices and robust policy support aimed at integrating artificial intelligence (AI) into energy systems and sustaining growth in new energy equipment revenue.

Our analysis indicates that the PV sector has likely bottomed out following recent corrections. The stabilization of main-chain prices—specifically silicon material, wafers, cells, and modules—suggests that the intense price wars of previous periods are abating, allowing margins to find a floor. Concurrently, significant policy directives from the National Development and Reform Commission (NDRC), the National Energy Administration (NEA), and the Ministry of Industry and Information Technology (MIIT) are creating new demand vectors through "AI + Energy" initiatives, infrastructure integration, and targeted export expansion.

We maintain an Overweight rating on the sector. Investors are advised to pivot towards companies with high proportions of N-type product capacity and those leading in next-generation technologies such as perovskite solar cells. The investment thesis is supported by three core pillars: price stabilization across the value chain, policy-driven demand expansion in domestic and international markets, and technological differentiation favoring high-efficiency manufacturers. However, risks related to raw material volatility, project execution delays, and escalating trade friction remain pertinent headwinds that require careful monitoring.

Key Takeaways

1. Market Performance: Sector Rotation and Individual Stock Divergence

The week witnessed a broad-based rally in the A-share market, with 26 out of 31 Shenwan industry indices posting gains. The Power Equipment sector, however, showed mixed results, ranking 22nd among all industries with a modest gain of +0.53%. Within this secondary industry classification, performance was fragmented:

• Outperformers: The Motor II index surged by +10.76%, followed by Other Power Equipment II (+3.73%), Battery (+1.28%), and Grid Equipment (+1.02%).
• Underperformers: The Photovoltaic Equipment index fell by -3.28%, and Wind Power Equipment declined by -2.04%. Notably, "Other Power Equipment" was the only sub-sector to decline in some classifications, but in the detailed breakdown, PV and Wind were the clear laggards within the broader power equipment complex.

Table 1: Weekly Performance of Power Equipment Sub-Sectors (Sep 8–12, 2025)

Source: Wind, Guoxin Securities

At the individual company level, the divergence highlights a market preference for specific technological niches and material suppliers over integrated module makers or pure-play polysilicon producers during this period.

• Top Gainers: The leading performers included Microdao Nano (micro-nano processing equipment), Mubang High-Tech, Jinbo Shares (carbon-based materials), Polymer Materials, and Lianhong New Material. These gains suggest investor interest in upstream materials and specialized equipment providers that may benefit from technology upgrades (such as the shift to N-type cells) rather than just volume expansion.
• Top Decliners: Significant losses were observed in Airo Energy, Daqo New Energy (polysilicon producer), Tongxiang Technology, Optimux, and Ainengju. The decline in major polysilicon players like Daqo, despite a slight uptick in silicon prices, may reflect lingering concerns over inventory levels or long-term margin compression in the upstream segment.

2. Supply Chain Price Analysis: Stabilization Across the Main Chain

A critical development this week is the stabilization of prices across the entire PV manufacturing value chain. According to data from Datayes and Solarzoom as of September 10, 2025, prices for key components have ceased their downward trajectory, indicating a potential equilibrium between supply and demand.

Table 2: PV Supply Chain Price Trends (as of Sep 10, 2025)

Source: Datayes, Solarzoom, Guoxin Securities

Detailed Analysis of Price Dynamics:

• Polysilicon: The price increased by CNY 1/kg to reach CNY 49/kg. This marginal increase is significant as it breaks the streak of price declines or stagnation. It suggests that upstream producers are successfully managing output or that downstream demand is absorbing existing inventory at a steady pace. For investors, this signals that the worst of the upstream price erosion may be over, potentially stabilizing revenues for major silicon producers, although margins remain tight compared to historical highs.
• Wafers, Cells, and Modules: Prices for silicon wafers (CNY 1.40/piece), cells (CNY 0.29/W), and modules (CNY 0.69/W) remained flat week-over-week. The stability at these levels is crucial for mid-stream and downstream manufacturers. It provides visibility for revenue forecasting and reduces the risk of inventory write-downs. The module price of CNY 0.69/W remains at a historically low level, which continues to drive global demand competitiveness but limits profit expansion for integrators unless cost reductions in non-silicon components (like glass or silver paste) continue.
• Auxiliary Materials: PV glass prices (19.5 CNY/sqm for 3.2mm and 13 CNY/sqm for 2mm) and silver paste (10,123 CNY/kg) also held steady. The stability in silver paste is particularly notable given the fluctuating prices of industrial metals globally; this consistency helps manufacturers manage the bill of materials (BOM) costs more effectively.

Investment Implication: The broad-based price stabilization supports the view that the sector is in a "bottoming" phase. While aggressive price hikes are unlikely due to ample capacity, the cessation of price wars removes a major overhang on equity valuations. Companies with superior cost control can now begin to realize stable, albeit modest, margins.

3. Policy Catalysts: Strategic Drivers for Future Growth

Three major policy announcements this week provide a robust framework for medium-to-long-term growth in the PV and broader new energy sectors. These policies address demand creation, technological integration, and international expansion.

A. "AI + Energy" Integration: Enhancing Efficiency and Value

On September 8, the NDRC and NEA released the "Implementation Opinions on Promoting the High-Quality Development of 'Artificial Intelligence + Energy'." This document marks a strategic shift from mere capacity expansion to intelligent, efficient energy management.

• Core Mechanism: The policy promotes the use of AI to optimize energy dispatch based on real-time data from PV and storage devices. Specifically, it highlights the deployment of park-level intelligent carbon reduction collaborative control systems. These systems dynamically adjust energy scheduling by integrating electricity pricing and carbon emission factors.
• Operational Impact: The technology enables automatic regulation of air conditioning temperatures, charging pile power, and equipment start/stop sequences. Furthermore, it utilizes augmented reality (AR) interfaces and voice assistants to provide personalized energy-saving recommendations to users.
• Strategic Goal: The formation of a "Carbon-Energy-Cost" intelligent synergy model. This creates a new value proposition for PV installations, moving beyond simple generation to active grid participation and cost optimization.
• Equipment Maintenance: The policy also mandates the acceleration of AI in equipment status evaluation and smart operation/maintenance (O&M). This includes intelligent sensing, fault diagnosis, predictive maintenance decision-making, disaster risk prediction, and automated work ticket generation.
• Investment Angle: This favors companies involved in smart inverters, energy management systems (EMS), and AI-driven O&M software. It also benefits PV manufacturers who can integrate their hardware with these digital platforms, creating a sticky ecosystem rather than a commoditized product.

B. Stable Growth Work Plan (2025–2026): Revenue and Export Targets

On September 12, the MIIT, State Administration for Market Regulation, and NEA issued the "Work Plan for Steady Growth in the Power Equipment Industry (2025–2026)." This plan sets explicit quantitative targets and qualitative directions for the industry.

• Quantitative Targets:

  • Traditional Power Equipment: Annual average revenue growth of approximately 6%.
  • New Energy Equipment: Revenue to remain stable with an upward trend.
  • Advanced Manufacturing Clusters: Annual average revenue growth of approximately 7%.
  • Leading Enterprises: Annual average revenue growth of approximately 10%.
  • Exports: Explicit goal to achieve growth in new energy equipment exports.

• Domestic Demand Expansion:

  • Large-Scale Bases: Accelerate the construction of large-scale wind and PV bases on land.
  • Offshore Wind: Promote standardized and orderly construction of offshore wind power.
  • Distributed Generation: Actively advance distributed development of wind and PV, as well as integrated hydro-wind-solar development.
  • Coal Power Retrofitting: Continue the "three reforms linkage" (energy saving, heating supply, flexibility) for coal power, ensuring grid stability as renewable penetration increases.
  • Grid Enhancement: Approve and construct key power mutual aid projects to optimize national power system design. Promote smart microgrids and energy storage applications on both the power source and grid sides to enhance the grid's ability to accept, configure, and regulate clean energy.

• International Market Expansion:

  • Global Green Transition: Actively participate in the global green low-carbon transition, strengthening cooperation in green infrastructure and new infrastructure.
  • Emerging Markets: Deepen full-industry-chain cooperation with emerging market countries in wind, PV, and storage.
  • "Going Global" Strategy: Encourage energy developers, equipment manufacturers, and financial institutions to form consortia for overseas expansion. Support component manufacturers in integrating into overseas supply chains.

• Investment Angle: The explicit target for export growth and the support for "consortium-style" overseas expansion mitigate the risk of isolated trade barriers. Companies with strong international distribution networks and those capable of offering integrated solutions (generation + storage + grid services) are best positioned to capture this growth. The focus on "leading enterprises" achieving 10% growth suggests a continued consolidation trend where market share shifts to top-tier players.

C. Transport-Energy Infrastructure Integration

On September 12, the Ministry of Transport issued the "Guidelines for Declaration of Pilot Directions for Building a Transportation Powerhouse (2025)."

• Core Initiative: Promote the integrated construction of transportation and energy infrastructure.
• Key Projects: Construction of "Source-Grid-Load-Storage-Charging" projects. This holistic approach integrates renewable energy generation (Source), grid connection, consumption (Load), storage, and electric vehicle charging.
• Innovation: Develop innovative fusion development models and policy mechanisms. Build comprehensive energy supply stations.
• Zero-Carbon Infrastructure: Create (near) zero-carbon transportation infrastructure by promoting the nearby local development and utilization of clean energy.

• Technology Adoption: Promote new technologies such as flexible aggregation access for new energy, distributed smart microgrids, and virtual power plants (VPPs).

• Investment Angle: This opens a vast new application scenario for PV modules and storage systems along highways, railways, ports, and airports. It drives demand for distributed PV solutions and charging infrastructure that can interact with the grid via VPP technology.

Risks / Headwinds

While the outlook is positive, institutional investors must account for several persistent risks that could derail the recovery trajectory:

1. Raw Material Price Volatility:
   Although prices stabilized this week, the PV supply chain remains sensitive to fluctuations in the costs of polysilicon, silver, and aluminum. A sudden spike in silver prices, for instance, could erode margins for cell and module manufacturers, especially given the high silver consumption in TOPCon and HJT technologies. Conversely, a renewed drop in polysilicon prices could trigger inventory write-downs for upstream players.

2. Project Commencement Below Expectations:
   The realization of demand depends heavily on the timely execution of large-scale base projects and distributed installations. Delays in land acquisition, grid connection approvals, or financing could lead to project commencements falling short of the ambitious targets set in the "Stable Growth Work Plan." If domestic installation rates lag, the anticipated absorption of capacity will not materialize, prolonging the supply-demand imbalance.

3. Intensification of Trade Frictions:
   Despite the policy push for export growth, the geopolitical landscape remains fraught. The EU, US, and other markets may impose stricter tariffs, anti-subsidy investigations, or local content requirements on Chinese PV products. An escalation in trade barriers could severely impact the revenue streams of companies heavily reliant on overseas markets, forcing them to accelerate costly overseas manufacturing localization efforts.

4. Technological Obsolescence Risk:
   The rapid transition to N-type technologies (TOPCon, HJT) and the emerging promise of perovskite cells mean that companies with significant legacy P-type capacity face the risk of asset stranding. Failure to keep pace with technological iterations could lead to competitive disadvantage and margin compression for laggards.

Rating / Sector Outlook

Sector Rating: Overweight (Positive)

We reaffirm our Overweight rating on the Photovoltaic Equipment sector. The combination of price stabilization, supportive policy frameworks, and technological evolution creates a favorable risk-reward profile for long-term investors.

Outlook Summary:
* Short-Term (1-3 Months): Expect continued volatility as the market digests the earnings implications of the current price levels. However, the downside is limited by the established price floor. Focus will be on Q3 delivery numbers and order books for 2026.
* Medium-Term (6-12 Months): The implementation of the "AI + Energy" and "Stable Growth" policies should begin to translate into tangible order flows. The differentiation between leaders and laggards will widen, with leaders benefiting from economies of scale and technological premiums.
* Long-Term (1-3 Years): The sector is poised for sustainable growth driven by global decarbonization trends, the integration of storage, and the emergence of new application scenarios (transport-energy integration). The industry structure will likely consolidate further around a few dominant, technologically advanced players.

Investment View

Based on the current market dynamics and policy landscape, we recommend a barbell strategy focusing on technological leadership and niche equipment/material suppliers.

1. Core Investment Logic

• Bottoming Out of Cycle: The stabilization of prices across silicon, wafers, cells, and modules indicates that the industry has passed the most painful phase of price erosion. Profitability is expected to stabilize, providing a solid foundation for valuation repair.
• Policy-Driven Demand Visibility: The explicit government targets for new energy equipment revenue growth and the push for "AI + Energy" provide a clear demand roadmap. The emphasis on "Source-Grid-Load-Storage-Charging" integration creates new, high-value markets beyond traditional utility-scale PV.
• Technological Alpha: The shift to N-type cells is no longer optional but mandatory for competitiveness. Companies with high N-type production ratios will enjoy higher efficiency premiums and better market access. Additionally, early movers in perovskite technology stand to capture significant upside as this next-gen technology approaches commercialization.

2. Recommended Themes and Targets

A. Leaders in N-Type Technology

Investors should prioritize companies with high proportions of N-type (TOPCon/HJT) product capacity. These firms are better positioned to maintain margins and capture market share as older P-type capacity becomes obsolete.
* Focus: Look for integrated manufacturers with strong R&D capabilities and proven mass-production yields for N-type cells.
* Rationale: Higher efficiency translates to lower Levelized Cost of Electricity (LCOE) for end-users, making these products preferred in both domestic and international tenders.

B. Innovators in Next-Generation Technologies (Perovskite)

Companies with leading layouts in perovskite solar cells represent a high-growth option.
* Focus: Firms actively investing in perovskite R&D, pilot lines, and tandem cell technologies.
* Rationale: Perovskite offers the potential for significantly higher efficiencies and lower manufacturing costs in the long run. Early leaders will establish intellectual property moats and first-mover advantages.

C. Specialized Equipment and Material Suppliers

The weekly performance of stocks like Microdao Nano and Jinbo Shares highlights the resilience of the upstream equipment and materials sector.
* Focus: Suppliers of critical processing equipment (e.g., ALD, PVD for N-type cells) and key materials (e.g., carbon composites, specialized polymers).
* Rationale: As manufacturers upgrade their lines to N-type standards, they must purchase new equipment. This creates a recurring revenue stream for equipment vendors that is less cyclical than module sales. Furthermore, material suppliers with unique proprietary technologies can command higher margins.

3. Strategic Allocation Advice

• Accumulate on Weakness: Given the recent underperformance of the PV index (-3.28% vs. +1.38% for CSI 300), current valuations offer an attractive entry point for long-term capital.
• Differentiate Between Upstream and Mid/Downstream: Be cautious with pure-play polysilicon producers unless they have significant cost advantages. Prefer integrated players or those with strong downstream brand channels and overseas presence.
• Monitor Policy Implementation: Track the rollout of specific "AI + Energy" pilot projects and the approval rates for large-scale wind/PV bases. These will be key leading indicators for order growth in late 2025 and 2026.

Conclusion

The photovoltaic industry stands at a pivotal juncture. The convergence of price stabilization, robust policy support, and technological maturation suggests that the sector is transitioning from a phase of chaotic expansion to one of quality-driven growth. While risks such as trade friction and execution delays persist, the fundamental drivers for global solar adoption remain intact. Institutional investors are well-advised to maintain an overweight position, focusing on companies that demonstrate technological superiority, operational efficiency, and strategic alignment with the new "AI + Energy" paradigm. The current market correction provides a compelling opportunity to build positions in high-quality assets before the next cycle of growth fully manifests.