A year after the market value evaporated 660 billion, photovoltaic cycle turning point?


Since the second half of 2022, photovoltaic stocks have entered a downward phase.

In a year's time, the share price of Longi Green Energy, the battery leader, halved, and the market value evaporated more than 230 billion; Silicon giant Tongwei shares fell 40%, the peak market value of nearly $100 billion. In addition, GCL Technology, Daqo Energy, Hesheng Silicon and other photovoltaic industry leaders ushered in a sharp decline.

According to the statistics of only 35 A-share listed companies in the photovoltaic industry chain, from June 30, 2022 to June 30, 2023, the market value of the photovoltaic industry chain evaporated 659.794 billion yuan.

After a year of slump, the valuation of listed photovoltaic companies has also reached a historic low. Photovoltaic leader Longi Green Energy is only valued at 15 times earnings, while Tongwei shares are valued at a record low of about 5 times. In this case, the expectation of photovoltaic reversal is gradually becoming clear.

Recently, the photovoltaic industry chain has frequently changed. On July 10, Longi Green Energy and Tongwei shares, two leading photovoltaic stocks with hundreds of billions of market value, rose 8.52% and 7.27%, respectively, shaking the entire industrial chain. With the photovoltaic dragon turning over, the market has shouted: the turning point of the photovoltaic cycle has come.

So, is the cycle turning point of photovoltaic really coming?

This article has the following views on the photovoltaic industry:

1, compared with the last round of photovoltaic cycle, the new round of photovoltaic cycle from the end of 2022 is short and violent: in only 6-7 months, the price of silicon fell by nearly 80%, the price of silicon wafers fell by more than 60%, and the price of batteries and modules fell to different degrees. From the numerical point of view, the price of silicon material in the upstream of the photovoltaic industry chain has approached the lowest point of the last cycle, and the degree of correction has far exceeded the previous round. From this point of view, silicon prices out of the bottom is in line with expectations.

2, in fact, in the past two weeks, silicon prices have indeed shown a trend of stabilization and recovery. It is particularly noteworthy that the price of N-type silicon has achieved a month-on-month increase for two consecutive weeks. Even if the prices of silicon wafers, batteries, and modules have not stopped falling, the recovery of silicon prices at the top of the industry chain has been regarded by the market as a signal of the cyclical inflection point of the photovoltaic industry chain. In the mood, valuation, expectations of triple low photovoltaic stocks also gradually out of the bottom.

3, this round of photovoltaic cycle is significantly different from the previous round, this round of the cycle does not exist a sharp decline in demand. On the contrary, global PV demand has always been high, which fundamentally inhibits the formation of long cycles. In addition, TOPCon accelerated the application of new technology, downstream demand is hot, led to the "K-type recovery" of silicon. At the same time, TOPCon's efficiency premium further suppressed the decline in the price of the photovoltaic industry chain, driving the industry chain out of the trough.

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