HK Stock Market Move | Photovoltaic stocks are mostly rising. The expected reduction in export tax rebate rates is expected to benefit the long-term development of the photovoltaic industry. Signals of a turning point in the industry are emerging.

Photovoltaic stocks mostly rose, as of the time of writing, FLAT GLASS (06865) rose 3.99% to HK$13.04; XINYI SOLAR (00968) rose 3.77% to HK$3.3; XINTE ENERGY (01799) rose 2.64% to HK$8.54; GCL TECH (03800) rose 2.13% to HK$1.44. On the news front, on November 15, the Ministry of Finance and the State Administration of Taxation issued the "Announcement on Adjusting the Export Tax Rebate Policy", proposing to reduce the export tax rebate rate for some products including photovoltaic (cells, modules) from 13% to 9% starting from December 1, 2024. CITIC SEC believes that although the adjustment of the photovoltaic export tax rebate rate may cause a pulse-like impact on manufacturers' profits in the short term, the actual impact is relatively small. Top manufacturers have strong capabilities to drive product downstream pricing, stabilize international market prices of photovoltaic products, avoid internal circulation and external drainage, accelerate the clearance of outdated industry capacity, achieve high-quality development, and benefit the strengthening of leading players in the long term. HAITONG INT'L pointed out that looking at 52 photovoltaic companies as samples, the aggregate net profit attributable to the parent company for Q2 and Q3 of 2024 were -28.11 billion yuan and 6.69 billion yuan, respectively, with an improvement in Q3 compared to Q2; according to Infolink Consulting, the price of polysilicon has started to stabilize since Q2. From the comprehensive perspective of company profits and industry chain price trends, the industry has entered a downturn cycle since Q3 of 2022, and the industry has reached the bottom cycle in 2024 Q2 and Q3. HSBC Research report pointed out that the worst period for the CECEP Solar Energy industry has roughly passed, and it is optimistic about the market leadership positions of Xinxi and Flat Glass Group.