Guotai Junan: The bottoming out of the photovoltaic industry reveals opportunities for stabilization of sectors. Focus on optimizing supply-demand dynamics and advancements in new technologies.

Guotai Junan Securities released a research report stating that the current photovoltaic sector is already at the expected bottom position, with the industry fundamentals stabilizing, positive changes in the supply side are occurring, and the expectation of industry prosperity and supply-demand improvement continues to rise. The sector opportunities are expected to emerge, maintaining a positive rating for the industry. The key areas to focus on are: 1) Continuous decrease in inventory, battery, silicon wafer, and photovoltaic glass segments are expected to see improvements in profitability, as well as leading companies with superior competitive positions in each segment. 2) Continuous breakthrough in new technologies, such as BC battery component efficiency advantage leading, copper paste, and screen printing technologies gradually being applied. Guotai Junan Securities' main points are as follows: The recovery in the photovoltaic sector's prosperity continues, and the industry's self-discipline effects are gradually becoming evident. With the continuous progress of industry self-discipline, before and after the Spring Festival, prices in the entire photovoltaic industrial chain have begun to show a comprehensive increase. According to infolink quotations, prices of photovoltaic silicon wafers and battery wafers have recently risen significantly; weekly quotations for various grades of silicon materials have also shown a comprehensive increase; in the latest bidding for components, leading companies in the industry have responded positively to the association's call for prices above costs, and prices in overseas markets such as Europe have also begun to show signs of rising. The first quarter is currently in the off-season for the photovoltaic industry, but with the continuous progress of industry self-discipline, the industry's inventory is already at a healthy level, even reaching a bottom stage, and prices are beginning to rise. The bank judges that with the subsequent recovery in demand and the promotion of industry self-discipline and supply-side reform, prices in the photovoltaic industrial chain are expected to enter a comprehensive upward trend. As the industry stabilizes at the bottom, sector opportunities are emerging, with a focus on optimizing supply-demand patterns and advancing new technologies. The photovoltaic sector is already at the expected bottom, the industry fundamentals are stabilizing at the bottom stage, positive changes in the supply side are beginning to show gradually, and with the subsequent industry prosperity, prices and profitability are gradually recovering, along with the continuous improvement in supply-demand expectations, sector opportunities are expected to emerge. It is recommended that investors focus on optimizing supply-demand patterns and breakthroughs in new technologies in two key areas: 1) Continuous decrease in inventory, profitability expected to improve in the battery, silicon wafer, glass segments, and leading companies with superior competitive positions in each segment. 2) Continuous breakthroughs in new technologies, with BC battery components leading in efficiency advantages, and technologies such as copper paste and screen printing gradually being applied. Catalysts: Recovery in industrial chain prices, issuance of supply-side guidance policies, accelerated breakthroughs in new technologies. Risk factors: Demand falling short of expectations; deterioration in the competitive landscape leading to further price declines; trade barriers.