Shenwan Hongyuan Group: Xinjiang is expected to achieve ecological transformation and upgrade of the photovoltaic industry, focusing on the low-cost and integrated enterprises in the middle of the production chain.

Shenwan Hongyuan Group released a research report stating that Xinjiang is accelerating the construction of a photovoltaic industry cluster with national influence, thanks to its unique CECEP Solar Energy resources, vast desert land, and continuously improving policy support system. Although there is currently pressure on overcapacity and price declines in the upstream industrial silicon and polysilicon sectors, as the manufacturing capacity in the middle and lower reaches gradually improves and the regional coordinated development mechanism continues to be perfected, Xinjiang is expected to achieve a transformation and upgrade from a resource-based export base to an efficient and full-chain photovoltaic industry ecosystem. The report focuses on low-cost and integrated enterprises in the middle reaches of the manufacturing process and recommends paying attention to photovoltaic companies that have a deep layout in Xinjiang, possess resource integration capabilities, and benefit from local policy support. Key points from Shenwan Hongyuan Group: Xinjiang's photovoltaics have three advantages of resources, land, and policies, and the regional industrial chain is accelerating formation. Xinjiang has formed the embryonic form of a complete photovoltaic industry chain from raw materials to component manufacturing, with the potential to transform into an efficient and full-chain photovoltaic industry ecosystem. Currently in the stage of upstream excess capacity clearance, it is recommended to layout in the middle and downstream high-efficiency manufacturing processes. Although the upstream sectors such as industrial silicon and polysilicon face overcapacity and pricing pressure in the short term, there is an accelerating trend in the construction of middle-tier modules and cell slices, and middle-tier manufacturing companies with strong cost, location, and policy advantages are expected to first experience valuation repair. Expanding local consumption of "eastern calculation and western calculation" and "green computing power" to relieve the bottleneck of external delivery. With the accelerated layout of green data centers and green computing power parks in the western region, the continuous expansion of local on-site consumption of clean energy is expected to relieve the pressure of ultra-high voltage external delivery, further enhancing the economic viability and marginal benefits of photovoltaic projects in Xinjiang. The dual security value of energy and industry is highlighted, with long-term strategic significance in configuration. In the context of increasing risks of extreme weather and geopolitical risks, Xinjiang, as a national strategic base for clean energy, plays an important role in ensuring stable power supply and independent industrial substitution. Its transformation from a resource-based to a manufacturing-based process will enhance the resilience of the supply chain of Shanxi Guoxin Energy Corporation. Risk warning: Economic recovery is lower than expected, regional investment in Xinjiang is lower than expected, and orders of listed companies are lower than expected.