HK Stock Market Move | Photovoltaic stocks collectively declined, rumors of production cuts may not affect short-term supply and demand. The market is concerned about the extent to which supply-side production cuts will materialize.

Photovoltaic stocks collectively declined. As of the time of writing, XINYI SOLAR (00968) fell by 7.52% to HK$2.09; FLAT GLASS (06865) fell by 4.43% to HK$6.47; Triumph New Energy (01108) fell by 2.13% to HK$2.76. On the news front, last week, rumors of the imminent implementation of mandatory energy efficiency standards throughout the entire photovoltaic industry and the possible elimination of around 30% of outdated production capacity stimulated the photovoltaic sector. According to Guangfa Futures, according to SMM statistics, the annual production capacity of photovoltaic modules has exceeded 1000GW, with a production output of 36.36GW for May and a utilization rate of only about 35%, most of which is efficient production capacity. The elimination of inefficient production capacity is not expected to have a short-term impact on supply and demand. Dongzheng Futures stated that most photovoltaic glass manufacturers are no longer willing to sell at low prices and have a strong intention to support prices. The key variable for the future market trend still lies in the extent to which the reduction in supply is implemented. If the reduction plan progresses as scheduled, prices are expected to reach a bottom and rebound; if expectations are not met, prices will be under pressure again due to high inventory levels.