China’s solar industry faces one of its toughest battles yet—managing chronic overcapacity. Despite Beijing’s renewed push to curb “involutionary” competition and coordinated supply reductions by manufacturers, history shows limited progress. CFRA’s latest thematic research dives into the underlying risks, structural challenges, and company-level implications across the solar value chain.
Key insights include:
- Persistent Oversupply: Despite short-term price rebounds in polysilicon and wafers, we expect historically low prices to persist, putting pressure on earnings.
- Winners & Losers: Our analysis highlights potential upside for Tongwei Co., Ltd. as supply cuts improve sentiment, while JA Solar Technology, LONGi Green Energy, and TCL Zhonghuan face continued headwinds.
- Government & Market Dynamics: Limited enforcement, local government incentives, and China’s strategic reliance on solar as part of its “new three” industries complicate capacity rationalization efforts.
- Investor Implications: Understanding which players are positioned to weather oversupply—and which remain exposed—is critical as policy signals and market sentiment evolve.
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