Is the PV market going to be a blip?

On October 14th, Sungrow Power released a forecast for the first three quarters of the year, stating that it is expected that the net profit attributable to shareholders of the listed company will be 105 million to 118 million yuan, an increase of 70% to 90% year-on-year. Yiwei Lithium Energy also recently stated that its revenue for the first three quarters of 2013 is expected to be 679 million to 719 million yuan, an increase of 70% to 80% year-on-year, and a net profit attributable to the shareholders of the listed company was 94,944,800 to 10,106.81 million yuan. An increase of 55% - 65%. Compared to the almost stagnant growth, the photovoltaic market seems to have ushered in spring this year.

The policies have been favorable for many years. The global, especially the domestic photovoltaic industry, has seen explosive growth, which has caused the market to be in a state of disorderly competition. The oversupply of photovoltaic products and the fierce competition in low-price markets has also caused PV companies to fall into operational difficulties.

Since the beginning of this year, China's photovoltaic industry has witnessed a frequent warming of the industrial policy, and it has been steadily increasing guidance and support for market rectification.

Following the State Council's June and July launch of the “National Six-point Photovoltaic” and promotion of industrial health development, a number of domestic photovoltaic policies have been introduced intensively.

The reporter found that in September alone, the relevant ministries released three documents on the photovoltaic industry. On September 17, the Ministry of Industry and Information Technology promulgated the “Regulations for Photovoltaic Manufacturing Industry” to urge the strengthening of the management of the photovoltaic manufacturing industry, standardize the development of the industry, and promote the transformation and upgrading of the photovoltaic industry. On September 24, the National Energy Administration issued the Interim Measures for Project Management of Photovoltaic Power Plants to regulate the management of photovoltaic power plant projects. On September 29, the Ministry of Finance issued the Notice on Photovoltaic Power Generation Value-Added Tax Policy, which implements a policy of 50 percent refund of VAT on solar power products.

These policies have promoted the healthy development of the industry from various aspects such as access standards for photovoltaic market, photovoltaic power generation prices, photovoltaic industry manufacturing specifications, and photovoltaic power station projects.

"Because of favorable policies, the fundamentals of the photovoltaic industry may materially improve in the second half of the year, and the photovoltaic market is expected to regain its upward momentum." Analysts of Minsheng Securities believe that with the support of the country's macroeconomic policies, the domestic photovoltaic industry has achieved significant improvement.

Cinda Securities researcher believes that continued policy support will enable the photovoltaic market to be sustainable in the short-to-medium term. It is recommended that investors continue to pay attention to investment opportunities brought about by policy promotion and industry improvement.

Whether sustainability can be achieved depends on the multiple benefits of the company at the policy level. Many photovoltaic-related companies such as Sungrow Power, Aerospace, Manchukuo, TBEA, Zhongli Technology, Dongfang Risheng, Hairun Photovoltaic and Zhonghuan have access to a wide range of institutions. It is optimistic that stocks are highly rated, buy, and other positive ratings.

However, some market analysts pointed out that the improvement in the performance of the photovoltaic industry directly benefits from continuous support at the policy level, and the market is only indicative of the policy market, and whether the latter can continue to be further adjusted by the photovoltaic market itself. Reports from the photovoltaic industry released by a number of institutions reviewed by our reporter found that most of the risk warnings in the PV industry are also lower than expected due to national policy support.

According to the results of the first three quarters of the solar photovoltaic power generation company, which is the leading manufacturer of photovoltaic equipment, its net profit attributable to shareholders of listed companies was 105 million to 118 million yuan, an increase of 70% to 90% year-on-year. Fund interest income and government subsidies amounted to about 42 million yuan, accounting for nearly half of its net profit.

“The majority of photovoltaic companies can rely on government subsidies to achieve profitability, and leave policy support. Some photovoltaic companies may fail immediately.” Northeast Securities Industry analysts told this reporter that the recent improvement in the photovoltaic market has mainly benefited from the national policy level. With the support of the entire photovoltaic market, the market has not completely gone out of adjustment. The industry's market access and regulatory mechanisms have not yet been perfected. Enterprises need to improve the mechanism for elimination of competition. In the long run, the key to the healthy development of photovoltaic companies depends on the The sound mechanism of the photovoltaic market and the photovoltaic company's own business development.

What is gratifying is that recently the government's frequent introduction of photovoltaic policies is not limited to providing support for photovoltaic companies. Instead, it proposes market-based competition for the survival of the fittest and provides detailed regulations on market access, market regulations and subsidies.

What is certain is that the management documents of the relevant government departments to promote the transformation and upgrading of the photovoltaic industry have been successively introduced. The wave of mergers and acquisitions in the photovoltaic industry will also be imperative. It is also necessary to see whether photovoltaic companies, including listed companies, can maintain sustained growth in their performance over the long term. The company's own innovation and development capabilities.