Understanding the Market | Xinyi Solar's stock price falls by over 6%, slowing down the decline in photovoltaic glass inventory. The industry's new production capacity coming online one after another may lead to oversupply
Xinyi Solar Energy fell more than 6%, as of the time of publication, it fell by 6.09% to HKD 5.55, with a turnover of HKD 274 million. On the news front, CICC recently pointed out in a research report that the rapid destocking of photovoltaic glass in March exceeded expectations, driving a 2.9% price increase in April, coupled with the decline in raw material prices, industry profit margins have significantly rebounded. However, the bank believes that there is currently a large amount of capacity under construction in the industry, which will soon lead to a significant increase in capacity, but the likelihood of demand continuing to rise significantly on a high base is low, therefore the industry will face oversupply again in the second half of the year, especially in the fourth quarter. The bank downgraded Xinyi Solar Energy's rating to "Neutral". In addition, according to Zhuochuang Information, with the recent launch of domestic terminal power station projects and follow-up orders from overseas, demand is gradually picking up. Component manufacturers have sufficient follow-up orders and smooth shipments. However, downstream pricing pressure is evident, with limited profit margins in the component segment. Therefore, with the rise in glass prices, most manufacturers adhere to just-in-time procurement, with only a few manufacturers stocking up in moderation, and glass manufacturers prioritize order execution, slowing down inventory reduction
According to the Wise Finance APP, Xinyi Solar (00968) fell more than 6%, as of the time of publication, it dropped by 6.09% to HKD 5.55, with a turnover of HKD 274 million.
On the news front, CICC recently pointed out in a research report that the rapid destocking of photovoltaic glass in March exceeded expectations, driving a 2.9% price increase in April. Coupled with the decline in raw material prices, industry profit margins have significantly rebounded. However, the bank believes that there is currently a large amount of capacity under construction in the industry, which will soon be put into operation. The likelihood of demand continuing to increase significantly on a high base is low, so the industry will face oversupply again in the second half of the year, especially in the fourth quarter. The bank downgraded Xinyi Solar to "Neutral".
In addition, according to Zhuochuang Information, with the recent launch of domestic terminal power station projects and follow-up of overseas orders, demand is gradually picking up. Component manufacturers have sufficient follow-up orders and smooth shipments. However, there is a clear downward pressure on prices downstream, and the profit margin in the component segment is limited. Therefore, with the rise in glass prices, most manufacturers adhere to just-in-time procurement, with only a few manufacturers stocking up in moderation. Glass manufacturers prioritize order execution, leading to a slowdown in inventory reduction
