Photovoltaic Industry Nirvana Rebirth

The news of Shunfeng Optoelectronics acquiring Suntech's Suntech at a cost of RMB 3 billion allowed the new round of consolidation in China's PV industry to start again. This once-starring industry is expected to “rebirth” after the winter. Although Zhongjian Photovoltaic has seen a round of correction in the recent period, the photovoltaic sector has remained the “star” in the general stock market this year. As investors are looking forward to the three quarterly report of the photovoltaic industry, the stock price of Zhongguang Solar is expected to surge in the near future.

Photovoltaic industry frequently blows warm air Before this time, the Ministry of Industry and Information Technology released "Regulations for Photovoltaic Manufacturing Industry", which clearly set strict quantitative standards for the scale, capacity, and performance of photovoltaic manufacturing companies. According to industry sources, the basic purpose of this document is to eliminate out-of-order low-level production capacity by improving standards in various aspects of the industry, and to accelerate the merger and reorganization of small and medium-sized photovoltaic companies at the same time.

In addition to being supported by policies, the strong performance of overseas PV companies also stimulated investors' confidence in China PV shares. The first quarterly solar company's recently released third-quarter financial report showed that the company achieved a net profit of 195 million US dollars, an increase of 122% over the same period of last year's 87.9 million US dollars. US First Solar also expects the company's annual earnings per share will reach 4.25 to 4.5 US dollars. FactSet survey shows that analysts had expected the company's annual earnings per share of 3.76 US dollars.

In fact, the global photovoltaic industry still faces problems such as excess capacity, excess inventory, and insufficient demand. However, Buffett’s patronage has also brought a positive impact on the photovoltaic industry's downstream market, encouraging more industrial investors. As early as the beginning of this year, Sino-U.S. Energy Holding Co., Ltd., a subsidiary of Buffett, invested not more than 2.5 billion U.S. dollars in the acquisition of the 579-megawatt Antelope Valley solar project from California Sunny Power Company. According to statistics, in the second quarter of this year, the US photovoltaic market continued to maintain a growth trend, and the installed capacity increased by 15% from the previous quarter.

The cumulative increase in photovoltaic stocks has been huge This year, the cumulative gains in the United States photovoltaic concept stocks show Buffett's unique investment perspective, both at the same time, whether the investment itself or the capital market, showing the recovery of this industry. Market data shows that the cumulative increase of the first solar company in the United States has reached 100% since the beginning of this year, and the cumulative increase in the share price of the United States SunPower Corporation has reached 416%.

In the absence of apparent bad news in the fundamentals of the industry, Zhongjian Photovoltaic Stocks has seen a round of correction in recent days. However, most of the photovoltaic companies will begin to announce their financial reports in late November and investors will start to swear. Deutsche Bank analyst Shahe believes that the third-quarter earnings report may become a catalyst for China-based PV shares, and investors should buy it off.

Despite a certain degree of correction, Zhongfa Photovoltaic is still one of the brightest sectors in the general stock market this year. Apart from Suntech, this year, most of China PV companies’ stocks have risen sharply. Among them, Hanwha Solar’s ​​share price has risen by 350%, JinkoSolar’s ​​shares have increased by 299%, Big Brand New Energy has increased by 287%, and Trina Solar has risen by 255%. Up 200%, Yingli New Energy rose 173%.

Some analysts believe that Zhongguan Photovoltaic shares have a good chance of maintaining their good performance this year, but due to the overcapacity of the "illness" is still far from being cured, the industry and related stocks still have greater uncertainty this year. The fourth quarter's stock price trend may be more dependent on the performance of specific companies, after the more obvious industry "same rise or fall" trend may end.