Li Wenjie, Deputy General Manager of Investment Banking
Department III and Sponsored Representative at Guotai Haitong
Cyclical Fluctuations: The "Song of Ice and Fire" in the PV Industry
The era of "expanding production capacity, cutting prices, and seizing markets" is coming to an end.
Since the second half of 2022, the PV industry has experienced a wave of capital withdrawal: both the number and amount of equity financing have declined, and the stock prices of A-share PV enterprises have generally corrected. However, cyclicality is an eternal theme of the industry - in the first half of 2025, the Hong Kong IPO market witnessed explosive growth, with the number of newly listed enterprises surging by 43.33% year-on-year, and a number of PV enterprises restarted their overseas listing plans; during the same period, A-share IPOs also rebounded significantly, with 65 applications accepted by the Shanghai and Shenzhen Stock Exchanges, 5.9 times the total number of 2024.
This "ice-to-fire" switch confirms the PV industry's characteristic of "coexistence of long-term growth and phased cyclicality". The withdrawal of policy subsidies, overcapacity leading to price wars, and fluctuations in global demand have jointly woven the industry's cyclical code.
Capital Perspective: From "Withdrawal" to a "New Course"
1. Switch of Financing Channels
- Restart of overseas listings: Hong Kong stocks and U.S. stocks have become new options for PV enterprises. Since 2025, a number of enterprises have submitted applications to avoid the pressure of the phased tightening of A-share IPOs.
- Gradual recovery of A-shares: As the regulatory authorities support the listing of technology innovation enterprises, the number of A-share IPO applications accepted this year has reached 2.65 times that of last year, and leading enterprises in the PV segmented tracks have been favored by capital.
2. RWA: A New Tool to Activate Assets?
Blockchain technology is opening up new space for PV financing. The on-chain storage of data elements and RWA (Real World Asset Tokenization) may become the key to solving the financing difficulties of small and medium-sized distributed PV projects:
Case Study: GCL. ET conducted financing for its PV assets through RWA. After the project was launched, its stock price rose, and the capital market gave a positive response to the "blockchain + green energy" story of this traditional enterprise.
Transformation and Breakthrough: Four "Paths Out" for PV Enterprises
After the failure of the "cost leadership strategy", the industry is looking for a new "moat":
1. Technological Innovation: The Path Shift from "Cost Reduction" to "Differentiation"
Homogeneous production capacity has become a huge "sunk cost" for enterprises, and only differentiated technologies can build competitive barriers. Examples include perovskite tandem solar cells (with conversion efficiency approaching 35%) and the cross-border breakthrough of BIPV (Building-Integrated Photovoltaics) integrated buildings.
2. Business Strategy Shift from "Manufacturer" to "Energy Service Provider"
In addition to technological innovation, many enterprises have begun to make breakthroughs in business areas and innovate their business models: such as the integrated service strategy of "PV + energy storage + virtual power plant".
3. Global Layout: Avoiding Trade Barriers
In 2024, Chinese PV enterprises invested over 30 billion yuan in overseas factory construction, with Southeast Asia and the Middle East becoming popular regions. This move aims to address trade barriers and gain proximity to emerging markets.
4. Prioritizing Financial Stability over Scale Expansion
Since 2023, a number of enterprises have suffered from cash flow shortages due to aggressive production expansion. Optimizing balance sheets and focusing R&D investment on core technologies have become common issues that PV enterprises urgently need to address.
Investment Insights: Duan Yongping's "Doing the Right Thing"
In the face of cyclical fluctuations, enterprises must keep in mind two principles:
1. Terminate Wrong Strategies
Duan Yongping once said: "We must resolutely refrain from doing things that we know are wrong." Enterprises should abandon the internal competition of "expanding production - cutting prices" and shift towards value creation.
2. Policy-driven Anti-internal Competition is the Long-term Main Trend
Regulatory authorities have taken action: restricting low-price dumping, standardizing production capacity expansion, and guiding the industry to shift from "quantity growth" to "quality improvement".
Seeking Certainty Amid Cycles
The cyclical fluctuations of the PV industry have never changed its long-term growth logic. Currently, RWA financing, technological differentiation, and global layout are becoming new tools to navigate through the cycle. As Duan Yongping put it: "Do things correctly" - with the synergy of policies and the market, if PV enterprises can grasp the essence of "doing the right thing", they will eventually find their own certainty at the cyclical inflection point.
Interactive Topic
Which technology do you think will drive the next cyclical upward trend of the PV industry? Will RWA become the mainstream financing model? Welcome to leave your comments for discussion!