HK Stock Market Move | Photovoltaic stocks mostly fell, and the profitability of the main industry chain is under short-term pressure. The industry is accelerating the elimination of inefficient production capacity.

Photovoltaic stocks mostly fell. As of the time of writing, IRICO NEWENERGY (00438) fell by 3.72% to 3.36 Hong Kong dollars; FLAT GLASS (06865) fell by 3.33% to 10.46 Hong Kong dollars; XINYI SOLAR (00968) fell by 3% to 3.56 Hong Kong dollars; XINYI ENERGY (03868) fell by 1.96% to 1 Hong Kong dollar. In terms of news, according to Jibang Consulting, component production continued to be sluggish in July, with output ranging from about 44-46GW for the month and inventory levels showing a clear upward trend. Actual transaction prices continue to be under pressure, and the central trading tone is maintaining a downward trend. Major manufacturers' orders in July are generally insufficient, leading to a period of low demand, with some manufacturers lowering delivery prices to survive. In addition, photovoltaic glass prices have decreased this week, and it is expected that the imbalance of supply and demand for photovoltaic glass in July will worsen, putting further pressure on prices. Guosen released a research report stating that since 2023, the rapid release of new production capacity has led to a situation where supply exceeds demand in certain stages, causing prices throughout the industry chain to rapidly decline. Prices are expected to be fiercely competitive in various segments in 2024-2025, with a concentration of industry leaders. The bank pointed out that in the past year, the prices of silicon materials, silicon wafers, solar cells, and components have fallen by 43-56% respectively. In the short term, the main industry chain's profitability and cash flow are under pressure, but in the medium to long term, this round of "elimination" will benefit the industry in entering a healthier competitive ecosystem.