Zhongjin: "Equivalent tariffs" have limited marginal impact, focus on photovoltaic low-rebound targets.

CICC released a research report stating that "equal tariffs" imposed by the United States have exacerbated the situation in Southeast Asia but have minimal marginal impact. Indonesia is slightly affected but still competitive, the Middle East has lower tariffs and little risk of further tariffs, and the focus in the future will remain on domestic production capacity in the United States. Overall, the solar panel sector has been adversely affected by market sentiment, causing significant declines in Hong Kong-listed solar stocks and new technology stocks. It is recommended to pay attention to the space for subsequent recovery. Specifically, it is recommended to focus on XINYI SOLAR (00968), Yuneng Technology (688348.SH), Hoymiles Power Electronics Inc. (688032.SH), and other residential storage inverter companies. CICC's main points are as follows: Solar PV industry chain: Overall, PV production in April continued to increase, with silicon wafer and cell production exceeding 60GW, while silicon material production remained above 100,000 tons. The inventory of silicon materials is expected to further decrease, and attention should be paid to the price increase driven by inventory clearance, as well as the increase in market share for leading component manufacturers. With the upcoming policy changes for commercial and industrial grid connections on April 30 and the full entry of incremental projects on May 31, the focus will shift to provincial electricity prices and demand after the rush to install new projects. Focus on Hong Kong-listed undervalued stocks in the background of market recovery and alpha segments of the industry chain, including Wuxi Dk Electronic Materials Co., Ltd. with potential in copper slurry, Changzhou Fusion New Material, Jiangsu Pacific Quartz with potential growth from increased prices of quartz sand due to US tariffs, and integrated module leaders such as Jinko Solar. Solar PV ancillary materials industry chain: Tariffs may impact the competitiveness of ancillary material production in Southeast Asia, but the impact is limited. Overseas production capacity of PV ancillary materials is mainly located in Southeast Asia and Indonesia. Among the different regions in the United States, XINYI SOLAR has set up production facilities in Malaysia, where the "equal tariffs" are lower than in other regions of Southeast Asia, thus having a smaller impact. Fundamentally, the number of days of glass inventory continues to decline, with inventory days dropping to around 25.67 last week, a decrease of 2.11% compared to the previous week. With the rise in glass prices in March and April, manufacturer profits have recovered, but weak stock prices reflect market concerns about declining demand after the rush to install projects following the 531 policy. In terms of inverter fundamentals, European demand is expected to recover in Q2, with manufacturers reporting increased shipments compared to Q1. However, stock prices were adversely affected last week due to US tariff factors, and it is recommended to invest in residential storage inverter companies with a lower exposure to US risks and a higher market share in Europe. Risk factors: Lower-than-expected demand for solar PV, lower-than-expected progress on the supply-side reform, trade policy risks.