Chinese photovoltaic panel manufacturers jointly raise prices; Foster's shares jump over 9%. Institutions: Positive signal of photovoltaic industry ecosystem restructuring reappears.

On April 8, the photovoltaic equipment sector opened higher and rose. As of the time of this report, First Foster (603806.SH) was up more than 9%, and HiRene New Materials (688680.SH), Juhua Materials (688503.SH), Miawei Co., Ltd. (300751.SZ), Gintech Energy (300118.SZ), Yubang New Materials (301266.SZ), JA Solar Technology (002459.SZ) and others also moved up in tandem.

On the news front, according to a report from Nikkei Chinese on April 8, major Chinese solar panel manufacturers jointly raised the sales prices of their products in Japan for shipments after April. The maximum increase reached as much as 30%. JinkoSolar Holding (688223.SH), which ranks first globally in solar panel output, raised its product prices as the Chinese government canceled export-promotion measures in April. LONGi Green Energy Technology (601012.SH), which ranks second in output, as well as Trina Solar (688599.SH), which ranks fourth, also raised their prices.

In addition to the cost increases brought by the cancellation of export-promotion policies, manufacturers also passed factors such as rising raw-material prices through to product prices. Canadian Solar (CSIQ.US), which ranks seventh in output and mainly has solar panel production bases for residential use in China, also raised prices by roughly 20% or so.

The Japanese government has positioned photovoltaic power as one of the key pillars for expanding renewable energy and proposed a goal of increasing Japan’s domestic electricity generation in fiscal year 2040 to 2.5 to 3.6 times that of fiscal year 2023. Multiple industry insiders said that more than 80% of photovoltaic panels used domestically in Japan are products made in China, and that price hikes by Chinese manufacturing firms will be an unfavorable factor for the widespread adoption of solar power in Japan.

In addition, according to CCTV News, the first phase of the 1-million-kilowatt photovoltaic project—the largest single photovoltaic project in Southeast Asia being developed and built by our country—namely the CGN Laos Northern Interconnection and Clean Energy Base Phase I, has been put into operation. It is understood that this project is Laos’ first large-scale mountain photovoltaic project. After Phase I comes online, the project is expected to generate an average annual electricity output of about 1.65 billion kilowatt-hours, which is equivalent to saving about 8B tons of standard coal and reducing carbon dioxide emissions by about 1.3 million tons.

CICC said that industry leaders proactively respond to supply adjustments, and positive signals of an active reshaping of the photovoltaic industry ecosystem have reappeared. We believe the photovoltaic industry is still in a period of deep adjustment. Industry stakeholders should continue to coordinate and work proactively to “fight involution,” and guide the industry back to a path of high-quality development. In recent years, the state has encouraged listed companies to carry out industrial integration through mergers and acquisitions and restructuring to optimize resource allocation and achieve high-quality development. We believe that the merger and restructuring activities of leading enterprises are market-based transactions under a policy-guidance backdrop, which are beneficial for reducing the number of direct market participants, enhancing flexibility in production capacity management and control, and helping to improve the competitive landscape of the industry, as well as to achieve the requirements of “fighting involution.”