On October 15, the solar sector exhibited a strong performance in both the A-share and Hong Kong markets. In the A-share market, leading inverter manufacturer $陽光電源 (300274) saw its stock price surge over 8% on increased trading volume; driven by both silicon material and solar cells, $通威股份 (600438) climbed more than 5%; key players in the industry chain such as $大全能源 (688303) and 隆基綠能 (601012.SH) also posted gains. Similarly, in the Hong Kong market, solar stocks performed impressively. Notably, polysilicon technology leader $協鑫科技 (03800.HK) rose nearly 6%, while $新特能源 (01799.HK) and $信義光能 (00968.HK), two of the global solar glass duopolies, saw their shares increase by over 3%.
The collective rally in the solar sector is not coincidental; rather, it results from multiple favorable signals recently released by the industry. These positives not only catalyzed the short-term performance of the sector but also provided strong support for future industry earnings recovery and valuation adjustments. Potential capacity control policies may soon be introduced, and a silicon material storage platform is on the way.
In recent years, the solar industry has faced deep adjustments, with supply-demand imbalances leading to a decline in product prices, which at times fell below cash costs, causing significant losses for many solar companies. By mid-2025, several firms are still reporting losses. For instance, in the first half of the year, $協鑫科技 (GCL TECH) reported a net loss attributable to shareholders of 1.776 billion RMB, a year-on-year increase of 20.04%; $鈞達股份 saw its net loss attributable to shareholders widen by 58.51% to 264 million RMB; while both $信義光能 (XINYI SOLAR) and 福萊特玻璃 achieved profits, their net profits attributable to shareholders saw significant declines.
In response to the industry’s persistent sluggishness and continuous substantial losses by companies, “anti-overcompetition” measures have been implemented, leading to a rebound in prices for silicon materials and various segment products, triggering a substantial surge in solar stocks. Recently, another positive development arrived for the solar industry, spurring an overall rise in the sector on October 15.
On one hand, media reports indicate that the relevant authorities may soon issue a notification aimed at tightening solar capacity controls. This new policy, jointly launched by the National Development and Reform Commission and the Ministry of Ecology and Environment among other agencies, directly prohibits new capacity and restricts the operating rates of existing capacity across all segments to expedite the balance between supply and demand. On the other hand, news has emerged regarding the establishment of a long-prepared polysilicon storage platform company. Nanhua Futures stated in their research report that this solar platform company is expected to be established by mid-October.
It should be noted that these positives mainly target the supply side, controlling supply through the implementation of “anti-overcompetition” measures to promote industry recovery. From the demand side, the National Energy Administration data reveals that from January to August, newly installed solar capacity totaled 230.61 GW, marking a year-on-year increase of 64.7%. However, new domestic installations have seen a continuous sharp decline since June. Specifically, in August, 7.4 GW of new installations were added, which represents a year-on-year decrease of 55.3% and a month-on-month decline of 33.3%, which may impact the third-quarter performance of some solar companies.
Expanding overseas markets has yielded fruitful outcomes, with several large contracts already signed. Compared to the domestic market, there are signs of marginal improvement in foreign market demand. According to Customs data, the export value of solar panels in August reached 20.95 billion RMB, an increase of 20.4% year-on-year and 31.9% month-on-month; while the cumulative export value from January to August stood at 132.21 billion RMB, down by 18.0% year-on-year. The export value of inverters in August amounted to 6.29 billion RMB, a year-on-year increase of 2.2%, although it decreased by 3.4% month-on-month. The cumulative export value from January to August reached 43.4 billion RMB, an increase of 8.0% year-on-year.
Entering September, major solar enterprises have frequently announced signing large overseas contracts. According to incomplete statistics, nearly 25 GW of overseas contracts covering solar power station EPC, module manufacturing base construction, and component procurement have been signed since September. For example, on October 10, China Power Construction announced that its consortium (China Water Resources and Hydropower International, East China Survey and Design Institute, among others) signed a contract with Saudi Arabia's Afif Renewable Energy Company for the “Afif 1 and 2 Solar IPP Projects,” each with a capacity of 1 GW, totaling 2 GW. On September 28, 隆基綠能 (Longi Green Energy Technology Co., Ltd.) signed a cooperation framework agreement with Australia’s Fortescue River Group to provide efficient solar modules for decarbonization of its iron ore business in Western Australia’s Pilbara region. On September 25, $通威股份 (Tsinghua Tongfang Co., Ltd.) signed an agreement with Saudi International Electricity and Water Company (ACWA POWER) for the Saudi PIF Phase 4 MUWAYH solar project to supply 1.175 GW of TNC-G12R 66 high-efficiency modules (N-type technology route, over 700W power) with the first batch expected to be delivered in 2025, located in the western part of Saudi Arabia — a key sub-project of the Saudi Public Investment Fund’s renewable energy plan.
In summary, while domestic market demand is witnessing a short-term decline, the good news from overseas markets is expected to boost the morale of the solar sector.
From an institutional perspective, the future outlook for the solar sector is seen positively. Recently, Kaiyuan Securities noted in their report that in Q2 2025, various segments of the main solar industry chain are expected to remain generally unprofitable, while specialized firms are likely to outperform integrated firms. Although some battery module companies are seeing sequential operational improvements, the overall situation remains unprofitable. The firm emphasized that the silicon material and wafer segments continue to experience deep losses, with all companies reporting net profit margins exceeding -10%; conversely, the auxiliary material segment is performing better, with most companies achieving breakeven or marginal profits. Head companies leading in market share across various segments possess stronger pricing power and profitability. Support at the high level for “anti-overcompetition” measures provides clear direction and has already made phased progress. With the demand-side price transmission mechanism gradually smoothing out and the supply-side silicon material storage plan advancing steadily, the industry’s supply-demand structure is poised for substantial improvement.
The Twelfth Hong Kong Top 100 evaluation has launched, which solar enterprises are likely to be included? Currently, the solar industry is undergoing a profound transformation, shifting from “capacity expansion” to “technological iteration + value enhancement." The recovery in domestic demand for large ground-mounted solar installations, the continuous increase in distributed solar penetration rates, coupled with explosive growth in installed capacity in emerging overseas markets (Latin America, the Middle East, and Africa), have shifted the industry growth logic from simple “capacity expansion” to the dual drivers of “technology premium + globalization dividends.”
Against the backdrop of increasing industry concentration and industrial upgrading, leading companies with core technologies, strong brand barriers, and global capacity layouts are more likely to navigate through the industry cycle and achieve excess returns in technological iterations and competition abroad. In this context, the “Hong Kong Top 100” selection has consistently focused on the “hardcore” manufacturing industry since its inception and has actively aligned with the trends of industrial transformation. Over more than a decade, the list has continuously optimized its structure, adding multiple sub-sectors to comprehensively and timely capture new industry trends in the Hong Kong market — previously, solar energy was included in the core observation areas of new energy sectors, with a focus on tracking high-quality enterprises across various segments of the solar value chain.
The preparatory work for the Twelfth “Hong Kong Top 100” selection has officially commenced, with candidate screening progressing in an orderly manner and plans to add multiple segmented lists reflective of current development trends, further covering quality stocks across various segments of the new energy and solar industry chain. Looking back at past Hong Kong Top 100 selections, leading enterprises such as $信義光能 (XINYI SOLAR) and $協鑫科技 (GCL TECH), known for their exceptional operational performance and leading technological innovation capabilities, have frequently been successfully included in the list, becoming key representatives of the solar sector in the Hong Kong market. Now, with a flurry of positive news, whether former “Top 100 regulars” can maintain their advantages and which emerging solar enterprises can capitalize on trends to break into the list is a suspense worth ongoing attention from the capital market.