Electrical Equipment / Components & Telecoms

On June 7, the photovoltaic sector stocks strengthened in an all-round way after the opening bell. As of the close of the day, Yabo shares, Tuori Xinneng, Jinchen shares and many other photovoltaic concept stocks closed at the daily limit, and many individual stocks such as Sungrow Power and Tongwei shares also closed up.

On the news side, the photovoltaic track is positive again. On June 6, Eastern Time, the White House officially issued a statement announcing that the United States would grant a 24-month tariff exemption for solar modules purchased from Cambodia, Malaysia, Thailand and Vietnam.

Previously, the U.S. Department of Commerce conducted an anti-circumvention investigation on battery and module manufacturers in Southeast Asia, including Trina Solar, JinkoSolar, LONGi Green Energy and other leading companies with battery module production capacity in four Southeast Asian countries. The statement also said the United States is now on track to triple its solar power generation capacity by 2024.

Liu Jimao, Assistant President of Xingchu Century, said: "Most of the module companies in the four Southeast Asian countries are overseas companies of Chinese companies. This tariff exemption is beneficial to both China and the United States. The United States can reduce module costs and expand installations; Chinese companies can This year, it is expected to add about 16GW of revenue and corresponding profits, and it is expected to increase further in 2023.”

"This is a direct benefit to domestic photovoltaic companies. On the surface, it seems that the White House of the United States has announced tariff exemptions for photovoltaic products from the four Southeast Asian countries. In fact, my country's photovoltaic companies have the most benefits, especially those with production bases in these countries. Large-scale photovoltaic enterprises." Qi Haishen, president of Beijing Yite Sunshine New Energy, told reporters.

Trade investigations may continue in the future

In February, U.S.-based module maker Auxin Solar asked the U.S. Department of Commerce (DOC) to conduct an anti-circumvention investigation against cell and module manufacturers in Southeast Asia. On March 28, the U.S. Department of Commerce said it would investigate whether solar panels imported from four Southeast Asian countries (Cambodia, Malaysia, Thailand, and Vietnam) violated trade protection laws. In May, DOC successively released anti-circumvention memoranda and mandatory interview lists, including Trina Solar, Canadian Solar, JinkoSolar, LONGi Green Energy and other leading companies with battery module production capacity in four Southeast Asian countries. Once the relevant investigation is carried out, it may lead to retrospective tariffs of up to 250%.

Liu Jimao said: "The previous investigation launched by the United States, accompanied by punitive tariffs, affected 84% of all U.S. solar modules imported from four countries and half of all cells imported for domestic module production. The industry has been plagued by trade wars and price hikes, resulting in continued increases in module prices and a significant drop in U.S. solar installations.”

Guolian Securities believes that the anti-circumvention investigation directly affects the willingness of component manufacturers to ship orders from the United States. According to the US Solar Energy Industries Association (SEIA) survey data, nearly 75% of US solar companies have delayed or cancelled solar module deliveries, nearly 80% of PV module imports have stalled, and a large number of projects are on hold.

From the perspective of photovoltaic module suppliers, LONGi Green Energy previously stated that after the US anti-evasion investigation was filed, the company adopted a cautious attitude and communicated with some customers in the short term. If customers are willing to take the risk of anti-evasion tax rate, the company will continue to deliver. In general, until the ruling comes out, large-scale shipments to the United States are temporarily unavailable.

Regarding the White House's tariff exemption, Bai Wenxi, chief economist of IPG China, believes that "this will help improve the future solar power generation capacity of the United States and reduce the dependence on fossil energy."

Liu Jimao told reporters, "The main purpose of the previous US tariff policy was to bring the photovoltaic manufacturing industry back to domestic production. However, due to the sufficient competition in the photovoltaic industry chain and low prices, the effect was not very good. But in recent years, the domestic silicon material price Continuing to rise, profits have increased several times, allowing the United States to have production conditions again. Once the United States restarts its production plan, it is possible to continue trade investigations and increase tariffs in the future.”

Bai Wenxi also said, “At present, the United States is working with ASEAN to compete with China in the industrial chain, and to increase the manufacturing capacity of solar modules in the United States. It's very bad for business."

The export focus of photovoltaic module companies has shifted

In fact, since the US announced its anti-circumvention investigation, many PV module companies have shifted their export focus to Europe.

According to PV Infolink's statistics on China's customs export data, from January to March 2022, China exported 9.6GW, 14.0GW, and 13.6GW of photovoltaic modules to the world with a total of 37.2GW, an increase of 112% over the same period last year.

According to the announcement issued by LONGi Green Energy, the company will achieve a shipment of 6.44GW of photovoltaic modules in the first quarter of 2022, of which the top three shipment markets are China, Europe and India, accounting for 32%, 27% and 18% respectively. .

JinkoSolar also said in an institutional survey that the company's module shipments in the first quarter of this year were 8.03GW, of which Europe accounted for the highest proportion, and South Asia, China and Latin America all contributed significantly. JinkoSolar also stated that international trade frictions in the photovoltaic industry have gradually become the norm, and leading companies have rich experience in dealing with them. The details of the recently introduced anti-circumvention policy are yet to be clarified, but the company is still optimistic about the medium and long-term demand in the US market. At the beginning of this year, the company began to deploy silicon wafer production capacity in Vietnam, and the overseas integrated supply chain formed in Southeast Asia in the future is expected to be a better solution for supplying the US market.

Tuori Xinneng replied on the investor platform, "The company's current photovoltaic products are mainly exported to the Americas (including the United States), Europe, and Southeast Asia. We have established a wholly-owned subsidiary in the United States to assist the operation and sales of domestic photovoltaic products. If the news that the U.S. will not impose tariffs on solar products within two years is true, it will bring significant market opportunities for the company and bring more orders for photovoltaic products to the company.”

Guolian Securities believes that under the influence of "three highs" factors such as high inflation, high local manufacturing costs, and high energy prices, Europe and the United States will maintain an open attitude towards the module products of Chinese photovoltaic companies and their overseas manufacturing bases. Opportunities to further expand overseas markets will be greater.

According to BOC International Securities, according to data from CPIA and Sobey Photovoltaic Network, my country's photovoltaic industry currently supplies more than 70% of the world's demand, and first-tier module companies have a global competitive advantage. The decision of the United States to temporarily exempt the import tariffs of photovoltaic products from the four Southeast Asian countries reflects the current global photovoltaic market's high dependence on China's industrial chain.