Huatai Securities: The red line for clearing the outdated photovoltaic capacity is gradually becoming clearer.

Huatai Securities research report stated that on July 22, the specific details of three mandatory national standards, including "Energy consumption limit for polycrystalline silicon and germanium unit products", "Energy efficiency limit values and energy efficiency levels for crystalline silicon photovoltaic modules and inverters", and "Energy consumption limit for monocrystalline silicon unit products", were announced and will be implemented on January 1, 2027. In terms of energy efficiency levels, the requirements for silicon material energy consumption levels are higher than expected, with the level 3 standard being tighter compared to the draft for opinions released on September 16, 2025. The release of mandatory national standards means that the rigid access thresholds for the four major links in the silicon material, silicon wafer, cell, and module chains will be raised. Huatai Securities reiterates its optimism that the pressure on the photovoltaic demand side in the second half of 2026 is expected to ease, and the mandatory national standards in 2027 will accelerate the clearance of the supply side. It is optimistic about: leading silicon material companies with efficient existing capacity that can still meet energy consumption requirements under the "tightened ring", battery and module companies with stronger technological attributes in the main chain, and leading slurry companies in the auxiliary materials sector benefiting from the trend of cheap metal imports industrialization are expected to be the first to see profitability improvement.