On September 24th, the Shanghai Composite Index recorded its largest single-day gain in nearly four years. As of the close today, the Shanghai and Shenzhen indices reported at 2863.13 points and 8435.70 points, respectively, with increases of 4.15% and 4.36%. The total transaction amount for both markets reached 971.342 billion yuan.
Under the "restlessness" of the overall market trend, the A-share photovoltaic (PV) sector also experienced a general rise—the Wind Photovoltaic Index (884045.WI) increased by 4.74% today, with only three of the 90 constituent stocks declining.
In terms of price changes, several PV concept stocks hit their upper limit today. Yicheng Xinneng (300080.SZ), Bangjie Shares (002634.SZ), Hongyuan Green Energy (603185.SH), and TCL Zhonghuan (002129.SZ) all reached their daily limit up, while the share prices of integrated leading companies such as Longi Green Energy (601012.SH), Jinko Technology (002459.SZ), and Trina Solar (688599.SH) rose by more than 6%.
Looking at the overall performance since the beginning of the year, many PV concept stocks have seen their share prices halved (excluding delisted stocks). According to statistics from 21st Century Economic Herald reporters, as of the close on September 24th, the share prices of 24 PV concept stocks have fallen by more than 50% this year, with Tianyi Shangjia (688033.SH), ST Xulan (000040.SZ), Jinbo Shares (688598.SH), Haiyou New Materials (688680.SH), ST Lingda (300125.SZ), Kingpang PV (300093.SZ), and Hongyuan Green Energy experiencing share price declines of over 60%.
However, among the performance of the A-share PV sector this year, the share prices of inverter companies have stood out relatively. Reporters from the 21st Century Economic Herald noted that since the beginning of the year, the share prices of Deye Shares (605117.SH), Sungrow Power Supply (300274.SZ), and Shangneng Electric (300827.SZ) have cumulatively increased by 44.65%, 22.74%, and 11.63%, respectively.
But in today's market trend, the performance of several PV inverter concept stocks was relatively "weak". As of the close, the share prices of Aieruo Energy (688717.SH), Shangneng Electric, Sungrow Power Supply, and Hemai Shares (688032.SH) fell, with declines of 1.85%, 1.55%, 0.69%, and 0.09%, respectively.
Even though some PV inverter companies' share prices turned red, their gains were also lagging. As of the close, the share prices of Tongrun Equipment (002150.SZ) and Deye Shares rose by 0.96% and 2.27%, respectively, which did not keep up with the overall market performance.
Just yesterday, Deye Shares' share price plummeted, which once attracted market attention.
Data provided by Wind shows that on September 23rd, Deye Shares closed at its daily limit down, with the market value shrinking by 5.1 billion yuan that day. On the same day, the entire PV inverter sector also performed poorly.
The reason for the relatively weak performance of the PV inverter sector is related to a rumor. According to foreign media reports, Pakistan's electricity prices are expected to drop significantly. Some analysts interpret this as meaning that if Pakistan's electricity prices are ultimately reduced significantly, it will affect the enthusiasm for installing photovoltaic storage systems in the country.Prior to this, electricity prices in Pakistan had risen significantly. According to a report from CCTV Finance in August, data showed that the average monthly electricity bill for households in Pakistan in 2024 was $350, whereas a year earlier it was $100.
This year, Pakistan has become another new hotspot for residential photovoltaic (PV) storage following the South African market. The country's relatively high electricity costs—due to the long-term power rationing and frequent power outages—have forced businesses and households in the country to consider reducing electricity costs by building their own PV storage systems, leading to a surge in demand for PV storage in Pakistan.
Additionally, according to data analysis from Huachuang Securities, from January to August this year, the amount of inverters exported by China to Asia was 13.39 billion yuan, a year-on-year increase of 59%. The main reason for this significant growth is the explosion in demand from emerging markets such as Pakistan, India, and Saudi Arabia.
At present, including Deye Stock, several domestic photovoltaic inverter companies have laid out their strategies in Pakistan. Among them, Deye Stock stated in its semi-annual report for 2024 that in the first half of the year, the company's inverter products were mainly sold to Pakistan, Germany, Brazil, and other places.
Although the rumored electricity price drop has not been implemented, and many photovoltaic inverter companies have responded that they have not yet received relevant information and that their business in Pakistan accounts for a small proportion, the fragility of the photovoltaic inverter sector seems to be greater than other photovoltaic manufacturing links under the "butterfly's wings."
Compared with the same period last year, from January to August this year, the cumulative export total of China's photovoltaic inverters was $5.659 billion, a year-on-year decrease of 25.5%. Among them, the export amount in August this year was $861 million, which increased both year-on-year and month-on-month.
In other words, the shipment situation of domestic inverter companies in August this year has recovered to some extent, but why does a rumor make the inverter sector extremely sensitive, and why does the downturn even continue to this day?
From the current market valuation, photovoltaic inverters can be said to be the sector that has taken the lead in getting out of the predicament. Taking the dynamic price-to-earnings ratio as an example, under the current situation where the dynamic price-to-earnings ratios of the core companies in the main link of photovoltaic manufacturing are generally in the tens, single digits, or even negative, the dynamic price-to-earnings ratios of most photovoltaic inverter companies exceed 30 times. Among them, as of the closing on September 24, the photovoltaic inverter companies with the highest price-to-earnings ratios were GoodWe (688390.SH), Jinlang Technology, Ailuo Energy, and Tongrun Equipment, with the latest dynamic price-to-earnings ratios all exceeding 40 times.
After synthesizing the analysis content of multiple securities company research reports, it was found that the vast majority of institutions maintain an optimistic attitude towards the photovoltaic inverter sector. However, the growth of market demand not meeting expectations has become the primary risk factor proposed by many institutions.
"Economic viability is an important driving factor for photovoltaic storage installations in various countries, which is greatly influenced by factors such as energy prices, system costs, incentive policies, and interest rates. If the aforementioned factors change in the main markets, it may lead to market demand growth not meeting expectations, affecting the performance of related companies." Ping An Securities believes so.Please provide the text you would like me to translate into English.