Analysis of Investment Value in the Photovoltaic Industry Under Anti-Involution Policies — Comparative Study of Tongwei Co., Ltd. and Hesheng Silicon Industry

Now I will provide you with a comprehensive investment analysis report on the photovoltaic industry based on the obtained data.

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The ‘anti-involution’ policy for the photovoltaic industry was launched in July 2024, with the main goal of solving the industry’s overcapacity problem. According to search results, the capacity of all links in the photovoltaic industry chain expanded rapidly in the past two years, leading to:

• Component overcapacity
  : Global component manufacturing capacity has reached nearly 4 times the annual demand [1]
• Industry-wide losses
  : The top 10 global component manufacturers lost a total of $2.2 billion in the first half of 2025 [2]
• Continuous price decline
  : The collapse of module prices affected all enterprises including the largest manufacturers [2]

From July 2024 to November 2025, relevant departments introduced a series of anti-involution measures, including:

• Capacity regulation policies
• Credit lending restrictions
• Higher industry access thresholds
• Encouraging the development of upstream core materials (such as polysilicon) and restricting blind expansion of mid-downstream links

According to chart data from search results, polysilicon prices rose significantly in December 2025:

• Price increase
  : Polysilicon prices rose by 141.17% in December 2025 to 16.11 yuan/gram
• N-type polysilicon
  : Average transaction price was about 53,900 yuan/ton
• Industry chain impact
  : The proportion of polysilicon in the cost of photovoltaic modules increased significantly, promoting value restructuring of the industry chain

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: Global leading polysilicon and solar cell manufacturer

Financial Indicator	Current Value	Evaluation
Market Capitalization	95.88 billion yuan	Industry Leader
Current Stock Price	21.79 yuan	-1.36% (YTD)
EPS (TTM)	-1.86 yuan	In Loss Status
P/E	-11.72x	Negative, in Loss Cycle
P/B	2.19x	Above Book Value
ROE	-18.28%	Profitability Under Pressure
Current Ratio	1.24	Liquidity Acceptable
Quick Ratio	0.99	Short-Term Debt Repayment Pressure Exists

:

• Q1: EPS -0.75 yuan, Revenue 23.72 billion yuan
• Q2: EPS -0.52 yuan, Revenue 24.58 billion yuan
• Q3: EPS -0.07 yuan, Revenue 24.09 billion yuan
• Trend
  : Loss margin narrowed quarter by quarter, profitability gradually recovering [0]

: Integrated leader in organic silicon, industrial silicon, and polysilicon

Financial Indicator	Current Value	Evaluation
Market Capitalization	63.19 billion yuan	Medium-Sized Leader
Current Stock Price	53.90 yuan	-1.57% (YTD)
EPS (TTM)	-0.02 yuan	Slight Profit Status
P/E	-2695.00x	Basically Invalid
P/B	1.97x	Close to Book Value
ROE	-0.11%	Extremely Weak Profitability
Current Ratio	0.31	High Liquidity Risk
Quick Ratio	0.11	High Short-Term Debt Repayment Pressure

:

• Q1: EPS 0.25 yuan, Revenue 6.32 billion yuan
• Q2: EPS -0.16 yuan, Revenue 4.55 billion yuan
• Q3: EPS 0.06 yuan, Revenue 5.43 billion yuan (Below Expectation)
• Trend
  : Performance fluctuates greatly, Q3 revenue increased by 7.6% YoY but EPS was far below expectation (-75.9%) [0]

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Indicator	Tongwei Co., Ltd.	Hesheng Silicon Industry
Opening Price at Year Start	22.16 yuan	55.44 yuan
Current Price	21.79 yuan	53.90 yuan
Annual Change	-1.67%	-2.78%
Annual High	27.75 yuan (+25.1%)	67.46 yuan (+21.7%)
Annual Low	14.89 yuan (-32.8%)	44.73 yuan (-19.3%)
Price Volatility	2.81% (Daily)	2.29% (Daily)
Maximum Retracement	-34.12%	-23.07%
Above 20-Day MA	21.52 yuan	52.90 yuan

Chart Description: The above chart shows the 2025 annual stock price trends, daily returns, trading volume comparisons of Tongwei Co., Ltd. and Hesheng Silicon Industry, as well as Tongwei’s technical indicators (MA20/MA60).

[0]:

• Trend
  : Sideways Oscillation, No Clear Direction
• Support Level
  :21.39 yuan
• Resistance Level
  :22.19 yuan
• KDJ Indicator
  : K:56.4, D:40.0, J:89.1 → Golden Cross Bullish Signal
• Beta
  :0.7 vs CSI300, Volatility Lower Than Market

[0]:

• Trend
  : Sideways Oscillation, No Clear Direction
• Support Level
  :52.90 yuan
• Resistance Level
  :54.84 yuan
• KDJ Indicator
  : K:72.5, D:60.8, J:96.0 → Golden Cross Bullish Signal
• Beta
  :0.25 vs CSI300, Low Volatility

Chart Description: The above chart shows the price trends and moving averages, 20-day rolling volatility comparison of the two companies, as well as retracement analysis from the annual high. Tongwei Co., Ltd.'s maximum annual retracement reached 34%, significantly higher than Hesheng Silicon Industry’s 23%.

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Scenario	Intrinsic Value	Potential Increase
Conservative Scenario	362.83 yuan	+1,565%
Baseline Scenario	384.24 yuan	+1,663%
Optimistic Scenario	750.22 yuan	+3,343%
Probability Weighted	499.10 yuan	+2,191%

:

• Revenue Growth Rate:20.1% (5-Year CAGR)
• EBITDA Margin:19.0%
• WACC:6.4%
• Terminal Growth Rate:2.5%

Scenario	Intrinsic Value	Potential Increase
Conservative Scenario	964.92 yuan	+1,690%
Baseline Scenario	1,567.22 yuan	+2,808%
Optimistic Scenario	4,375.76 yuan	+8,018%
Probability Weighted	2,302.63 yuan	+4,172%

:

• Revenue Growth Rate:31.3% (5-Year CAGR)
• EBITDA Margin:32.8%
• WACC:5.5%
• Terminal Growth Rate:2.5()

The DCF valuations of both companies show

, mainly based on:

1. Historical high-growth period data (2020-2024 PV industry boom)
2. Assumption of industry recovery from loss cycle
3. Profit repair driven by polysilicon price recovery

: These valuations are highly dependent on the assumption of rapid industry recovery; currently the industry is still in the overcapacity and low-price stage, so should be vigilant.

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Dimension	Current Status	Judgment
Capacity Utilization Rate	Overall Low in Industry	Capacity Clearance Stage
Product Price	Polysilicon Price Rebounding	Price Bottoming and Recovering
Corporate Profit	Most in Loss, Some Reducing Losses	Profit Bottom Area
Policy Orientation	Anti-Involution, Capacity Control	Policy Supports Clearance
Technology Iteration	Rapid Penetration of N-Type Batteries	Technology Upgrade Period

: The photovoltaic industry is in the , but capacity clearance still takes time. Polysilicon price recovery is a positive signal, but full profit recovery of the industry still needs time.

Comparison Dimension	Tongwei Co., Ltd.	Hesheng Silicon Industry	Advantage Side
Market Position	Dual Leader in Polysilicon + Solar Cells	Industrial Silicon + Organic Silicon + Polysilicon	Tongwei
Business Structure	High Purity in PV	Diversified Business	Each Has Advantages
Profitability	In Loss but Improving Quarter by Quarter	Slight Profit, High Volatility	Tongwei
Financial Risk	Current Ratio 1.24	Current Ratio 0.31⚠️	Tongwei
Valuation Safety	P/B 2.19x	P/B1.97x	Hesheng More Affordable
Risk Resistance Ability	Stronger	Weaker (High Leverage)	Tongwei
Elasticity	Large Cycle Elasticity	Larger Cycle Elasticity	Hesheng

:

1. Gross Margin Repair
   : Polysilicon price recovery from the bottom directly improves upstream companies’ gross margin
2. Capacity Value Enhancement
   : Value of high-quality capacity will be re-evaluated
3. Accelerated Industry Integration
   : High-cost capacity exits, leading companies’ market share increases

:

1. Sustainability of Price Increase
   : Doubtful whether demand can support continuous price increase
2. Overcapacity Still Exists
   : Industry capacity clearance takes time
3. Policy Regulation Intensity
   : Anti-involution policy intensity may affect price recovery space

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: Under anti-involution policies, the photovoltaic industry has , but short-term needs to observe capacity clearance progress. Polysilicon price recovery is a positive signal, but .

:

Investment Strategy	Recommended Target	Reason
Stable Allocation	Tongwei Co., Ltd.	Industry Leader, Financial Stability, High Certainty of Profit Repair
Elastic Allocation	Hesheng Silicon Industry	Low Valuation, High Elasticity, But Need to Bear Financial Risk
Wait and See	Wait for Industry Inflection Point Confirmation	Pay Attention to Capacity Clearance Progress and Continuous Price Recovery Signal

:

• Investors with Strong Risk Tolerance
  : Can consider gradually building positions in Tongwei Co., Ltd. at current levels, with batch layout
• Conservative Investors
  : Suggest waiting for clear profit improvement signals of the industry before entering

1. Polysilicon Price Trend
   : Continuously observe N-type polysilicon transaction price
2. Capacity Utilization Rate
   : Whether industry operating rate回升 to above 80%
3. Corporate Profit
   : Whether 2026 Q1-Q2 financial reports achieve overall profit
4. Policy Implementation
   : Effect of anti-involution policies on backward capacity clearance

⚠️

: If capacity clearance is slow, price war may continue
⚠️ : Global PV installation growth slowdown may affect supply-demand balance
⚠️ : New technology routes may impact existing capacity
⚠️ : Weak liquidity indicators, need to pay attention to debt risk
⚠️ : DCF valuation is based on high-growth assumptions, there is callback risk

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:

1. Obvious Industry Bottom Characteristics
   : After long-term adjustment, the photovoltaic industry shows multiple signals such as capacity clearance, policy regulation, price recovery, indicating it is at the cycle bottom area.
2. Polysilicon Price Recovery is a Key Signal
   : The 141.17% increase in polysilicon prices in December 2025 indicates that the upstream supply-demand relationship is improving, but whether the price can continue to rise still needs observation.
3. Tongwei Co., Ltd. Has More Allocation Value
   : As an industry leader, Tongwei Co., Ltd. is superior to Hesheng Silicon Industry in terms of profitability, financial stability, and business focus, making it more suitable as a core allocation target.
4. Profit Recovery Will Be Gradual
   : Currently, the industry is still in loss or slight profit state; it takes time for price repair to transmit to profit, so 2026 will be a key observation window.
5. Investment Strategy: Buy on Dips, Batch Layout
   : Suggest paying attention to industry inflection point signals, and gradually allocate high-quality leaders under risk control.

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[0] Gilin API Data - Including real-time market, company overview, financial analysis, DCF valuation, technical analysis and other financial data

[1] Energetica India - “MNRE Flags Module Overcapacity, Urges Banks to Prioritise Funding Upstream Solar Components” (https://energetica-india.net/news/mnre-flags-module-overcapacity-urges-banks-to-prioritise-funding-upstream-solar-components)

[2] SolarQuarter - “JA Solar, Trinasolar Jointly Top Wood Mackenzie’s Global Solar Module Manufacturer Ranking for H1 2025” (https://solarquarter.com/2025/12/18/ja-solar-trinasolar-jointly-top-wood-mackenzies-global-solar-module-manufacturer-ranking-for-h1-2025/)