Analysis of the 'Rumor-induced' Plunge in the Photovoltaic Sector

On November 12, 2025, the photovoltaic sector suffered a sudden plunge, mainly due to panic selling triggered by market rumors [1]. According to information released by Xueqiu (a Chinese investment community), the incident was caused by concerns about price wars from silicon wafer price cuts and rumors about capacity consolidation (anti-involution) progress [1]. On the same day, the stock prices of many photovoltaic leaders fell sharply: Hongyuan Green Energy hit the limit down, GCL Technology once dropped by 11.97%, and JA Solar, Tongwei, Longi Green Energy were once close to the limit down [2].

According to market data [0], the specific performance of major photovoltaic leaders on November 12:

• Longi Green Energy (601012.SS): down 6.77%, closing price 20.79 yuan, trading volume surged to 522 million shares
• Tongwei Co., Ltd. (600438.SS): down 5.10%, closing price 25.10 yuan, trading volume 229 million shares
• JA Solar Technology (002459.SZ): down 6.84%, closing price 14.29 yuan

This decline was significantly higher than the broader market performance that day, indicating the photovoltaic sector was hit by specific factors. However, after the industry association refuted the rumors, market sentiment recovered quickly. According to subsequent trading data [0]:

• November 13: Longi Green Energy rebounded by 2.4%, Tongwei rebounded by 2.11%
• November 14: Longi Green Energy continued to rise by 4.19%, Tongwei rose by 2.34%

As of November 15, Longi Green Energy closed at 21.88 yuan and Tongwei at 25.76 yuan, basically regaining their lost ground [0].

According to search results [1], from November 11 to 12, the prices of mainstream silicon wafers such as 183N and 210R did drop to 1.25-1.3 yuan per piece. The main reason was that downstream battery factories tightened procurement and set price limits due to weak demand, leading to panic selling by second and third-tier silicon wafer enterprises with tight cash flow. This price fluctuation reflects the current supply-demand imbalance faced by the industry.

According to a research report by Zhongyuan Securities [4], as of July 30, 2025, the PB(LF) valuation of the photovoltaic industry index was 1.94 times, at the 27.41% historical valuation quantile, which is indeed at a historically low level. This provides a relative safety margin for long-term investors, indicating that current valuations have already reflected most pessimistic expectations.

Liu Yiyang, Executive Secretary-General of the China Photovoltaic Industry Association, clearly stated: ‘Do not underestimate the policy determination; the photovoltaic industry will not stop until it gets rid of involutionary vicious competition’ [2]. At the policy level, it explicitly opposes involutionary competition, providing institutional guarantees for the healthy development of the industry. The joint price support actions by multiple silicon wafer enterprises also show an increase in industry self-discipline awareness [6].

This incident shows that at the bottom of the industry cycle, the market often overreacts to negative news. The timely rumor refutation by the industry association and the clear statement of policy support effectively curbed the spread of panic, reflecting the important role of policy guidance in stabilizing market expectations.

Users should note that the photovoltaic industry still faces the following major risk factors:

1. Overcapacity Risk
   : Although policies promote capacity consolidation, the overall industry capacity is still excessive, and price competition may continue
2. Technology Iteration Risk
   : New technologies such as BC batteries and perovskite batteries may accelerate the replacement of existing capacity, leading to higher investment loss risks
3. International Trade Frictions
   : Trade barriers in markets such as Europe and the United States may affect export demand
4. Corporate Profitability
   : Currently, major leading enterprises are still in a loss state, and it will take time for profit recovery

1. Valuation Repair Opportunity
   : The industry’s valuations are at historical lows, providing a good entry point for long-term value investors
2. Policy Dividends
   : The continuous advancement of anti-involution policies is expected to improve the industry competition pattern and enhance the profitability of leading enterprises
3. Accelerated Industry Integration
   : During the capacity consolidation process, leading enterprises are expected to expand market share through mergers and acquisitions
4. Technology Upgrade Opportunities
   : Breakthroughs in new technology routes may bring new growth points

Historical patterns show that the photovoltaic industry has obvious cyclical characteristics, and the capacity consolidation stage is often accompanied by sharp stock price fluctuations. Users should take this into account in their analysis to avoid making irrational decisions due to short-term emotional fluctuations at the bottom of the industry.

1. Policy Implementation Progress
   : Closely monitor the specific implementation rules and execution effects of anti-involution policies
2. Price Trend Changes
   : Price change trends of key products such as silicon wafers and modules
3. Capacity Utilization Data
   : Recovery status of capacity utilization in various links
4. Enterprise Performance Improvement
   : Performance inflection points and profit recovery progress of leading enterprises

Decision-makers need to comprehensively evaluate from the following perspectives:

• Policy Execution Strength
  : Actual execution effect and time progress of anti-involution policies
• Industry Integration Process
  : Rhythm of backward capacity consolidation and changes in market share of leading enterprises
• Technology Route Competition
  : Changes in cost-performance ratio and market acceptance of different technology routes

Although the ‘rumor-induced’ plunge in the photovoltaic sector this time is a short-term emotional shock, it reflects the deep-seated problems currently faced by the industry. Under the dual logic of policy support and capacity consolidation, the industry is expected to gradually get out of the predicament, but investors still need to remain rational and pay attention to fundamental changes and risk factors.