▶  Industry chain structure: The photovoltaic industry chain mainly includes upstream raw material collection and processing, midstream solar cell module manufacturing, and downstream photovoltaic power station construction and operation.Upstream involves silicon materials and silicon wafer processing and manufacturing; midstream includes solar cells and modules, with other accessories such as photovoltaic glass, back film, eva film, pv ribbon, etc. The market cap scale of silicon wafers, solar cells, and modules is close to trillion yuan, with the most profitable link in the upstream silicon materials, favored by public fund managers for its integrated advantage.
▶  Economic tracking indicators: Track the economic situation from the perspectives of quantity and price.In terms of quantity, the main focus is on the overall photovoltaic sector, monthly residential photovoltaic installation scale, and monthly export amount of solar cell. In terms of price, the main focus is on the prices of upstream and downstream materials, such as polycrystalline silicon feedstock, monocrystalline/polycrystalline silicon wafers, monocrystalline/polycrystalline solar cells, and component prices. Prices of photovoltaic glass, EVA, and other auxiliary materials are also worth tracking.
▶  Market drivers: The cyclical recovery of installation demand is crucial. 2019 was a turning point, where installation demand shifted from policy-driven to market-driven.The prosperity driving force of the photovoltaic industry is the global installation demand. Taking 2019 as a turning point, after years of technological iteration and cost reduction, the industry is moving away from policy-driven cyclicality towards internally generated growth, leading to an overall upward shift in industry valuations. In the past, the photovoltaic market behaved similarly to cyclical commodities, driven by installation demand, with index features being short bullish and long bearish, highly volatile, but with historical bottoms trending upwards. When industry installation demand enters a rebound phase, the photovoltaic industry outperforms by a wide margin compared to other industries.