New World Investment Research

Media reports indicate that Beijing Guanghe Qiancheng has been formally established with registered capital of RMB 3 billion. The platform is designed to integrate and acquire polysilicon production capacity and has been in preparation across the industry for some time.

The photovoltaic sector is currently under intense pressure from overcapacity and aggressive price competition. Previously, Liu Yiyang, Executive Secretary-General of the China Photovoltaic Industry Association, noted that under the guidance of relevant government authorities the industry will push forward self-discipline and “anti-involution” measures, addressing both supply and demand while enabling the orderly, market-based exit of outdated capacity.

Against this backdrop, photovoltaic companies are increasingly turning to capacity consolidation as a way out of destructive competition. Market consensus suggests that coordinated acquisitions and the absorption of inefficient capacity by leading players could help rebalance supply and demand and, ultimately, support a recovery in industry profitability.

We might see a wave of M&As in China across multiple industries in the next years.

Full news here (in Chinese): https://lnkd.in/epyQuN6Q