Nearly 80% of concept stocks fell in the third quarter due to China’s excess solar capacity and weak demand

Due to overcapacity of solar (called photovoltaic in China) modules and weak domestic demand, related companies suffered heavy losses. In the third quarter of this year, 77 of the 99 solar stocks in China fell, accounting for nearly 80%. The solar energy index (called photovoltaic index in China) also fell by about 14.9%, which was about 2.4 percentage points lower than the Shanghai and Shenzhen 300 Index.

According to data from financial information provider Wind, in the third quarter of this year, China's 99 solar stocks fell by an average of 12.9%, of which 77 fell, accounting for 77.8%. At the same time, the solar energy index fell 14.9%, which was 2.4 percentage points higher than the 12.5% ​​decline of the Shanghai and Shenzhen 300 Index.

The Chinese media "Times Weekly" reported on the 4th that in the third quarter of this year, the stock prices of solar energy companies were polarized. For example, Lixin Energy rose by 43.9% cumulatively, while Arrow Energy fell by 51.1% cumulatively. The difference between the rise and fall of the two was close to 100 percentage points. But Lixin Energy is a state-owned new energy listed company engaged in the investment, development, construction and operation of wind power and solar power. It is not a traditional solar energy manufacturing company, and its performance growth does not come entirely from solar energy.

China's solar energy industry has begun to experience a crisis in the second half of 2023. The prices of solar components (silicon materials, silicon wafers, cells, etc.) have begun to plummet, with the maximum drop exceeding 50%. From 2024 to 2025, many industrial giants and small and medium-sized solar companies with a market value of hundreds of billions have fallen into serious losses, leading to plummeting stock prices, production line shutdowns and large-scale layoffs.

"China Energy Network" analyzed on the 2nd that the imbalance between supply and demand is the main reason for the weakness of the solar energy industry. The problem of overcapacity in the industry has worsened, and market demand has become insufficient. Some tail-end companies (referring to companies with lower market shares, smaller scales, weaker competitiveness, or bottom performance rankings) are most susceptible to cash flow disruptions. When the residual value of assets is insufficient to cover debts, they may go bankrupt and liquidate.