Shares of solar energy companies in Hong Kong experienced a widespread decline during the early trading session on Monday, following a notable surge in several stocks at the close of the previous session.
As of press time, TRIUMPH NEW EN (SEHK: 01108) shares were down 5.61% to HK$2.69. FLAT GLASS (SEHK: 06865) shares fell 3.32% to HK$7.56, while XINTE ENERGY (SEHK: 01799) shares dropped 3.29% to HK$4.41. XINYI SOLAR (SEHK: 00968) shares also declined, losing 2.79% to trade at HK$2.44.
This morning's weakness follows a sharp reversal in sentiment for the solar sector during yesterday's late trading session, which saw A-share companies like JA Solar and Aikosolar surge to their daily limit-up prices. The sudden rally was reportedly linked to market speculation circulating in the afternoon. An unverified online rumor suggested that "mandatory standards for the photovoltaic industry might be issued next week, covering silicon materials, wafers, and modules, which could potentially eliminate about 30% of capacity based on previous guidelines."
Inquiries made to several companies within the sector regarding this rumor yielded responses that they had noted the speculation but were currently unable to verify its authenticity. Other reports indicated that executives from several listed companies stated they "had no idea" what caused the late-day surge.
In a recent research note, Guojin Securities pointed out that current market expectations for demand have nearly hit rock bottom. Domestic initiatives such as direct green power connections and energy storage allocation are helping to alleviate grid absorption pressure for solar power. New distributed generation policies are addressing grid connection bottlenecks, potentially unlocking more demand in the distributed segment. The firm anticipates a potential inflection point for domestic demand, advising investors to monitor signals such as a narrowing peak-to-valley electricity price differential and a recovery in mechanism-based tariffs.
Against a backdrop of global power shortages and a push for energy autonomy, overseas demand is expected to remain robust. Both domestic and international solar demand hold potential to exceed expectations. According to the note, a "repair in demand-side expectations" could easily trigger opportunities within the sector.
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