Darkness before the dawn
􀅜 Strong global PV market growth in 2010 & 2011
We forecast global photovoltaic (PV) cell installation to grow 44% and 37%, respectively, in
2010 and 2011. Growth will be driven by global economic recovery, plummeting solar
related prices across the value chain, continued polysilicon oversupply, increased government
support worldwide and lucrative PV project investment returns. For individual markets,
Germany, which has enjoyed strong PV market support in 2009, will continue to grow
moderately in 2010. We expect the US to emerge as a key catalyst for the global PV market.
In China, PV sector regulations will be made increasingly clear over the next six months.
Judging from the policy timeframe, the investment progress of provinces and the cost
competitiveness of solar energy, we expect China’s PV market to pick up pace in 2010.
■ PV prices to drop on oversupply of polysilicon
There will be a surge of new polysilicon capacity globally in 2009-11, which will push down
polysilicon prices. Prices along the PV value chain will trend down to support levels. While
China＇s high-cost polysilicon capacity will suffer, the government plans to impose tight
controls over the sector, which will help ensure supply-demand balance.
■ Long-term buying opportunity to emerge over next six months
While the shipments of PV suppliers improved in 3Q09, the supply-demand imbalance won’t
be rectified any time soon. We expect polysilicon prices to continue to decline, pushing PV
prices down to strong support levels in the next six months. In light of positive long-term
market growth outlook, we see a long-term buying opportunity emerging over the next six
months. Taiwan stocks worth monitoring are Motech (6244.TW, NT$94.1, N), Neo Solar
Power (3576.TW, NT$40.65, NR) and Sino-American Silicon (5483.TW, NT$77.4, NR). In
China, we favor Sunvim (002083.SZ, Rmb8.3, NR), Tianwei Baobian (600550SS, Rm33.92,
NR) and Sanan Optoelectronics (600703.SS, Rmb35.03, NR).