高盛-中國的超強產(chǎn)能和制造能力如何影響世界（英）-2024-WN8

EQUITY?RESEARCH|August06,2024|5:44PMHKTChinainTransitionChina’scapacity-theimbalance,theinflections,andbeyondcyclesAyearagoourChinateamdeconstructedChina’ssupplychainamidstunprecedentedchangestotheoutlook,tobuildapictureofresilience,opportunityandvulnerability.Ayearonandayearworse,wesamplesevensigni?cantglobalmanufacturingindustriesrepresenting22%ofChina'sGDPgrowth.In?vesectors,theseindustrieshavebuiltmorecapacitythantheentireglobaldemandpool—imbalancesthathaveleftmorethan50%ofcapacityrunningatzeroornegativecashmargins.AsChina'stransitioncontinues,weaskhowcyclicalaretheseimbalances,howmuchfurthercantheygoandhowmightwegaugeinflectionpointsahead.WeconcludethatChinesemanufacturersarerespondingtopoorpro?tabilityanduncertaintiesaroundlimitationstomarketaccesstotheUSandEU,pre-emptivelyadjustingthepaceoffutureadditionsofcapacity,incontrasttoconsensusnarratives.Weexpectarebalancinginsupplyversusdemand,arestorationinpro?t,andsharpdecelerationofChinesesupplytotheworldthrough2028.Our"RuleofThree"and"tippingpoint"frameworkssuggestthat:(1)solarandlithiumbatteriesaretheclosesttoreachinganinflectionpointintheirsupply/demandimbalances,withnegativecashmarginsandreductionsinCapexplanssetagainststillsoliddemandgrowth;(2)electricvehiclesandpowersemisarefurthestfromaninflectionpoint,drivenbyboththeirbalancesheetsandpro?tabilitypositioning;and(3)tippingpointsmaybealteredbysupplysidereforms,competitiveindustrystructures,capacityexpansionex-Chinaaswellasdemanddestruction,iffacedwithaglobaleconomicslowdown.TrinaChenAllenChangJacquelineDuTinaHouEricShen+852-2978-2678trina.chen@GoldmanSachs(Asia)L.L.C.+852-2978-2930+86(21)2401-8948+86(21)2401-8694+852-2978-7954allen.k.chang@GoldmanSachs(Asia)L.L.C.jacqueline.du@GoldmanSachs(China)SecuritiesCompanyLimitedtina.hou@eric.shen@GoldmanSachs(China)GoldmanSachs(Asia)L.L.C.SecuritiesCompanyLimitedGoldmanSachsdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthe?rmmayhaveacon?ictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.ForRegACcerti?cationandotherimportantdisclosures,seetheDisclosureAppendix,orgoto/research/hedge.html.Analystsemployedbynon-USaf?liatesarenotregistered/quali?edasresearchanalystswithFINRAintheU.S.TheGoldmanSachsGroup,Inc.FulllistofauthorsinsideContributingAuthorsTrinaChenAllenChangJacquelineDu+852-2978-2678trina.chen@GoldmanSachs(Asia)L.L.C.+852-2978-2930+86(21)2401-8948allen.k.chang@GoldmanSachs(Asia)L.L.C.jacqueline.du@GoldmanSachs(China)SecuritiesCompanyLimitedNickZheng,CFAVerenaJengTinaHou+8522978-1405+8522978-1681+86212401-8694nick.zheng@GoldmanSachs(Asia)L.L.C.verena.jeng@GoldmanSachs(Asia)L.L.C.tina.hou@GoldmanSachs(China)SecuritiesCompanyLimitedEricShenNicolasYiOliviaXu+8522978-7954eric.shen@GoldmanSachs(Asia)L.L.C.+86212401-8922+86212411-8018nicolas.yi@GoldmanSachs(China)SecuritiesCompanyLimitedolivia.xu@GoldmanSachs(China)SecuritiesCompanyLimitedMengwenWangJolinLiuFionaYe+86212401-8932+8523966-4087jolin.liu@GoldmanSachs(Asia)L.L.C.+8522978-0680?ona.ye@GoldmanSachs(Asia)L.L.C.mengwen.wang@GoldmanSachs(China)SecuritiesCompanyLimitedCeciliaTangTingSongQiyingWei+86212401-8738+8522978-6466ting.song@GoldmanSachs(Asia)L.L.C.+8522978-6426qiying.wei@GoldmanSachs(Asia)L.L.C.cecilia.tang@GoldmanSachs(China)SecuritiesCompanyLimitedSylviaHuXiyangZhaoSelinaYan+86212401-8792+86212411-8045+8522978-0178sylvia.hu@GoldmanSachs(China)SecuritiesCompanyLimitedxiyang.zhao@GoldmanSachs(China)SecuritiesCompanyLimitedshuling.yan@GoldmanSachs(Asia)L.L.C.GoldmanSachsChinainTransitionExhibit1:Sectorsinonechart-globalsupplychainpositions,supply/demandbalances,cyclicalin?ections,andsupplyconsolidationpowersemis(IGBT)airsolarmoduleslithiumbatterieselectricvehiclesconstructionmachinerysteelconditionersPathtorebalanceOverview-China'sglobalsupplyposition,changesindomesticdemandandexportsRebalance0~1yeartocapextippingpoint2~3yearstocapextippingpointCyclicalorstructuraloversupplyChinasuppliesMktshare2023A75%ofglobalsupply55%ex-China86%ofglobalsupply72%ex-China81%ofglobalsupply65%ex-China66%ofglobalsupply26%ex-China29%ofglobalsupply6%ex-China54%ofglobalsupply33%ofglobalsupply21%ex-China16%ex-ChinaChinaexports2023A42%ofitsoutput42%ofitsoutput37%ofitsoutput19%ofitsoutput15%ofitsoutput16%ofitsoutput53%ofitsoutputUSEUSEAOthers12%20%49%27%30%41%30%50%5%5%16%Changes20-23A

23-28E+0.2x+0.0x+0.2x+0.1x-0.4%+3%20-23A

23-28E+3.4x+1.1x+1.9x+0.8x20-23A

23-28E+5.7x+2.0x+7.2x+2.0x20-23A

23-28E+6.0x+1.1x+6.7x+2.6x20-23A

23-28E+0.7x+0.5x+2.7x+1.6x20-23A

23-28E-0.1x-0.1x+0.2x+0.1x20-23A

23-28E-0.7x+0.9x+2.0x+0.4xDomesticdemandExports/ex-ChinacapacityEx-Chinamktshare2+5%-4%+40%-19%+15%+4%+3%+4%+2%-1%+10%+4%Globaldemand2028E6%6%7%10%21%18%18%25%19%16%6%9%17%21%0Levelsofexcesscapacity,capacityutilizationratesLevelofexcesscapacity153%197%138%119%119%116%CNcapacityas%ofglobaldemand91%94%83%66%109%86%63%35%2023A26-28E62%62%2023A26-28E2023A26-28E79%2023A26-28E65%2023A26-28E87%2023A26-28E81%74%2023A26-28ECapacityutilizationrates2026-28Ebasedon69%44%61%54%46%30%41%extrapolatedcapexrevisiontrend2023A26-28E8%8%2023A26-28E2023A26-28E2023A26-28E2023A26-28E2023A26-28E2%2%2023A26-28EexportstoUS/EUvs.capacity10%6%12%9%4%5%7%4%3%4%Cyclicalinflections-RuleofThreeandtippingpointframeworksConclusionsStableBottomingYesBottomingNotbottomingYesNotbottomingYesNotbottomingYesNotbottomingNotRule1-cashmarginNotNot%ofindustryatnegativeOCF/sales19%6%21%22%26%(1Q24A)PositiveZero50%50%51%49%81%73%78%74%100%NegativeRule2-Capexrevisioncapexrevisionoverpast~12monthsrevisionon2024Erevisionon2025ENotYesYesNot35%NotYesNotNot-7%-7%-5%-41%-28%130%153%19%0%6%-16%-15%-12%Rule3-positivedemandYesYesYesYesNotNotPotentialforconsolidationandnormalizedreturnsConclusionsHighpotential(HHI=2200)Lowpotential(HHI=330)Highpotential(HHI=2900)Midpotential(HHI=1500)Midpotential(HHI=2000)Lowpotential(HHI=300)Midpotential(HHI=1250)4232371Supplystructure62546%22%11%22%Numbersofproducers(outerring)andmarketshares(innerring)19%6133%636%25%39%54%21%73%50%650%56%20%39%22%Group1Group2Group35%213%28%1817555493235SteepnessofcostcurveSteepFlatSteepSteepSteepFlatSteep(1-OCF/Sales)cashloss100%96%92%102%99%99%97%90%2023A1Q24Acashprofit90%88%98%98%95%92%93%88%77%78%81%72%72%EntrybarriersHigh27%LowHigh12%Mid6%Mid18%Low4%MidROIC/Riskadjratio4.3x6%0.9x1.3x0.5x5.4x1.2x16%1.1xGovernmentsupportandshareholdingsSOEshares(left)Subsidy/OCF(23A)(right)15%43%2%7%10%10%28%7%30%9%49%5%44%7%%SOESHsubsidy/OCF%SOESHsubsidy/OCF%SOESHsubsid/OCF%SOESHsubsidy/OCF%SOESHsubdy/OCF%SOESHsubsdy/OCF%SOESHsubsidy/OFSource:Companydata,GoldmanSachsGlobalInvestmentResearch6August20242GoldmanSachsChinainTransitionExecutivesummarySurpluscapacityinvarioussectorsinChinahasbeenatthecenterofmanydebatesinthecontextofintensifyingtensionsinglobaltradeandothergeopoliticalissues,aswellasthedeeplevelofimbalancesthathavebeenbreached.Forexample,in1Q24A,Chinesecapacityinsolarmodulesandlithiumbatteriesreached150-200%oftheglobaldemandpool,whilemorethan50%ofindustrysupplyinsolar,electricvehicles,steel,andconstructionmachinerygeneratedzeroornegativecashmargins.Inthisreport,wefocusonforward-lookingfactorsthatwillleadtopotentialcyclicalturnsahead.Webelievetheturnofthecycle,orchangesinimbalances,ratherthanabsoluteexcesssupply,willpredominantlydriveboththepathofindustrypricingandmargins,andthedirectionoftravelofChineseexports.WhywearewritingthisreportCashmarginsdrivetheCapexcycle,andaWeconcludethatChinesemanufacturersarerespondingtopoorpro?tabilityanduncertaintiesaroundlimitationstomarketaccesstotheUSandEU,pre-emptivelyadjustingthepaceoffutureadditionsofcapacity,incontrasttoconsensusnarratives.Weexpectarebalancinginsupplyversusdemand,andarestorationinpro?tthrough2028-forearlyin?ectingsectorsweexpecthighercapacityutilization(from54-55%to69-79%)andexpandingunitcashpro?t(from-Rmb0.04toRmb0.11/wforsolar,andRmb122toRmb137/kWhforbatteries)overtheperiod.potentialrebalanceofsupplyvs.demandEx-ChinamarketshareofChinesesupplywilldeclineordecelerateAsaresult,theexpandingshareofChinesesupplytotheworld(i.e.,theex-Chinamarket),willdeceleratesharplyordeclineinmostsectors,includingnotablein?ectionstakingplaceinnewenergysectors.Speci?cally,weexpectthemarketsharesofChinesesupply,intermsofbothChineseexportsandpotentialoutputfrommoreex-ChinacapacitydevelopedbyChineseproducers,willbecomestagnantonaverageacrossoursamplesectors,versusa10%increasein2020A-23A.Despiteamuchdeceleratedgrowthoutlook,thetrade-offbetweenlowervolumesandpotentiallyhigherpricingmaystillbeenoughtosupportareasonablybetteroutcomeintermsofthecontributionsofthesesectorstoChina’sGDP/economy.Whichsectorsarelikelytorebalance?rstOnasectorlevel,weexpectpositivecyclicalrisks(ofimprovingS/Dbalance)forsolarmodulesandlithiumbatteries,butpersistent/risingnegativecyclicalrisks(ofexcesscapacity)inelectricvehiclesandpowersemis(IGBT).Weexpectsteelandconstructionmachinerytoremaininstructuralexcesssupply,andairconditionerstoremaininbalance.Despitenon-marketdrivenfactors,weexpectcapitalinvestmentswillnolongerbesupportedimminentlyforsolarmodulesandlithiumbatteries,butthinkitmaytake2-3yearsforpowersemisandelectricvehiclestochangecourse.WhatmakesourworkdifferentWhatmakesourworkdifferent:Webelievebasiceconomics,includingcashmarginsandtheCapexcycle,aredominantforcesdrivingindustrycyclesinChina.WeutilizeindustryCapexrevisiontrends,ratherthanabsolutecapitalspending,tore?ectincrementalsupplyresponsestomarketconditions,andgaugecapacityexpansiontrendsbeyond2024-25E.Ourproprietaryanalysisutilizing(1)The“RuleofThree”;and(2)tippingpointsde?nethebottomofacycle,andquantifythelimitationofnon-marketdrivensupportingfactorsoncapacityexpansioninadowncycle.6August20243GoldmanSachsChinainTransitionWeselectedsevensamplesectorsforouranalysisastheyrepresentawiderangeofChinesemanufacturingsectors,allwithexcesscapacityinthepastoratpresent,andtheyre?ectthegrowingpresenceofChinesesupplyintheglobalmarket.Onanaggregatebasis,in2023Athesesevensectorscontributed6.6%ofChina’sGDPand21.9%ofGDPgrowth,andtheyheldanaverage37%marketshareintheex-Chinamarketfortheirrespectiveproducts(versus27%in2020A).Exhibit2:Cyclicalandstructuralrisksofsupply/demandimbalances-theoutlookforsevenselectsectorsinChinaGrowingdemandPositivecyclicalriskofrestoringS/DbalanceNegativecyclicalriskofbuildingexcesscapacityPowersemis(IGBT)SolarmodulesLithiumbatteriesElectricvehiclesPositivecapexrevisions,Negativecapexrevision,acceleratingcapacityadditiondeceleratingcapacityadditionairconditionerstructionachinerySteelUnlikelyscenarioNegative-structualexcesssupplyContractingdemandSource:GoldmanSachsGlobalInvestmentResearchThecurrentimbalance-inaglobalcontextIsthereovercapacityinthesesectors?Yes,inourview,basedonnumbersofindicators.Asof2023A,weestimatethatChinesecapacityin?veofthesesevensectorsishigherthantheentireglobaldemandpoolfortheirrespectiveproducts.Inparticular,Chinesesolarmodulescapacityisequivalentto200%ofglobaldemand,whilelithiumbatteriesequatesto150%.Capacityutilizationratesofthesevensectorsrangedfrom30-87%asof2023A,versus41-95%in2020-21A.Pricesofrespectiveproductshavedeclinedby10-55%(formostsectors)vs.early2023,asaresultofworseningsupplyanddemandimbalances.Potentialin?ections-cashmarginsandtheCapexcycleIn1Q24,morethan50%ofindustrysupplygeneratedzeroornegativecashmargins(inmostofoursamplesectors).Therewerenotablerevisionsinproducers’2024-25ECapexplans-forexample,anaveragecutof28-41%forlithiumbatteries,butanupwardrevisionofover100%forpowersemis(IGBT),andmixedforelectricvehicles.Changingfundamentalsarereshapingpotentialin?ectionpoints,bothpositivelyandnegatively,takingindustrycapacityutilizationratestoverydifferentplacesversuswhere6August20244GoldmanSachsChinainTransitiontheyaretoday.ExtrapolatingfromCapexrevisiontrendsoverthepast12monthstoapotentialcapacityoutlookin2026-28E(asimpli?edscenarioversusGSebasecases),weseecapacityutilizationratespotentiallyimprovingforsolarmodulesandlithiumbatteries(from54-55%to69-79%).Ontheotherhand,acceleratingCapexinpowersemis(IGBT)andthemixedtrendinelectricvehiclessuggestadeterioratingcapacityutilizationrate(from78%to41%),andpoorvisibilityonanyimprovement,respectively.Weestimatethetimetothetippingpoint(i.e.,whenCapexrevisionsbecomeinevitable)aswhenbothpro?tabilityandbalancesheetsfailtosupportaccesstocapitalandexpansion.Thislooksimminentforsolarmodulesandlithiumbatteries,butitcouldtake2-3yearsbeforethecoursechangesforelectricvehiclesandpowersemis.Reasonsbehindtheimbalances-largescaledemandgrowthThecommonfactorinsectorsthathaveexperiencedexcesscapacityhasbeentheuniquepathofChinesedemandgrowthoverthepastfewdecades.Ratherthancyclicalswings,Chinesedemandtypicallymovesfromalowbase,thenincreasesatanastonishingscaleandpace-makingitextremelychallengingtoestimateapotentialmarketsize,especiallyatthebeginningofacycle.Combinedwitharapidsupplyresponse,theriskofimbalancesincapacityanddemand,onalargescale,isthereforeelevatedbynature.Governmentsupportforbothsupplyanddemandcanbemeaningfulandcanexacerbatethemismatchbetweencapacityanddemand.However,wedonotconsiderthistobeade?ningelementthataltersthebasicsofeconomicsonasustainablebasis.Asof2023A,weestimatetheaveragegovernmentsubsidy/rebateaccountedforonly2-10%ofEBITDA(oroperatingcash?ow).Beyondcycles-itisaboutthestrengthoftopplayersandentrybarriersBeyondthecycle,ourassessmentofindustrystructuresandcostcurvesyieldopportunitiestoinvestinsectorswithstrongreturns.Welikesectorswith:(1)astrongmarketpositionoftoptierproducers(inbothmarketshareandcostadvantage);and(2)higherentrybarriersthatprotectthestateofconsolidation.StockpicksWehighlight11stocksthatprovideexposuretobothcyclicalin?ectionsand/orstructuralstability.Pleaseseeoursummaryatthebackofthisreportandrefertothebelowlinksforadetailedanalysis.Chinasolarsector-closertoin?ectionChinaelectricvehiclesector-noturnyetChinalithiumbatterysector-in?ectiononthehorizonChinapowersemissector-heatingupChinaairconditionersector-stayingcoolChinaconstructionmachinerysector-structuralsupplysurplusheretostay6August20245GoldmanSachsChinainTransitionDe?ningexcesscapacityInthisreport,weassessthedegreeofexcesscapacitybyanalyzingsevensectors:1)solarmodules,2)electricvehicles,3)lithiumbatteries,4)powersemis(IGBTchipsets1),5)constructionmachinery,6)airconditioners,and7)steel.ForamorecompletepictureofChina’sself-suf?ciencybyindustry,pleaserefertoourAugust2023reportChinainTransition:Atthecrossroadsofthesupplychain.OursevensamplesectorsExhibit3:ThecontributionofoursevensamplesectorstoChinaGDPandexports-morethan20%forbothGDPgrowthandchangeinexportsExhibit4:Capacityutilizationratesinpriordowncyclesandatpresent(%)-notattheworstpoints,butstillofdeepconcernCapacityutilizationrateinpastdowncyclesandatpresent(%)ContributiontoChinaGDPandexportbysector(%)50%0%0%20%20%40%40%60%60%80%80%100%ElectricvehiclesSolarmodulesLithiumbatteries100%787%Powersemis(IGBT)(2023A)Steel(2012-15A)40%30%20%10%0%654321071%Powersemis(IGBT)AirconditionersAirconditioners(2015-16A)Solarmodules(2023A)Lithiumbatteries(2020A)Electricvehicles(2020A)58%21.9%20.5%44%41%ConstructionmachinerySteel7.8%6.6%25%OthersConstructionmachinery(2014-16A)17%2023AGDP2023AGDPgrowth2023Aexports2020-23AchginexportPastdowncycles2024E*IGBTdataonlystartedin2019Awithutilizationrangingfrom87%-98%Source:Companydata,GoldmanSachsGlobalInvestmentResearchSource:NBS,ChinaCustoms,Wind,GoldmanSachsGlobalInvestmentResearchExhibit5:Domesticpricingforkeyproductsdeclined10-55%vs.early2023Exhibit6:QuarterlyEBITDAmargin(%,weightedindustryaverage)-softenedEBITDAmarginingeneral,impliesmorepro?tcontractionifcombinedwithpricedeclineNormalizedpricing(Jan23=100%)QuarterlyEBITDAmargin(%)140%120%100%80%Solarmodules40%30%20%10%0%SolarmodulesElectricvehiclesElectricvehiclesLithiumbatteriesLithiumbatteriesPowersemis(IGBT)Powersemis(IGBT)ConstructionmachineryConstructionmachinery60%AirAirconditionersconditioners40%SteelSteel-10%Source:Wind,CEIC,Companydata,GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearch1IGBT-insulatedgatebipolartransistors,powersemiconductordevicesservingaselectronicswitchesinpowerelectronicsapplications.6August20246GoldmanSachsChinainTransitionIsthereovercapacity?Yes,inaglobalcontextThetextbookde?nitionofexcesscapacityinanindustryreferstonon-utilizedcapacitythatexceedsdemand.DebatesaroundthedegreeofovercapacityinChinausuallydifferwithrespecttodomesticdemand,globaldemand,incrementalexports,and/orthefuturedemandoutlook.Isthereovercapacity?Yes,onseveralindicators.Weestimatethat?veoutofoursevensamplesectorshavecapacitythatexceedsglobaldemandby10-100%.Inparticular,Chinesecapacityofsolarmodulesandlithiumbatteriesisequivalentto200%and150%oftheglobaldemandpool,respectively-ahigherlevelofexcesscapacitythanothersectors.Thebestre?ectiononthebalanceofcapacityversusdemandisindustrycapacityutilizationrate,de?nedasoutputas%ofcapacity.Fiveoutofoursevensectorshadcapacityutilizationof30-60%in2023A,wellbelow80%typicallyneededforabalancedmarketincapitalintensivesectors.Exhibit7:ExcessChinesecapacityinthecontextofglobalandChinadomesticdemand(2023Aand2026-28E)-solarmodulesandlithiumbatteriesareinhighlevelofexcesscapacityatpresent250%Highlevelofexcesscapacity200%Solarmodules-23ALithiumbatteries-23A150%100%50%0%ExcessversusglobaldemandSolarmodules-28EElectricvehicles-23AAirconditioners-23AAirconditioners-28EConstructionmachinery-23AExcessversusChinademandElectricvehicles-28ESteel-23AConstructionmachinery-28EPowersemis(IGBT)-28ELithiumbatteries-28ESteel-28EPowersemis(IGBT)-23A0%50%100%150%200%250%300%350%400%450%500%Chinacapacityas%domesticdemand(%)*2026-28EcapacityisextrapolatedbasedonCapexrevisionsoverthepast~12monthsSource:Companydata,GoldmanSachsGlobalInvestmentResearchRiseofexports,thustradetensionFrom2020-2023A,Chineseexportsfor?veofthesevensectorsincreasedby190-720%(basedonvolume).Throughdirectexports,orindirectlyintheformof?nishedgoods,themarketshareofChineselithiumbatteryexportsincreasedby40%intheex-Chinamarket,15%forelectricvehicles,5%forsolarmodules,and3%forpowersemis(IGBT,combinedwithdomesticsubstitutionthatisequivalentto11%oftheex-Chinamarket),6August20247GoldmanSachsChinainTransitionand2-10%forconstructionmachineryandsteel.TheriseinChineseexportsisnotnecessarilytheresultofexcesscapacity.However,expandingexcesscapacityandworseningcapacityutilizationcanstillspilloveritsimpactthroughhigherexportsandpricingpressure.Changesinmarketshare,ratherthantheabsolutemarketshare,canbemoresensitiveinsomeregionsifthoseexportsimpactsectorsthatarestrategicallyimportanttolocalmanufacturersandemployment-weseehighertensioninglobaltrade,asevidencedbytherecentchangesintariffandduties,andtradeinvestigationsandprobesagainstChineseexportsforselectedproducts.OneexampletothecontraryisChineseairconditioners-whilemaintainingaprevailingex-Chinamarketshareof55%(~70%ifbasedonunitsales),exportshavenotbeensubjecttothesamedegreeofpushbackinglobaltrade,whichwebelieveisduetotheabsenceoflargechangesinitsglobalmarketshare.Weestimate40-60%ofChineseexportsweredesignatedfortheUSandEUin2023Aforsolarmodules,lithiumbatteriesandelectricvehiclessectors,wherethereisrelativelyhigheruncertaintyincontinuedmarketaccess.Exhibit8:Relativechangeinex-Chinamarketshare(forChineseexports)-mostkeyproductsholdamoredominantmarketshareversusthreeyearsagoExhibit9:Chineseexportbreakdownbyregion-nearlyhalfofChineseexportsofnewenergysectorsgototheUSandEUChineseexportbreakdownbyregions-2023A(%)100%MarketshareofChineseexportsinex-China(%)M1100%mktshr-2020AChgsinmktshr-2020A~23A80%60%80%60%40%20%0%Domesticsubstitution2020A~23A50%30%40%20%0%49%41%1%30%20%12%27%16%5%5%1%%USEUSEAOthersSource:Companydata,GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearchExhibit10:ChangesinChina’sdomesticdemandandexports(2020-2023A;volumes)-strongexportsandstrongdomesticdemandExhibit11:CurrenttariffsonselectedChineseproductsandrecentchangesimplymoreintensi?edtradetensionsChangesinChina'sdomesticdemandandexports2020-2023A(%)800%SectorSolarmodulesElectricvehiclesYear2024Exportlimitations/tariffsonChineseimportsSection301:10%tariffimposedbytheUSonasuiteofPVproductsin2018,revisedupto25%in2019and50%in2024.InMay24,theUSannouncedanincreasetariffsonEVsimportedfromChinato100%(from25%),effectiveAug24.InJun24,theEUannouncedanincreasetariffsonbatteryEVsimportedfromChina(to27.4%-48.1%from10%)provisionallyinJul24;afinaldecisionwillbemadeinNov24).717%DomesticdemandChineseexports669%20242024597%573%600%400%200%0%338%194%265%Lithiumbatteries2024InMay24theUSannouncedanincreaseintariffsonimportsofbatteriesandbattery-relatedproductsfromChina(to25%from0-7.5%)in2024-26.202%68%24%16%22%-11%Powersemis2024(IGBT)Construction2018-19machineryIn2024,theUSannouncedanincreaseintariffsonsemiconductorsto50%from25%by2025.-69%TheUSraisedtariffsonconstructionmachinery(excavators,concretepumps,loadersandroadmachinery)to25%from10%.In2018,theUSincreasedtariffsonsplitairconditionersimportedfromChinato25%from2%.-200%Air2018conditionersSteel2024In2024theUSincreasedtariffsonsteelproductsimportedfromChinato25%from0-7.5%.Vietnamisalsodiscussingtariffhikes.Source:Companydata,GoldmanSachsGlobalInvestmentResearchSource:Companydata,GoldmanSachsGlobalInvestmentResearch6August20248GoldmanSachsChinainTransitionCyclicalin?ectionsandstructuraltrapsMostcasesofexcesssupplyarecyclical,inourview.Wefocusourwork,includingthe“RuleofThree”andtippingpointanalysis,onindustrytrendsofcapacityadditions,usingpro?tability,Capexrevisions,demandtrends,aswellascash?owgenerationandbalancesheetstrengthdepletion,togaugethein?ectionofcapitalinvestmentforcapacityadditions,whichprovidesaforward-lookingpictureonpotentialchangestoimbalancesandcapacityutilizationrates.Exhibit12:UsingourRuleofThreeandtippingpointanalysistode?nethecyclicalbottomandtiming-solarmodulesandlithiumbatterieswouldbethe?rsttwosectorstoin?ectpowersemis(IGBT)airsolarmoduleslithiumbatterieselectricvehiclesconstructionmachinerysteelconditionersCyclicalinflections-RuleofThreeandtippingpointframeworksConclusionsStableNotBottomingYesBottomingNotbottomingYesNotbottomingYesNotbottomingYesNotbottomingNotRule1-cashmarginNot%ofindustryatnegativeOCF/sales19%6%21%22%26%(1Q24A)PositiveZero50%50%51%49%73%81%78%100%74%NegativeRule2-CapexrevisionNotYesYesNotNotNotNotcapexrevisionoverpast~12monthsrevisionon2024Erevisionon2025E-7%-7%-5%-41%-28%35%-15%130%153%19%0%6%-16%-12%Rule3-positivedemandYesYesYesYesYesNotNot(demandtrend)17%35%34%32%33%9%-4%-8%36%1Q242Q24YTD1%11%22%29%49%43%10%10%-3%-4%21%5%Timetoreachtippingpointnocapexexpansion0-1year1year3years1-2yearsnocapexexpansionnocapexexpansionSource:Companydata,GoldmanSachsGlobalInvestmentResearch“RuleofThree”-tode?netheindustrybottomThebelowisquotedfromTakingapurecyclicalapproachbyJimCovel