economic observer reporter Cai yuekun the 2023 performance forecast of listed companies has been released one after another, and the report card of photovoltaic industry has been unveiled. While the performance of many photovoltaic companies is expected to be happy, there are also some companies in the fourth degree of sudden change in performance, growth "stall".

flush iFinD data show that as of January 31, 2024, 48 listed companies in the photovoltaic industry (including photovoltaic equipment and photovoltaic power generation) have issued 2023 annual performance forecasts, of which 23 have a pre-increase in net profit (including a slight increase); There are three expected to turn around losses, including Dike (300842.SZ), Mubang Gaoke (603398.SH) and Luxiao Technology (002617.SZ). Overall, more than 50% of the company's performance reported good news. Listed companies with good performance growth mainly include GCL Integration (002506.SZ), Jingke Energy (688223.SH), Oriental Sunrise (300118.SZ), Tianhe Solar (688599.SH) and so on.

there are 10 listed companies whose net profits are pre-reduced (including slightly reduced), including aixu shares (600732.SH), jinbo shares (688598.SH), hongyuan green energy (603185.SH), daqo energy (688303.SH), TCL central (002129.SZ), etc. There are 9 companies with net profit losses, including loss reduction and loss increase.

according to the analysis of Zhongyuan Securities Research Institute, from the annual performance forecast of photovoltaic listed companies that have appeared, on the one hand, the demand of photovoltaic market at home and abroad is very strong, and all links benefit from the growth of market shipments; on the other hand, due to the large expansion of production in each link, the overall performance of the plate is expected to show a downward trend, while the specific sub-sectors are obviously differentiated. In particular, silicon wafers, batteries, components and other main industrial chain profit pressure, auxiliary material link profit is better than the main material.

Performance differentiation

Judging from the disclosed 2023 performance forecast, the performance differentiation of the photovoltaic industry chain is a foregone conclusion.

On January 30, Aixu, a leading photovoltaic cell company, issued an announcement that the company's net profit attributable to the owner of the parent company in 2023 is expected to be 0.735 billion to 0.775 billion yuan, which will decrease compared with the same period last year. About 1.553 billion yuan to about 1.593 billion yuan, a year-on-year decrease of 66.71 to 68.43.

On January 30, Daquan, one of the leading silicon materials companies, issued an announcement that the net profit attributable to the owner of the parent company in 2023 is expected to be 5.7 billion yuan to 5.8 billion yuan, which will decrease compared with the same period last year. About 13.321 billion yuan to about 13.421 billion yuan, a year-on-year decrease of 69.67 to 70.19.

on January 27, TCL central, one of the leading silicon wafers, announced that it expected to realize net profit attributable to shareholders of listed companies between 4.2 billion yuan and 4.8 billion yuan in 2023, with a year-on-year decline of about 30% to 38%. Net profit after deducting non-profit was between 3.1 billion yuan and 3.6 billion yuan, down 44% to 52% year on year.

TCL Central's net profit in the first three quarters of 2023 was 6.188 billion yuan. According to this calculation, the company's fourth quarter net loss of 1.4 billion yuan to 2 billion yuan.

In contrast, the leading PV module companies that focus on the N-type TOPCon (tunneling oxide passivation contact) technology route have performed brightly.

On January 30, GCL Integrated disclosed that it is expected to achieve revenue of 15.5 billion yuan to 17 billion yuan in 2023, a year-on-year increase of 85.6 to 109; it is expected to achieve a net profit of 0.15 billion yuan to 0.22 billion yuan, a year-on-year increase of 152.9 to 270.9.%.

On the same day, Dongfang Sunrise disclosed that it expects a net profit of 1.32 billion to 1.7 billion yuan in 2023, up 39.73 to 79.95 percent year-on-year. SkyTeam also disclosed that the net profit attributable to the owners of the parent company in 2023 is expected to be about 5.272 billion yuan to about 5.828 billion yuan, an increase of about 1.592 billion yuan to about 2.147 billion yuan compared with the same period last year, an increase of 43.27% to 58.36%.

On January 26, JinkoSolar disclosed that the net profit attributable to the owners of the parent company in 2023 is expected to be 7.25 billion yuan to 7.95 billion yuan, which will increase by about 4.314 billion yuan to about 5.014 billion yuan compared with the same period last year., An increase of 146.92 to 170.76 percent year-on-year.

As of February 1, 2024, Jingao Technology (002459.SZ), Longji Green Energy, a leading photovoltaic module company that has identified BC batteries (back contact batteries) as the main technical route, and Tongwei, a leading photovoltaic silicon leader (600438.SH), have not yet disclosed their 2023 earnings forecast.

TOPCon Dividend Gradual Release

behind the performance differentiation of photovoltaic enterprises, it can be seen that listed companies focusing on TOPCon battery technology in 2023 have already received the first wave of technology dividends, with both revenue and net profit increasing. Taking JinkoSolar, which has skyrocketed performance, as an example, the company said: In 2023, while the total installed photovoltaic capacity in the world has steadily increased, the demand for N-type advanced products in the photovoltaic market has gradually become the mainstream. With the comprehensive advancement of technological change, new and old production capacity accelerated iteration, the change of industry supply and demand relationship caused the overall downward trend of end product prices. In the face of fierce competition under the fluctuation of the industry cycle, the company relies on the continuous leading of N-type TOPCon technology and products, as well as the advantages of global operation and integrated production capacity, to achieve rapid volume of N-type component shipments, driving the operating performance to increase significantly compared with the same period last year.

in addition, the performance growth of xiexin integration also mentioned that Wuhu battery base phase I 10GW (GW, unit of installed capacity) TOPCon battery capacity will be fully put into operation in October 2023, with excellent capacity climbing speed and product yield, effectively improving the company's own battery capacity ratio.

In contrast, the performance of some BC battery concept listed companies in 2023 was poor.

Take Aixu shares as an example. In its 2023 performance forecast, the company said: During the reporting period, the company steadily and solidly pushed forward the landing of N-type ABC battery and module production capacity, and the construction and operation of new production capacity brought about an increase in management costs. In 2023, as ABC, TOPCon, HJT and other N-type technologies continue to introduce new technologies, technological progress leads to industry changes, the overall price of the photovoltaic industry chain throughout the year is in a volatile downward range, the fourth quarter industry competition is particularly fierce, photovoltaic product prices fell rapidly. The company's main business battery and component product prices fell, the provision for impairment of fixed assets and inventory decline, which had a greater impact on the fourth quarter results.

regarding the battery technology route, zhong baoshen, chairman of longji green energy, said to the public as early as mid -2023: TOPCon has limited improvement in conversion efficiency relative to PERC, and the overall production capacity of TOPCon is currently surplus. considering input and output, the future economy is in doubt.

the league of nations securities research report disclosed that TOPCon led the iteration of n-type battery chips, with the penetration rate rising higher than expected. by the end of 2023, TOPCon's starting and landing capacity is expected to reach 600GW, and the penetration rate will approach 50% in 2024. it will be promoted to the mainstream technology route and further deepen homogenization. we believe that seeking differentiated exports through the landing of new technologies such as HJT and BC is the main direction, which will accelerate the industrial chain.

Performance under pressure

In addition, the above-mentioned listed companies with pre-reduced performance in 2023 also disclosed an important reason for the decline in performance, which is closely related to the downward price fluctuation of the photovoltaic industry chain and the further compression of profit margins.

TCL Central disclosed in the performance forecast that with the release of production capacity in all links of the industrial chain, the terminal installation and upstream supply are moving towards imbalance, the expansion of production capacity leads to intensified competitive games, downward price fluctuations in the industrial chain, and further compression of profit margins. N-type technology products are rapidly iterated, industry production capacity is facing structural adjustment, and backward production capacity is facing shutdown and liquidation.

TCL central said: in 2023, the overall price of photovoltaic industry chain showed a downward trend of fluctuation. in the fourth quarter, the prices of major products fell rapidly to an irrational range, and the profitability of the company's main business was under pressure. At the same time, the one-time book loss caused by the rapid decline of product prices and the disposal of shares in the company had a great negative impact on the company's fourth quarter performance.

Aixu shares also said: in 2023, with the continuous innovation of N-type technologies such as ABC (full back contact solar crystalline silicon cell), TOPCon and HJT (heterojunction cell), technological progress will lead the industry to change. The price of photovoltaic industry chain in the whole year will be in a downward range. In the fourth quarter, the industry competition will be particularly fierce and the price of photovoltaic products will drop rapidly. The company's main business battery and component product prices fell, the provision for impairment of fixed assets and inventory decline, which had a greater impact on the fourth quarter results.

Previously, a person in the photovoltaic industry was worried about the performance of photovoltaic companies in the fourth quarter: the price of photovoltaic modules fell below 1 yuan/watt. If the price of modules continues to fall, it is unlikely for any photovoltaic company. Accepted, some companies may have fallen to cost.

Entering 2024, the price competition in the photovoltaic industry chain is still extremely fierce.

on January 9, 2024, China electric power construction 42GW, China resources power 1.56GW photovoltaic module collection bid opening, a total of about 56 module enterprises to participate in the bidding, reported the lowest price of p-type 0.806 yuan/watt, n-type 0.87 yuan/watt. Judging from the quotation of China Electric Construction Collection, a total of 55 component enterprises participated in the bidding, which can be described as fierce competition.

on January 26, Longji green energy announced the record of investor relations activities, which showed that some investors asked: at present, the price of photovoltaic industry chain has been running to a very low position. how do you view the price changes of subsequent photovoltaic industry chain?

Longji Green Energy said: From the fourth quarter of 2023 to the present, the price of the photovoltaic industry chain has dropped to a very irrational position. Based on such a price level, it is difficult for photovoltaic companies to achieve profitability, which is not conducive to the long-term development of the photovoltaic industry. healthy development. The first quarter is the off-season of market demand. In the second quarter, the global market demand began to gradually increase. It is expected to support the price of the industrial chain and promote the correction of the price of the industrial chain. However, the pressure of oversupply in the market this year is greater. If the price of the industrial chain continues to run at a low level, enterprises with fragile financial conditions and unadvanced technology may be forced to stop production or withdraw, At that time, industrial chain prices may return to rationality.

Zhongyuan Securities Research Institute believes that the low price of photovoltaic products will lead to losses in silicon wafers, batteries, modules, adhesive films and other links in the fourth quarter, and the clearance of backward production capacity will accelerate. Considering the supply of new capacity and the withdrawal of backward capacity, it is expected that the industry will still be in the process of reshuffling, and it will take time for supply and demand to improve.

Major shareholders have increased their holdings

The performance of listed companies is divided, and the-share photovoltaic sector has been hit hard. Recently, some leading listed companies in the photovoltaic industry have announced to increase their holdings.

On January 31, 2024, Tongwei shares disclosed that the company received a notification letter from the controlling shareholder Tongwei Group's plan to increase its shareholding in the company. Tongwei Group intends to increase its shareholding in the company within 12 months from the date of the announcement of the increase plan. Increase holdings of the company's shares through the methods permitted by the Shanghai Stock Exchange trading system, noLess than 1 billion yuan, not more than 2 billion yuan, the total increase in the proportion of not more than 2% of the company's total share capital.

The source of funds for the increase is Tongwei Group's own funds and self-financing. Tongwei shares said in the announcement: "Based on the firm confidence in the company's development prospects and the recognition of the company's long-term investment value, the group intends to implement this shareholding increase plan."

According to the announcement, this increase in holdings plan does not set a price range. Tongwei Group will implement the increase in holdings plan based on its reasonable judgment on the overall market trend and the company's stock value, and combined with the fluctuations in the secondary market. In the twelve months prior to the disclosure, Tongwei Group had no disclosed plans to increase its holdings. Before this increase, Tongwei Group held about 1.97 billion million shares (1974022515 shares) of Tongwei shares, accounting for 43.85 of the company's total share capital. It is worth noting that Tongwei shares did not issue a 2023 earnings forecast.

Leading enterprises in various links in the photovoltaic industry, such as Longji Green Energy and TCL Central, have successively released news of the chairman's increase or repurchase of shares.

On the evening of January 29, Longji Green Energy disclosed that it received a notice from Chairman Zhong Baoshen that it plans to implement the first increase in holdings on January 30, 2024, and will continue to implement its increase in holdings. It is reported that Zhong Baoshen, chairman of the company, plans to increase his stake in the company within 12 months from October 31, 2023 through the means permitted by the Shanghai Stock Exchange system, with an increase of no less than 0.1 billion yuan and no more than 0.15 billion yuan.

two days after the stock price "flash crash", on the evening of January 30, TCL Central announced that it would spend 62.558 million yuan to buy back nearly 5 million shares.

According to the Guolian Securities Research Report, the PV sector fell 29.3 per cent in 2023 and valuations have fallen to a record low of 12 times. The main driving force of the industry is changing from demand to supply. In this process, the following characteristics are presented: first, "homogenization" and "differentiation" coexist, and cost control + advanced technology is the key to victory; Second, demand and products are divided together, giving birth to multiple technological directions and guiding competition. Third, market segments such as regions and application scenarios will have demand rotation. The increase in demand in 2024 will mainly be in overseas + distributed fields.

Guolian Securities believes that the valuation of the photovoltaic sector is in a downward cycle, and the incentives for this round of adjustment mainly come from internal contradictions in the industry, rather than external policies, that is, the contradiction between "slowing demand growth under a high base" and "homogenized excess supply under the attraction of high profits. The current rate of capacity expansion has declined significantly, inventory growth has slowed but is still high, competition is expected to be more intense, marginal capacity is expected to accelerate in 2024, the sector ushered in an upward inflection point.