in the face of the industry volume, overcapacity, low-cost game superposition of photovoltaic winter, as a leader of the xiexin group also obviously feel the cool.

Huaxia Energy Network (Public Number hxny3060) learned that on the evening of March 15, Xiexin Technology (HK:3800), a Hong Kong-listed company under Xiexin Group and a major silicon and silicon wafer business, announced that it would achieve revenue of 33.701 billion yuan in 2023, down 6.2 year on year. Net profit attributable to the parent was 2.51 billion yuan, down 84.7 percent year on year.

This performance reflects the industry reality of the sharp fall in silicon prices under the PV surplus cycle. As the main flagship of GCL Group, the profitability of GCL Technology is related to the "purse" of the entire group ". Such a decline in performance is no small pressure on GCL Group.

In the face of the industrial downturn, GCL Group, which has a large family and industry, is facing a new test. How to cross the cycle, winter smoothly and recover as soon as possible is a difficult problem for Zhu Gongshan, the "helmsman.

However, Zhu Gongshan said, "Don't panic too much." He said: In the 33 springs and autumns that GCL Group has gone through, it has gone through the industry's "four ups and three downs" cycle shocks, and has experienced countless life and death tests. The spiral elimination and upgrading competition is inevitable in the market, and everything is normal. Excess cycle is always excellent enterprises to eliminate backward enterprises.

This is where the calmness in GCL's heart lies. Looking at Xiexin's industrial layout, the "three secret weapons" of granular silicon, mobile energy and perovskite are the confidence of Xiexin Group to cross the cold winter.

GCL Group, which has been climbing all the way over the past few years, needs a hearty battle to polish the "crown" on its head. Now is the time to accumulate strength and explode again.

difficult transformation, play a set of "combination boxing"

on March 18, the third day after the announcement of the results, senior executives such as Zhu Gongshan, chairman of the board of directors of GCL Technology, Zhu Yufeng, vice chairman, and Lan Tianshi, co-CEO, appeared at the site of GCL Technology's 2023 annual results conference to interact with investors at home and abroad.

regarding the reason for the decline in performance, xiexin technology believes that it is due to the decline in polysilicon market prices in 2023. Since 2023, polysilicon prices have continued to decline. At the beginning of 2023, the price of polysilicon was about 240000 yuan/ton. But this month, the price of polysilicon has been around 60000 yuan/ton, a drop of nearly 70%.

Of course, when the entire photovoltaic industry has entered a period of adjustment, the decline in performance is not limited to GCL Technology. Daquan Energy (SH:688303), one of the four silicon giants, recently released a performance bulletin showing that total operating income in 2023 was 16.329 billion billion yuan, down 47.22 percent from the same period last year, while net profit attributable to the parent was 5.763 billion billion yuan, down 69.86 percent from the same period last year.

In contrast, GCL Technology's performance is acceptable. Xiexin Technology said: If the impact of the sale of associates and asset impairment is deducted, the company's net profit attributable to the parent is 7.5 billion yuan, and the actual profit decreases by about 53%.

The decline in performance for a while is nothing to GCL, which has experienced several difficult transitions. In the last winter of the industry to date the trough rebound process, but also just a small spray.

Xiexin Group was established in 1990, which is a traditional private power enterprise. Since Poly Xiexin (the predecessor of "Xiexin Technology") was established in 2006 and invested 7 billion yuan in Jiangsu Zhongneng polysilicon project, Xiexin broke into the photovoltaic industry in the reckless era. Subsequently, GCL's photovoltaic empire expanded rapidly, and in a few years it became the absolute leader in the field of silicon materials and wafers, known as the "world's silicon king".

However, with the extension of GCL's business layout to the upstream and downstream of the photovoltaic industry chain, constraints such as too long a front and large power station burdens have emerged. After 2018, the unexpected "531 New Deal" was introduced, and the photovoltaic industry suffered a crisis. Coupled with the decline of photovoltaic subsidies and the serious problem of subsidy arrears, Xiexin New Energy (HK:0451), which has a large number of heavy-asset photovoltaic power stations, has been hit hard, with the company's debt ratio exceeding 80% for several consecutive years.

In the end, this huge group with four listed companies was dragged into trouble. GCL Group's main source of profit, Poly GCL, has been losing money for years until 2021, with liabilities once as high as $70 billion. At that time, the industry did not like Xiexin's voice began to appear, and even thought that Xiexin would decline like those once brilliant photovoltaic leaders.

In order to get rid of the predicament, GCL began a difficult business adjustment and played a set of "combined punches":

xiexin technology has accelerated the pace of research and development and production expansion of granular silicon and realized mass production of granular silicon in 2021. Xiexin New Energy seeks to transform into light assets and frequently sells power stations. By last year, all heavy assets of power stations have been cleared. With Xiexin Energy Division (SZ:002015) as the main focus, Xiexin Group has continuously opened up new business battlefields, investment in IDC (Internet Data Center), hydrogen energy, wind power, mobile energy, computing power, perovskite...

after five years of hard transformation, xiexin's business adjustment has now achieved initial results. A GCL insider told Huaxia Energy Network (public number hxny3060) that "GCL Group has survived the most difficult time".

take xiexin integration (SZ:002506), which focuses on battery and component businesses, as an example. previously, xiexin integration was forced to shrink strategically due to the poor performance of brother companies. With the second half of 2021, the performance of Xiexin Technology and other brother companies improved, and the days of Xiexin integration were gradually better, with the confidence to expand production on a large scale to fight for its market position.

From 2015 to 2018, GCL Integration ranked among the top ten global PV module shipments for five consecutive years. However, starting from 2019, there will be no Xiexin integration in this list. A few days ago, good news came-according to the 2023 global component shipment ranking released by InfoLink, xiexin integration returned to the top 10 in the world.

The performance forecast released by GCL Integration also shows that in 2023, it is expected to achieve a net profit of 0.15 billion yuan to 0.22 billion yuan, up 152.9-270.9 year-on-year.

In addition to GCL integration, the "days" of the other two listed companies are getting better and better. GCL Nengke's net profit for the first three quarters of 2023 was 0.926 billion yuan, up 40.42 percent year-on-year; GCL New Energy's loss in the first half of 2023 decreased by about 57.94 percent, and its debt ratio fell to 47.5 percent.

Facing the cold winter, holding three "secret weapons"

Although all business lines have performed well, in the face of the current cold winter period of the industry, GCL's resilience is still facing a test. Huaxia Energy Network (Public Number hxny3060) found that Xiexin has at least three "magic weapons", which are expected to bring it imaginative business growth, which is hard-core strength that other competitors do not have.

The first is granular silicon.

Among the leading silicon companies, GCL Technology has exclusively put into production granular silicon. As early as 2012, Xiexin Technology achieved a pilot scale of 1,000 tons of granular silicon. After 2021, GCL Technology has achieved mass production of granular silicon. At the end of 2023, GCL Technology announced the abandonment of rod-shaped silicon, a comprehensive transformation of granular silicon, and has four major granular silicon production bases in the country, with a production capacity of 420000 tons. GCL Technology also said that it will increase its granular silicon production capacity to 500000 tons by the end of 2024.

Compared with rod-shaped silicon, granular silicon has the advantages of low cost, more environmental protection, and higher degree of automatic production. Take Xiexin Leshan's granular silicon project as an example, its production cost has dropped to 35.68 yuan/kg by July 2023. Compared with the current cost level of 49700 yuan/ton (2023Q3), it is 28% lower.

according to xiexin technology, the market share of its granular silicon products has exceeded 20%. With the further release of particle silicon production capacity, the future is expected to compete with rod silicon, and will support the growth of GCL technology performance. After the price of silicon enters the era of parity, the competitiveness of granular silicon will be further highlighted.

Next is mobile energy.

In recent years, the mobile energy business has become a new focus of GCL Energy and is expected to become a new growth pole in the future.

GCL's mobile energy business includes two parts: charging and power exchange of new energy vehicles. At present, GCL Energy has operated more than 20 charging pile stations. According to data from November last year, 78 power stations have been put into operation.

The charging and swapping market for new energy vehicles is vast. According to Guotai Junan data, as of September 2023, China's charging pile ownership of 7.642 million, the ratio of vehicle piles is about 2.4:1. This is still a big gap from the goal of "2025 vehicle-pile ratio 2:1 and 2030 vehicle-pile ratio 1:1" proposed by the Ministry of Industry and Information Technology. In terms of power station exchange, Professor Ouyang Minggao of Tsinghua University once said, "Compared with fast charging and super charging modes, the power exchange technology has shorter power supply time and lower operating cost per ton kilometer."

In addition, it is worth noting that Xiexin Nengke is also actively laying out the "cutting-edge product" in the charging pile market-liquid-cooled supercharging. On June 29 last year, GCL signed a cooperation agreement with Huawei Digital Energy, planning to build and operate 50 all-liquid-cooled supercharging stations in the Yangtze River Delta and the Greater Bay Area within three years to quickly occupy the market.

Finally, the perovskite.

As a cutting-edge technology in the field of photovoltaic, GCL will naturally not be absent. In 2021, Xiexin Optoelectronics, which focuses on perovskites, built the world's first perovskite 100 MW pilot line, taking the lead in shifting the size of perovskite components from square centimeters to square meters in the industry, becoming the only perovskite enterprise in the world with product research and development in a commercial size of 1.2 meters by 2.4 meters.

Subsequently, GCL Optoelectronics's perovskite research and development advanced by leaps and bounds. So far, the efficiency of 2 square meters single junction components of Xiexin Optoelectronics has reached 19.04, and the efficiency of 0.2m ² perovskite laminated components has reached 26.34. And, by the end of 2023, GCL Optoelectronics GW production line to achieve the foundation. At the foundation laying ceremony at that time, Zhu Gongshan said, "from 2023, perovskite battery technology will officially enter the first year of mass production."

Granular silicon, mobile energy and perovskite are the three "secret weapons" for GCL to attack the city and face the cold winter ". Facing the future, GCL has accumulated full energy, and only when the conditions are ripe, it is expected to explode and use new businesses to develop a broader territory.

"Survive loneliness with tenacity, and your eyes are full of winter jasmine." In the 2024 New Year's speech, Zhu Gongshan expressed his state of mind in this way. This may also be a true portrayal of GCL Group through this winter.

(please indicate the source for reprinting, source: Huaxia energy network, micro signal: hxny3060)