economic observation network reporter Zheng chenye photovoltaic industry encountered "hurdle.

on the evening of April 29, 2024, photovoltaic leader longji green energy technology co., ltd. (601012.SH, hereinafter referred to as "longji green energy") disclosed its 2023 annual report and the first quarter report of 2024. Annual report information shows that in 2023, Longji Green Energy achieved operating income of 129.498 billion yuan, a slight increase of 0.39 percent over the same period last year, and net profit attributable to shareholders of listed companies was 10.751 billion yuan, a sharp drop of 27.41 percent over the same period last year.

Quarterly report information shows that in the first quarter of 2024, Longji Green Energy actually lost money: the operating income in the quarter was 17.674 billion yuan, a sharp drop of 37.59 year-on-year; the net loss attributable to shareholders of listed companies was 2.35 billion yuan. The reporter noticed that the last single-quarter loss of Longji Green Energy dates back to 11 years ago, that is, the first quarter of 2013.

As a leading enterprise in the industry, Longji Green Energy's financial report reflects the tremendous pressure faced by the entire photovoltaic industry.

as of April 29, 2024, the reporter of economic observation network combed the 2023 annual report and the first quarter report of 2024 of the 50 constituent stocks of China securities photovoltaic industry index and found that the total revenue of these 50 enterprises in 2023 reached 1.448 trillion yuan, an increase of 161.791 billion yuan over 2022, but the revenue growth rate of 38 enterprises in 2023 was lower than that in 2022, and the revenue of 11 enterprises showed negative growth; in the first quarter of 2024, the situation became even more severe. In that quarter, 14 companies all incurred net losses attributable to shareholders of the parent company.

Industry leader "collective turn loss"

"if people who don't know this industry dare not think about it, just over a year ago, the highest price of silicon exceeded 300000 yuan/ton, and now no one has mentioned the matter of" owning silicon as king." April 28, a photovoltaic module manufacturer in East China sales manager told reporters.

According to the data of the Silicon Industry Branch of the China Nonferrous Metals Industry Association, on April 24, 2024, the transaction price range of polysilicon P-type dense materials was 40000 yuan/ton to 45000 yuan/ton, and the average transaction price was 42800 yuan/Ton, the transaction price range of N-type granular silicon is 42000 yuan/ton to 44000 yuan/ton, and the average transaction price is 43000 yuan/ton.

the "avalanche" of silicon prices, the first impact is the performance of silicon manufacturers.

data show that Xinjiang Daquan new energy co., ltd. (688303.SH, hereinafter referred to as "Daquan energy") realized revenue of 16.329 billion yuan in 2023, a sharp decrease of 14.611 billion yuan from 2022. The net profit attributable to the parent was 5.763 billion yuan, a direct decrease of 13.358 billion yuan from 2022. In the first quarter of 2024, revenue was 2.982 billion yuan, down 38.6 from the same period last year, and net profit attributable to the parent was 0.331 billion yuan, down 2.58 billion yuan, gross sales margin also plummeted from 74.83 per cent in the 2022 annual report to 16.71 per cent in the first quarter of 2024.

For example, Tongwei Co., Ltd. (600438.SH, hereinafter referred to as "Tongwei shares"), which is also a large silicon material factory, will achieve revenue of 139.104 billion yuan in 2023, a decrease of 3.319 billion yuan compared with 2022. To achieve a net profit of 18.246 billion yuan, a decrease of 14.127 billion yuan compared with 2022. In the first quarter of 2024, Tongwei shares also suffered losses. The net loss attributable to shareholders of the parent company in the quarter reached 0.787 billion billion yuan. This is the first time that Tongwei shares have suffered a single-quarter loss since the second quarter of 2016.

It is worth noting that Daqo Energy is still expanding its silicon capacity.

"At present, the price of silicon is approaching the cost line of enterprises in the industry, which brings certain pressure and challenges to the industry and also provides new opportunities for enterprise development. The second phase of the 100000-ton high-purity polysilicon project in Baotou, Inner Mongolia is progressing smoothly and is scheduled to be completed and put into production in the second quarter of 2024. After the project is implemented, the company's cumulative annual production capacity can reach 305000 tons." Daqo Energy pointed out in its first quarter 2024 report.

China Nonferrous Metals Industry Association Silicon Branch in April 24th published a more direct view of the polysilicon market:

"At present, the price of silicon has reached the cash cost of most enterprises, and even fell below the cash cost of some enterprises. Although the price of silicon has been a continuous decline for many weeks, but the current price decline is still less than the downstream expectations, the downstream continued to be bearish, there has been no large-scale low-cost bottoming signs of hoarding. From the perspective of the whole industry chain, under the background of phased oversupply, the main links from industrial silicon to components have fallen below the production cost, and the market presents irrational competition in the short term."

In addition, in terms of silicon wafers, the leading company in this field-TCL Central New Energy Technology Co., Ltd. (002129.SH, hereinafter referred to as "TCL Central") is no better than silicon manufacturers. According to the data, TCL Central achieved revenue of 59.146 billion yuan in 2023, down 11.74 percent from the same period last year, and achieved net profit of 3.416 billion yuan, down 49.9 percent from the same period last year. Similarly, it had a net loss of $0.88 billion in the first quarter of 2024.

"As of the end of the first quarter of 2024, the capacity scale of each link of the photovoltaic industry chain exceeds 1000GW, there is a phased supply and demand mismatch between the supply side and the terminal installation, and the photovoltaic industry is still at the bottom of the market cycle." TCL Central explained the reasons for the loss in its first quarterly report in 2024.

In the more competitive photovoltaic cells and components, the performance of related manufacturers is more obvious. For example, according to the 2023 global module shipment ranking released by InfoLink, a well-known photovoltaic industry research institution, Jingke Energy Co., Ltd. (688223.SH, hereinafter referred to as "Jingke Energy"), which won the world's largest shipment of photovoltaic modules in 2023, achieved operating income of 118.682 billion yuan in 2023, up 43.55 year on year. However, in the first quarter of 2024, the company achieved revenue of 23.084 billion yuan, down nearly 0.1 billion yuan from the same period last year.

similarly, trina solar energy co., ltd. (688599.SH, hereinafter referred to as "trina solar energy"), which ranked second in global shipments of photovoltaic modules in 2023, saw a year-on-year revenue growth rate of 33.32 in 2023, down from 91.21 in the previous year. In the first quarter of 2024, there was also negative revenue growth, with revenue of 18.256 billion yuan in the current quarter, a decrease of 3.063 billion yuan from the first quarter of 2023.

in addition, like longji green energy, which has already incurred quarterly losses and ranks third in global shipments, jingao solar energy technology co., ltd. (002459.SZ, hereinafter referred to as "jingao technology"), which ranks fourth in photovoltaic module shipments in 2023, also incurred a net loss of 0.483 billion yuan in the first quarter of 2024.

In the 2023 annual report of JA Technology, the company pointed out that as solar photovoltaic power generation achieves "affordable access to the Internet" in an increasingly large range of countries and regions, the photovoltaic market has gradually changed from "policy-driven" to "demand-driven". The photovoltaic industry will be more sensitive to changes in market demand and will show cyclical characteristics with fluctuations in market demand. At the same time, with the global power grid consumption problems on the table, the main market demand growth slowed down, the industry will appear differentiation, accelerate the pace of survival of the fittest.

Cross-border enterprises "retreat from difficulties"

In the context of the overall pressure on the photovoltaic industry, cross-border enterprises have also played a "retreat".

On April 24, Suzhou Zhonglai Photovoltaic New Materials Co., Ltd. (300393.SZ, hereinafter referred to as "Zhonglai shares"), a listed company whose main business is photovoltaic auxiliary materials, issued a notice saying that the market environment of the photovoltaic industry has changed significantly, and the feasibility of silicon-based projects has changed significantly. Based on this, the project is not expected to achieve the intended investment effect. Combined with the company's overall development plan and market conditions, in order to optimize the company's resource allocation, reduce investment risks, and effectively safeguard the interests of the company and all shareholders, the company decided to terminate the investment in silicon-based projects after careful study.

The silicon-based project referred to by Zhonglai shares was first disclosed in the announcement issued on March 15, 2022, when silicon materials were in a stage of continuous price increase. The lucrative profit prospects of this link have allowed Zhonglai shares with a revenue of less than 10 billion in 2022 to directly throw out a polysilicon construction project with a total investment of about 14 billion yuan. The project is planned to have an annual production capacity of 200000 tons of industrial silicon and 100000 tons. Tons of high-purity polysilicon. To this day, the project is clearly "out of place".

In the first quarter of 2024, Zhonglai shares achieved operating income of 1.288 billion billion yuan, a year-on-year decrease of 52.43; the net loss attributable to shareholders of listed companies reached 0.172 billion billion yuan, a year-on-year change from profit to loss.

In fact, since the beginning of this year, there are still many listed companies that "retreat from difficulties" like Zhonglai shares.

On March 18, Jiangxi Haiyuan Composite Material Technology Co., Ltd. (002529.SZ, hereinafter referred to as "Haiyuan Composite Material"), whose main business is composite lightweight products, issued an announcement stating that the company has cooperated with Quanjiao County. After friendly negotiation, the People's Government signed the "Dissolution Agreement" and decided to terminate the cooperation of related projects, and transferred 100 equity of Chuzhou Saiwei Energy Technology Co., Ltd. (hereinafter referred to as "Chuzhou Energy") to Zhejiang Aixu Solar Energy Technology Co., Ltd. (hereinafter referred to as "Aixu Technology") at a price of 38 million yuan. Upon completion of the transfer, Haiyuan Compound will no longer hold an equity interest in Chuzhou Energy.

The Chuzhou project of Haiyuan Composite Materials began in late 2022. On December 22, 2022, the company disclosed its plan to invest in a new photovoltaic industry base in Quanjiao County, Chuzhou City, mainly with Chuzhou Energy, a wholly-owned subsidiary. Among them, the first phase plans to build 10GW TOPCon (tunneling oxide layer passivation contact cell) high-efficiency photovoltaic cell project, and the second phase plans to build 5GW HJT (heterojunction solar cell) ultra-high-efficiency photovoltaic cell and 3GW high-efficiency photovoltaic module project.

"in view of the great changes in the photovoltaic industry and market environment in the process of promoting the Chuzhou project, after careful study, in order to reduce investment risks and management costs and optimize the allocation of resources, the company decided to terminate the Chuzhou project after friendly consultation with the Quanjiao government." Haiyuan compound material in the announcement to explain the reasons for the termination of the project.

linda group co., ltd. (300125.SZ, hereinafter referred to as "linda shares"), which crossed the border to the photovoltaic solar cell circuit in 2020, also announced on March 18 that it plans to terminate the investment in the construction of Tongling's 20GW high-efficiency photovoltaic cell industrial base project.

according to the previous announcement, the original planned investment of the project terminated by linda shares is as high as 9.15 billion yuan, and it is planned to be constructed in two phases, of which the first phase of the project will build an annual output of 10GW TOPCon high-efficiency battery production line; The second phase of the project will be built with an annual output of 5GW TOPCon high-efficiency battery production line and 5GW-hjt battery production line.

in the announcement, the statement of ling da shares is very similar to that of haiyuan compound materials: "in view of the fact that the project construction is affected by various factors such as macro environment, changes in the market environment of photovoltaic industry, financing environment, project construction implementation conditions, and cooperation progress of relevant parties in the project construction, the project cannot advance the construction progress as originally planned. After careful research, the company believes that there is a greater risk of uncertainty in continuing to promote the project. In order to effectively control the risk of foreign investment, the company and the Tongling Shizishan High-tech Zone Management Committee have reached a consensus and decided to terminate the investment and construction of the Tongling project."

a distributor of photovoltaic modules in south China told reporters that more and more enterprises will terminate photovoltaic projects in the future, such as Zhonglai shares, Haiyuan composite materials and Lingda shares. "At present, not only the components, but also the prices of the whole industrial chain are approaching the cost line. Even some projects are bidding at a loss. Companies without strength cannot hold on for too long." The dealer said.

"Now the second and third tier PV companies are starting to terminate their projects, which is normal, with a phased overcapacity and a market environment that does not support companies to continue to expand their production. I think the future is not just about project termination, there may be many companies that are going to be eliminated." Xiamen University China Energy Policy Research Institute Dean Lin Boqiang also told reporters.

but Lin boqiang also stressed to reporters: "in the long run, if the double carbon goal is to be achieved, wind power photovoltaic is the main energy consumption. Therefore, the current production capacity of the photovoltaic industry is insignificant for the future, and now it is just a nodal surplus. I am still very optimistic about photovoltaics, but it is not to say that the industry has no problems now. After all, the new energy industry is a new system. It requires us to face challenges and solve problems in development."

View original 496K