interface news reporter yin jingfei

With the 2023 annual report and the first quarter of 2024 close, most of the PV track players have suffered a performance Waterloo.

according to the interface news statistics, 63 photovoltaic listed companies in 2023 total net profit of about 97.777 billion yuan, down 14.38 from the same period last year, the previous year to 114.205 billion yuan; In the first quarter of 2024, the total net profit attributable to the mother was about 4.461 billion yuan, down 87% from the same period last year, and about 35.599 billion yuan in the same period last year.

with a net profit of nearly 13.6 billion yuan in hand, Tongwei shares (600438.SH) became the well-deserved profit king of photovoltaic circuit in 2023. however, in the first quarter of this year, the company's performance was rapidly cold, losing nearly 0.8 billion yuan. Perennial sitting on the throne of photovoltaic one brother Longji Green Energy (601012.SH) 2023 net profit level decreased by more than 27% YoY, the first quarter of this year a huge loss of 2.35 billion yuan. Component giant Tianhe Solar (688599.SH) only reported good results in 2023, with a sharp turnaround in the first quarter of 2024, with net profit falling by more than 70%. TCL Central (002129.SZ), one of the four giants of silicon chips, turned from profit to loss in the first quarter of 2024 after a big drop in performance in 2023, with the main business losing more than 1 billion yuan.

In addition to the industry chain competition to accelerate the sharp drop in the price of photovoltaic products, 2023 and the first quarter of 2024 swallowed up the net profit of photovoltaic enterprises is a major culprit of asset impairment losses, and in previous years, photovoltaic enterprises have a large amount of asset impairment behavior is not common.

Asset impairment losses of photovoltaic players soared in 2023.

according to the interface news statistics, 63 photovoltaic listed companies accrued asset impairment losses in 2023 totaled 32.844 billion yuan, up 158 percent from 2022. The total figure for this provision is only $12.728 billion in 2022 and $6.805 billion in 2021.

in the first quarter of 2024, more than 60 photovoltaic enterprises accrued asset impairment losses of 5.667 billion yuan, while in the first quarter of 2023 and the first quarter of 2022, the figures were only 0.398 billion yuan and 0.429 billion yuan respectively.

13 photovoltaic enterprises have accrued asset impairment losses exceeding 0.3 billion yuan in 2023. Among them, Longji Green Energy, Tongwei shares, Trina Solar Energy, TCL Central 2023 accounting for asset impairment losses ranked among the top three in the industry, as high as 7.025 billion yuan, 6.236 billion yuan, 3.257 billion yuan. Jingao Technology (002459.SZ) also recorded asset impairment losses of more than 3 billion yuan.

13 photovoltaic listed companies with significant asset impairment before 2023, data source: choice

in the first quarter of 2024, there were 11 photovoltaic listed companies with asset impairment losses exceeding 0.1 billion yuan. among them, longji green energy made a substantial provision of 2.814 billion yuan, aixu shares (600732.SH) and TCL central made a provision of 0.55 billion yuan and 0.502 billion yuan respectively.

11 PV listed companies with significant asset impairment in the first quarter of 2023, data source: choice

Take Longi Green Energy as an example, its asset impairment losses have significantly swallowed up the company's net profit in 2023 and the first quarter of 2024. In 2023, the PV giant recorded an impairment loss of $7.025 billion, compared with a net profit of $10.751 billion for the same period. In the first quarter of 2024, the impairment loss of assets was again as high as 2.814 billion yuan, and the net profit of the same period was 2.3 billion yuan.

What is the reason behind this? The decline in the value of module inventory has become the first reason for many PV module giants to charge large amounts of asset impairment.

take Longji green energy as an example, for the impairment of assets exceeding 7 billion yuan in 2023, the loss of inventory depreciation and contract performance cost is as high as 5.171 billion yuan, and the impairment loss of fixed assets is 1.586 billion yuan.

Longji Green Energy's Asset Impairment in 2023, Figure Source: 2023 Company Annual Report

as to why the inventory impairment of nearly 5.2 billion yuan should be accrued, the management of the company explained at the performance presentation meeting of longji green energy on April 30, including the impact of the monthly accrual method and the change of impairment accounting policy. U.S. Customs seized the company's import and export components, the company's shipments are higher than peers and for a long time, during which the price of components continues to decline, inventory impairment to be checked monthly against the new sales price until the return of these components, resulting in the company's inventory impairment in 2023 greater than peers. The company's management also said that in the first quarter of 2024, the company's export of U.S. components was normal. As of the end of the first quarter, the company had no component products stranded in U.S. ports. The U.S. joint venture plant has 5GW capacity and has begun to deliver products in the first quarter of 2024.

another example is component giant Tianhe solar energy, which recorded an asset impairment loss of up to 3.257 billion yuan in 2023 and a net profit of only 5.531 billion yuan for the same period. Of the asset impairment of nearly 3.3 billion yuan, the inventory impairment was as high as 1.649 billion yuan, compared with only 0.493 billion yuan in the same period last year.

asset impairment of Tianhe solar energy in 2023, figure source: 2023 annual report

For more photovoltaic companies, the large loss of PERC capacity is also a major reason. At present, the reshuffle of China's photovoltaic industry is accelerating, and the upgrading and iteration of P-type to N-type technology has become an irreversible trend. PERC capacity, once the main force of shipment, is depreciating at an unimaginable speed.

take Tongwei shares as an example. in 2023, Tongwei shares recorded an asset impairment of up to 6.236 billion yuan. Interface News found that the inventory impairment charge was 1.305 billion yuan and the fixed asset impairment loss was 4.391 billion yuan. Tongwei explained that the impairment of related assets primarily involving PERC batteries was based on the principle of prudence.

The world's fourth-largest battery chip manufacturer, Junda (002865.SZ), has cleared all PERC capacity. The company disclosed that in 2023, the photovoltaic industry is upgrading from P-type to N-type technology, and the market share of N-type batteries continues to increase. Especially into the fourth quarter of 2023, the industry's N-type battery advantage significantly increased, P-type battery profitability significantly downward. The Company conducted a prudent assessment and testing of the recoverable amount of fixed assets related to the P-type PERC battery at the balance sheet date. The 2023 made an impairment provision of 0.894 billion yuan for PERC battery-related assets (about 9.5GW) and turned to n-type production capacity in an all-round way. n-type production capacity was about 40GW and 20.58GW of n-type battery shipments ranked first in the industry. The company's production capacity and asset structure have been further optimized, which is conducive to future performance growth.

for PERC capacity, jingke energy (688223.SH) accrued asset disposal and impairment loss of 1.3 billion yuan in 2023.

according to the statistics InfoLink by the authoritative consulting organization, by the end of December 2023, the PERC battery capacity that has been clearly announced to close or stop production has reached 50.6GW, accounting for about 10% of the total capacity. This means that the existing PERC capacity in the industry is still as high as 450GW. If they all shut down, it means that 40 billion -50 billion yuan of assets will go up in smoke.

qi haishen, executive vice president of jinchen co., ltd., told interface news: "whether PER production line needs to continuously accrue impairment of fixed assets depends on whether it can be upgraded to Topcon production line. generally speaking, PERC production line invested four or five years ago is difficult to upgrade to Topcon production line."