Just as A-share PV companies have disclosed their third quarterly reports, the shipment rankings of Chinese PV module manufacturers in the first three quarters have also been released.

According to statistics released by Sobi Photovoltaic Network on the evening of October 30, in the first three quarters of this year, JinkoSolar, JA Solar, Trina Solar, LONGi Green Energy, Tongwei Solar, Chint New Energy, Canadian Solar, Yiyi New Energy, GCL Integration and Yingli Energy became the top 10 module shippers, with a huge difference of about 53.65GW in shipments.

The top module manufacturers are strong in shipments, but their performance in profitability is not proportional to their shipments. Among the top 10 PV module shippers, six A-share listed companies are covered, namely JinkoSolar (688223. SH), JA Solar (002459. SZ), Trina Solar (688599. SH), LONGi Green Energy (601012. SH), Canadian Solar (688472. SH) and GCL Integration (002506.SZ). The 21st Century Business Herald reporter noticed that in the third quarter, the net profit of the above six listed photovoltaic module manufacturers was differentiated: although some manufacturers continued to make profits, their profits declined month-on-month; Some manufacturers continued to lose money, but the amount of losses narrowed month-on-month; Some manufacturers reversed the decline in losses and achieved profitability in the third quarter; Some manufacturers lost their profits and suddenly suffered large losses in the third quarter.

Image source: Xinhua News Agency

"Profit protection" has become the consensus of profitable module manufacturers

In the first half of this year, the vast majority of listed PV module manufacturers encountered a profit crisis. Among the top 10 PV module manufacturers, only JinkoSolar, Canadian Solar, Trina Solar and GCL Integrated had positive net profits. In the third quarter, domestic PV module prices were still running at a low level, and the profits of some module manufacturers suffered large fluctuations.

According to the statistics of the 21st Century Business Herald reporter, among the above six listed photovoltaic module manufacturers, Canadian Solar, JA Solar, GCL Integration and JinkoSolar continued to make profits in the third quarter, with net profits attributable to shareholders of listed companies of 716 million yuan, 390 million yuan, 36 million yuan and 15 million yuan respectively.

It should be pointed out that although Canadian Solar, JinkoSolar and GCL Integration continued their profitability in the first half of the year, they also faced different changes. Among them, Canadian Solar and GCL-SI's net profit in the third quarter increased positively compared with the second quarter, while JinkoSolar declined quarter-on-quarter.

In the third quarter of this year, Canadian Solar shipped 8.4GW of modules, up 2.4% QoQ, but lower than the company's previously disclosed Q3 shipment forecast. Canadian Solar ranked seventh in the aforementioned module shipment rankings, with a total of 22.9GW shipped in the first three quarters. Since the beginning of this year, the module manufacturer has put forward the principle of "profit first" and abandoned low-cost and loss-making projects to ensure the profitability of the module business. At the same time, Canadian Solar's module margins were maintained thanks to an increase in the proportion of its shipments to high-premium overseas markets, which accounted for more than 30% of the company's shipments in the high-premium markets of North America in the third quarter.

Compared with the same period last year, GCL-SI's net profit in the third quarter increased, and it is also the only company among the six listed photovoltaic module companies with positive growth year-on-year and quarter-on-quarter. Similar to Canadian Solar, although the overall shipments in the first three quarters were far lower than those of JinkoSolar, JA Solar, Trina Solar and LONGi Green Energy, the company also chose to adjust its order-taking strategy, focusing on state-owned projects in the domestic market and receiving orders from markets such as India in overseas markets. According to statistics, in the first three quarters of this year, GCL Integrated shipped more than 14.5GW of modules, and recently won the bid for a 3.42GW centralized procurement order from.

JinkoSolar maintained its position as the "king of module shipments", with 67.65 GW of module shipments in the first three quarters. However, from the perspective of net profit data, the company's net profit attributable to shareholders of listed companies in the third quarter fell by 38.93% compared with the second quarter. However, from the perspective of deducting non-net profit, JinkoSolar's data in the third quarter was 259 million yuan, an increase of 890.37% from the previous quarter. That is, the main reason for the decline in the company's overall net profit in a single quarter is the impairment provision - combined with the financial data of the first half of the year, JinkoSolar carried out credit and asset impairment in the third quarter, so far the company has made a total provision of 861 million yuan in the first three quarters. It is worth mentioning that JinkoSolar has also proposed to balance the scale of shipments and profits, in order to achieve annual shipments of 90GW to 100GW.

JA Solar was the most "surprised" module manufacturer in the third quarter. After two consecutive quarters of losses, the company's net profit attributable to shareholders of listed companies in the third quarter was 390 million yuan, an increase of about 199.61% from the previous quarter. According to the financial report, JA Solar's cell module shipments in the first three quarters were about 57GW (including 1GW for self-use), of which overseas module shipments accounted for about 52.40%. In terms of Q3 performance, JA Solar shipped about 19GW of cell modules in the quarter. In the view of brokerage institutions, the reason for the company's larger-than-expected improvement in profitability in the third quarter is due to cost reduction. "In the second half of 2023, the company's large-scale new TOPCon cell production capacity will be put into operation, resulting in slightly higher production costs in the first half of this year." Guojin Securities believes that JA Solar's battery production capacity ramp-up marketing ended in the third quarter of this year, the cost fell significantly, and the gross profit margin of sales in the third quarter increased by 5.6 percentage points quarter-on-quarter to 8.67%.

LONGi reversed the decline and Tianhe suffered unexpected losses

On October 31, the A-share photovoltaic sector as a whole ushered in a sharp rise, with 15 photovoltaic stocks rising to the limit, including JA Solar Technology and GCL Integration. In addition, JinkoSolar closed up 3.16%, while Canadian Solar rose more than 4% at one point but closed down 0.67% in late trading.

Despite both losing money in the third quarter, the market reaction of LONGi Green Energy and Trina Solar was very different. The 21st Century Business Herald reporter noticed that LONGi Green Energy rose by more than 4% intraday and closed up 2.55%; Although Trina Solar also rose more than 4% intraday, it finally closed down 1.61%. The reasons for the divergence in stock price performance are: although LONGi Green Energy continued to lose money in the third quarter, its loss narrowed compared with the second quarter; Trina Solar, which was profitable in the first two quarters of this year, suffered heavy losses in the third quarter.

Specifically, according to the financial report, LONGi Green Energy's operating income and net profit attributable to shareholders of listed companies in the first three quarters were 58.593 billion yuan and -6.505 billion yuan respectively, of which the net profit attributable to shareholders of listed companies in the third quarter was -1.261 billion yuan, a loss reduction of 56.40% from the previous quarter. In the first three quarters of this year, Trina Solar's revenue exceeded LONGi Green Energy's by 63.147 billion yuan, and the net profit was -847 million yuan, of which the net profit attributable to shareholders of listed companies in the third quarter was -1.373 billion yuan, which was also higher than that of LONGi Green Energy. In addition, according to third-party statistics, Trina Solar and LONGi Green Energy shipped about 55GW and 51.23GW of modules in the first three quarters, ranking third and fourth, respectively.

The market was surprised by Trina Solar's answer in the third quarter. According to the analysis given by Guojin Securities, the price of photovoltaic modules continued to decline in the third quarter, and Trina Solar's profitability was under pressure, and the gross profit margin of sales fell by 3.6 percentage points quarter-on-quarter to 9.48%. At the same time, the company recorded an impairment loss of about 743 million yuan in the third quarter, which dragged down the performance.

Trina Solar's performance in the third quarter fluctuated sharply, reminding the domestic module market, which is currently operating at a low price, that the "safety factor" of performance is not high. For module companies, the current business layout for overseas markets is one of the ways to reduce this risk. For example, Trina Solar's 1GW cell module base in Indonesia and 5GW in the US in 2023 are expected to be put into production in the second half of this year, so as to gain relatively high-value module market share.

Taking the revenue structure of the first half of the year as a reference, except for GCL Integration and LONGi Green Energy, the overseas revenue of the other four listed PV modules accounted for more than 50%, and the highest proportion even exceeded 76%.

In fact, when the price competition in the domestic module market has entered an irrational state, some high-value overseas markets have indeed become "safe havens", which has also triggered the reflection of leading enterprises. Zhong Baoshen, chairman of LONGi Green Energy, pointed out at the performance briefing on the evening of October 30 that one of the reasons for the company's large net profit loss in the first three quarters was that the high-profit market in the United States had little gain. "In the first three quarters of this year, the company shipped 1.6GW in the US market, which is a big gap compared with before."

However, as the leading PV module companies have successively improved their layout in overseas markets, it is expected that by the fourth quarter, some companies will gain something.