Topic: A-share has entered the right rising stage, and foreign investors are optimistic about the allocation value of A-share
Our reporter Li Yanan
Affected by market supply and demand, the performance of some PV industry chain enterprises in 2023 and the first quarter of 2024 is not satisfactory. Hongyuan Lvneng The financial report shows that the company will achieve an operating income of about 11.859 billion yuan in 2023, a year-on-year decrease of 45.87%; The net profit attributable to shareholders of the listed company was 741 million yuan, down 75.58% year on year. In the first quarter of 2024, the operating revenue of Hongyuan Lvneng decreased by 37.64% year on year, and the net profit loss attributable to shareholders of the listed company was about 141 million yuan.
Hongyuan Lvneng said that affected by the supply and demand of the photovoltaic industry chain, the market price of photovoltaic products declined year on year, leading to a decrease in the company's operating income and the profitability of photovoltaic products.
In the afternoon of May 23, at the 2023 and the first quarter of 2024 performance briefing held by Hongyuan Lvneng, Yang Jianliang, chairman of Hongyuan Lvneng, told the Securities Daily that "at present, the market competition in the photovoltaic industry chain is relatively full, product prices continue to decline, and the whole industry is under pressure, and some old capacity will be gradually cleared. In this case, the company gives full play to the advantages of the whole industrial chain and continues to reduce costs and increase efficiency. At present, the company has sufficient orders, good business conditions, and healthy financial performance. I believe that it will be able to reflect its core competitiveness in this environment. "
Insist on cost reduction and efficiency increase
According to Yang Jianliang, Hongyuan Green Energy's current business covers industrial silicon and high-purity crystalline silicon, monocrystalline silicon chips, high-efficiency batteries, components and high-end equipment. At present, the company has an annual capacity of 60000 tons of silicon material, 35GW silicon chips, 16GW batteries and 8GW components.
From the perspective of operating revenue composition, Hongyuan Lvneng's operating revenue mainly comes from silicon wafer and silicon rod products. In 2023, the company's silicon chip and silicon rod products will achieve an operating revenue of 10.734 billion yuan, accounting for 90.51% of the total operating revenue.
Since the fourth quarter of 2023, the profitability of all links of the photovoltaic industry chain has been under pressure. In the first quarter of 2024, the price of the industrial chain continues to decline, and the price of silicon materials and silicon chips, the main source of income of Hongyuan Green Energy, fluctuates greatly. According to the data of Silicon Industry Branch of China Nonferrous Metals Industry Association, the price of silicon material has exceeded the cash cost of all enterprises in production by the middle of May 2024.
According to the latest data released by the Silicon Industry Branch on May 22, after once falling below the cash cost, the price of polysilicon stopped falling and stabilized this week. Among them, the average transaction price of N-type rod silicon was 43000 yuan/ton, which was the same month on month; The average transaction price of P-type dense material was 37300 yuan/ton, which was flat on a month on month basis; The average transaction price of N-type granular silicon was 37500 yuan/ton, which was the same month on month. Judging from the latest price of silicon chips on May 23, the overall price of silicon chips is weak and stable.
Yang Jianliang said to the reporter: "At present, the company has a complete photovoltaic industry chain capacity, has a good risk resistance, and is not affected by price fluctuations in a single link. The company insists on reducing costs and improving efficiency, reducing product costs from management and production, and improving product efficiency from research and development, so as to ensure its core competitive advantage."
"Although in the short term, it may still be affected by the supply and demand relationship, leading to a decline in profits, in the long term, the photovoltaic industry has broad prospects, and the price of the industry chain will not fall in the long term." Yang Jianliang said.
Prudently promote production expansion projects
In the context of the continuous decline in the price of the industrial chain, Hongyuan Lvneng announced another production expansion plan at the end of April to invest in the construction of a photovoltaic cell project with an annual output of 16GW in Baotou. The total investment of the project is expected to be 5.5 billion yuan, which will be implemented in two phases. The first phase of the 10GW photovoltaic cell project is expected to be put into production in 2025.
The above production expansion plan is considered by the market as "counter trend" overweight. He Li, the manager of Zhiyu Zhishan Investment Fund, said in an interview with the Securities Daily that in the current cycle of the photovoltaic industry, some leading enterprises have once again adopted the counter cyclical expansion strategy. In view of the fact that the whole industry is currently in a state of cash loss, and the leading enterprises in all links are relatively rich in funds, the effectiveness of this round of counter cyclical investment still needs further verification by the market.
At this performance presentation, Hongyuan Lvneng also responded to the reasons for "counter trend" expansion, and stressed that it would "cautiously promote".
Yang Hao, the general manager of Hongyuan Lvneng, told the Securities Daily: "Under the current market background, the company generally maintains the principle of prudent production expansion. However, the company now has a complete silicon rod production line and supporting slicing capacity in Baotou, which can provide raw materials for battery projects, shorten the procurement cycle, reduce transportation costs, form industrial synergies, and improve the competitiveness and risk resistance of the company in the battery production end. "
Yang Hao said that for the above battery projects, the company will fully consider the capital, market, orders and other aspects, reasonably arrange the construction progress and fund payment, and prudently promote the project on the premise of ensuring capital security and controllable cost.
It is reported that Hongyuan green energy battery chip products cover a variety of mainstream specifications. The latest price of Longzhong Information's battery chips on May 23 showed that the market price of battery chips was temporarily stable, and the mainstream market price of 182mm and 210mm sizes was 0.36/W.
Fang Wen, an analyst of Longzhong Information's photovoltaic industry chain, said in an interview with the Securities Daily: "Due to their potential efficiency and cost advantages, 182mm and 210mm large-scale high-efficiency batteries may continue to be the mainstream development trend of the photovoltaic industry."
"Although the photovoltaic industry is still in a downward cycle, the market's expectation of capacity clearing and price bottoming is increasing, and the loss state of the photovoltaic industry chain is considered unsustainable," Fang Wenzheng said.
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