Be ruthless to yourself, really ruthless, long-term ruthless, and be fierce and decisive to things!
Literature | Geng Kangqi, a Chinese businessman's strategy
Someone once asked, "Do you make strategic basis through market research or policy interpretation?"
Li Xiande's answer was overbearing and leaked: I believe in intuition more.
[Return of the King]
In 2023, China's newly installed PV capacity will increase by nearly 1.5 times to 216.88GW, a record high.
This figure is equivalent to the total new installed capacity in China from 2019 to 2022, accounting for more than half of the world for the first time, and realizing the great change of the market "including the big head". Therefore, photovoltaic has surpassed hydropower and become the second largest power source in China.
When the huge waves roll down, Jinke Energy and its founder Li Xiande are the most proud.
According to Solarbe statistics, in 2023, Jinko modules will achieve an annual sales volume of more than 75GW, with a market share of about 14.5% - 15%, breaking the three consecutive years of module shipment champion record of Longji Green Energy, the "best photovoltaic", and ranking first in the world.
The photovoltaic industry chain is mainly divided into five links: silicon material, silicon chip, battery chip, module and power station. As the core of photovoltaic power generation system, the threshold for entering the photovoltaic module market is low, but the competitive barrier is constantly rising.
In particular, China has supplied more than 80% of PV modules to the global market. Every contest between domestic leaders, even every ranking change, may indicate a major reversal of the industry pattern.
In June 2023, Li Xiande directly addressed the new focus of photovoltaic in a document, which will turn from silicon materials "holding silicon as the king", silicon chips "supply as the king", to batteries "technology as the king", to modules "market as the king", and expressed with confidence that:
"It's time to do something big".
Behind this determination, Jinko has just experienced a heartfelt "counterattack war".
As early as 2016, Jinko Energy, which has been established for ten years, once ranked the first in the world in photovoltaic modules as a "dark horse", and won an unprecedented four consecutive years. Li Xiande, who is proud of himself, is full of thoughts about "All in Expedition" and vigorously globalizes.
At the 2020 strategic meeting, Li Xiande set an ambitious "wild" goal that scared hundreds of middle and senior executives: in the next 3-5 years, the global market share of component products will reach 40%.
However, after China put forward the goal of "double carbon" in September 2020, another round of PV capital boom immediately started. In 2021 alone, there will be 14 photovoltaic enterprises competing for listing in A-share market. The old rivals of Jingke, such as Trina Solar and Jing'ao Technology, have long been delisted from the US stock market and returned to the A-share market, so as to enjoy dividends. The market value has soared. Longji Green Energy has become the world's top photovoltaic company with a market value of more than 360 billion.
Taking advantage of this Dongfeng, Longji and other companies made strong acquisitions to expand production capacity and explore overseas markets. After 2020, they became the "new overlord" of global components for three consecutive years, while Jingke, stuck in the mire of US stocks and limited financing, fell to the fourth place all the way.
The humiliated Jinko executive cried to Li Xiande: "Boss, what's the difference between us? Are our products inferior to others, our technology inferior to others, our sales inferior to others, our brand inferior to others, our globalization ability inferior to others, and our people inferior to others?"
Li Xiande learned from his mistakes and answered: Make up the difference now.
On January 26, 2022, "slow half beat" Jinko Energy finally landed on the A-share scientific innovation board, and its market value on that day exceeded 100 billion yuan. Get on the "last bus" of capital to open financing channels and reduce financial costs, and also lay the groundwork for re climbing the peak in the future.
However, the more critical step to win the battle was Li Xiande's technical gamble.
The technical iteration of photovoltaic market highlights the word "fast". After 2016, from BSF (aluminum back field) batteries, which accounted for nearly 90% of the market, to the rapid replacement of P-type batteries, to the current upgrade of N-type batteries, the technology is shuffled every two or three years.
When betting on N-type batteries, the giants had differences: Tongwei and others chose HJT batteries with the highest investment cost, while Longji bet on BC batteries with high production difficulty and technical requirements. More enterprises that are undecided will lay out multiple routes to seek stability.
However, Jinko is clearly optimistic about the TOPCon line of "high efficiency ceiling, low-cost industrialization, and better equipment", and focuses on one thing: Focus on the research and development of TOPCon battery, and gradually transfer the whole industry chain.
In November 2021, Jinko will launch Tiger Neo series components using TOPCon technology, marking the beginning of commercialization.
By 2023, "TOPCon first" will become the trend of the times. Jingke, which has a forward-looking layout and big bets, will have about 45GW of sales in TOPCon's flagship price range, or about 40% of the market share. It will also become a well deserved leader in N-type modules and regain the global PV module crown.
After years of hardships, Li Xiande finally returned with the "king" of Jinko: last November, Jinko Energy became the "largest private enterprise in Jiangxi" with a revenue of 111.065 billion yuan, and Li Xiande became the richest man in new Jiangxi with a price of 35.3 billion yuan.
At the beginning of 2024, Li Xiande continued to be full of confidence in the pessimistic expectations of a group of photovoltaic players about overcapacity, over pricing, and a large-scale reshuffle. He said that Jinko would continue to "ride the horse and climb".
[PV Marshal]
In 2001, Shi Zhengrong, the founder of Wuxi Suntech, returned to China to start his own business, which opened the story of China PV's wealth creation. Li Xianshou, the eldest brother of Li Xiande, immediately became the first "gold miners", creating solar energy for production and sales of solar cell modules.
Four years later, Wuxi Suntech landed at the New York Stock Exchange, with infinite scenery. Li Xianshou followed the trend to enter the upstream of the industrial chain and created Yuhui Sunshine.
Relying on the pioneering work of using silicon waste instead of polysilicon to manufacture silicon chips, Yuhui Sunshine quickly occupied the market with low cost and high capacity, and became the second Chinese solar energy company to be listed overseas, which was highly favored by capital.
Li Xianshou, who ate meat, did not forget to take his brothers to "drink soup". At his instigation, Li Xianhua, the second brother, and Li Xiande, the third brother, sold their assets, bid farewell to the construction, installation and vehicle maintenance of the old bank, and established Desheng Solar Energy and Jinke Energy successively.
At the beginning, the two brothers "had a very simple idea, that is, to make supporting facilities for Yuhui Sunshine".
At that time, orders from the European Union soared, and Yuhui Sunshine "even if the workshop was in three shifts, the orders were placed two years later".
"The market is too big. You can share it separately. Maybe 1+1 is greater than 2".
The eldest brother said, Li Xiande decided to take his second brother to start a new career, specializing in polysilicon production.
The soaring price of polysilicon and the global customers who are good at money make Jinko immediately catch up with the industry. There are no less than 50 large trucks queuing in the factory every day, and the lights are still bright at 3:00 am and 4:00 am.
In 2006, the sales revenue of Jinko exceeded 100 million yuan, reaching 780 million yuan in 2007; In 2008, this figure rose to 3 billion.
Behind the rapid expansion, the brothers stole a trick from the eldest brother to "borrow the chicken to make eggs": In 2007, with the help of the tight market of polysilicon, Jinko found downstream customers to get nearly 200 million yuan in advance, and then immediately invested to expand its production capacity.
After tasting the sweetness, Jinko Energy further sought financing everywhere. In May 2008, we received 35 million US dollars from a Singapore private equity fund; In August, it won more than 20 million US dollars from 8 funds including Shenzhen Venture Capital.
The whole market is completely crazy under the stimulation of the wind outlet of getting rich. More than 1000 polysilicon enterprises have sprung up in the market, and even listed companies engaged in real estate and cement have also entered the market. Li Xiande's eldest brother has set up five production lines at one go.
But Li Xiande calmed down at this time. When he saw the data reported by the Development Planning Department that the demand for polysilicon only increased by 30% in 2009, but the supply surged by 120%, he immediately sensed the big risk of massive overcapacity, and then resolutely stepped on the brake to stop following the trend of expansion, so that a large amount of funds raised were deposited in the bank.
The final market adjustment is more cruel than Li Xiande predicted.
The US subprime crisis in September 2007 soon spread to Europe, and the photovoltaic industry was also hit hard. In 2008, the price of polysilicon fell back to its original shape all the way, and 95% of industry enterprises closed down. Wuxi Suntech failed to recover, and Brother Li Xiande also suffered heavy losses.
Li Xiande, "lying flat", became the biggest winner: Not only avoid huge losses, but also hold huge financing.
When the industry was full of misery and fear, Li Xiande, who had preserved his strength, began to be optimistic: "Clean solar power is the general trend of the industry, which will only rise, not fall." And against the trend, "greed":
It extends to the upstream and downstream of photovoltaic, and marches into solar panels, modules, etc.
Taking advantage of the fact that the asset price was in a "depression" after the financial crisis, Li Xiande purchased the first photovoltaic enterprise in Haining, Zhejiang Province - Solar Valley Energy with nearly 300 million yuan in June 2009 in just one week, making Jingke turn to embark on the road of rapid expansion.
As expected, after the storm, the sun shone in quickly: after the crisis, more European countries joined the "Million Roof Plan", and the photovoltaic industry was also one of the investment priorities in China's 4 trillion yuan stimulus policy.
Li Xiande, who expanded ahead of schedule, once again rose to the top and landed on the New York Stock Exchange with Jinko Energy in May 2010, becoming the first Chinese photovoltaic enterprise listed in the United States after the financial storm, raising 70 million dollars.
Li Xiande, who further strengthened his strength, began to be like a "hungry wolf" breaking into the global photovoltaic industry circle, with more ambition and deeper planning.
He heavily attacked the European and American markets, and recruited a Spaniard with high salary to be the overseas marketing strategy officer of Jinko. He set up sales companies in Germany, France, the United States and other countries, established several overseas logistics warehouses in Europe, strengthened the business network, and also sponsored football clubs to improve the company's reputation and help market expansion.
With a number of sales and channel layouts, Jinko Energy quickly became a major player in global PV modules. After taking the global module throne in 2016, the number of its global customers surged from 1037 in three years to more than 3700 in 2019.
What is more unique is that Li Xiande not only continues to expand the global market, but also takes the lead in the global capacity layout. He not only truly looks at the market with a global perspective, but also continues to follow the industrial changes to upgrade technology and update the track while expanding the scale.
In 2013, he took the lead in proposing "Go to Latin America, the Middle East and Africa as soon as possible, which is the most neglected market at present and the most popular market in the future", and began to layout; In 2015, Jinko began its large-scale layout of overseas photovoltaic manufacturing, and embarked on the path of global photovoltaic investment; In 2018, Jinko resolutely switched its single polycrystalline production capacity, allowing the company's assets to grow rapidly.
More importantly, in terms of globalization strategy, Jinko has taken the path of paying equal attention to both domestic and overseas markets.
In 2022, the Chinese market will become an important position with the highest proportion among the global component shipping destinations of Jinko Energy. In 2023, China's PV module enterprises won the bid, and Jinko was strongly ranked second.
In addition, in order to better match the new business characteristics such as distributed photovoltaic in the Chinese market, Jinko has also created a "new scene business department" internally. And in 2023, it achieved the first achievement in the industry of shipping to the third party.
These also lay a good foundation for Jinko to seize opportunities and avoid risks.
[Brightness and Crisis]
From 2016 to 2019, Jinko Energy won the title of the world's largest photovoltaic module manufacturer for a long time. While its performance was rising rapidly, Li Xianshou, Li Xiande's eldest brother, was more bitter.
After the "double anti" in Europe and the United States, the focus of the photovoltaic market has quietly shifted to emerging markets such as South America, India and Africa. Jinko Energy continues to enjoy a strong momentum because of its early layout, while Yuhui Sunshine, which relies too much on the European market, is heading for decline.
At the end of 2016, Yuhui Sunshine was warned of delisting by the New York Stock Exchange because its share price was continuously lower than $1. Three years later, Yuhui Sunshine was listed by the court as a dishonest person to be executed, and Li Xianshou was restricted from spending.
In the photovoltaic industry, brilliance and crisis continue to occur.
This made Li Xiande remember his elder brother's sigh: only a low profile can survive. He has been engaged in photovoltaic industry for nearly 20 years. He rarely gives interviews. "Jinko has only professional professional managers, but no boss" is a phrase he often says.
Li Xiande's first impression on the outside world was that he was a gentle, elegant, white faced scholar, but he was called a "tough guy" by his peers.
Someone once asked, "Do you make strategic basis through market research or policy interpretation?"
Li Xiande replied: I believe in intuition more.
An example of his boldness is that in 2006, a "layman" dared to set up Jinke Energy in Shangrao, Jiangxi Province, a strange place. Even if the first phase project has not reached the standard and reached the production capacity, we will add the new second phase project with great efforts.
As a result, Jinko is good at "dominating" with major projects in major battlefields around the world. For example, the largest off grid photovoltaic power station in Africa, the largest photovoltaic project under construction in Australia, the largest photovoltaic power station in the Americas, and the largest deep mountain photovoltaic project in South Korea
▲ Al Dhafra photovoltaic power station project is the largest single solar power generation project in the world so far
Li Xiande often warns employees that in the face of change, stimulation, filling, expansion, and refilling of the photovoltaic industry, "don't be afraid of competition and fighting. We have the strength to compete with any powerful enemy", and requires colleagues to:
"Always optimistic, extremely loving, full of ruthlessness".
Li Xiande regards himself as a "pawn who has crossed the river". He can only walk forward, not backward, and "not unique, or rather die". In the turbulent performance of the company in 2020, he was full of generosity, "We can't scratch the glass once and never touch the cup again."
He often said, "PV is definitely the best business and investment in this century." and "For PV, don't overestimate the turbulence of 1-2 years and underestimate the changes after 10 years."
He believes that to ensure the direction and stability of the enterprise strategy, the indispensable thing is to ensure speed and strong execution. "100% implementation, 120% implementation, 150% action, 200% delivery, now, immediately, immediately."
Therefore, Li Xiande likes employees who are "silly" and "ruthless". In his speech in 2023, he emphasized one word:
"In particular, the management should be ruthless to themselves, really ruthless, long-term ruthless, fierce and decisive to things".
It is this radical ruthlessness that makes Jinko create miracles in the industry.
For example, in the field of photovoltaic modules, there has always been a "boss curse": in the past 10 years, from Suntech, Yingli to Trina Solar, Longji, etc., it has been difficult to stay at the top of the list for three years. Jinko Energy is not only the only "alien" that has been the king for four years, but also the only "return of the king".
But on the other side of the miracle, ruthlessness is also becoming a "double-edged sword" hanging on top of Jinko.
In less than two years, Li Xiande raised more than 30 billion yuan through several fixed increase and convertible bond financing projects, and announced the largest single investment plan of 56 billion yuan in photovoltaic history in May 2023 to build the world's largest N-type photovoltaic integrated base.
Investors voted with their feet for this "blood pumping" fundraising expansion: although Jinko's performance was hot, its market value fell from the highest point of about 180 billion yuan to only 80 billion yuan.
And Jinko, which has a debt ratio of 70% - 80% all the year round and ranks among the top financial risks in the industry, has forced Li Xiande to admit that "debt ratio has become the most important battle of Jinko's energy finance".
On the other side of finance, business challenges cannot be ignored. Both Trina Solar, the ambitious and soaring second tier, and Longji Green Energy, the former overlord, are strong rivals.
Li Xiande once said, "Why do we still miss Steve Jobs? I believe what matters is his' Think Different '—— Crazy, different, derailed, and let the world move forward. "
It is widely expected in the industry that there will be even more fierce war in photovoltaic industry. 2024 will be a crucial year for whether Jinko, which regains the throne, can take a firm position.
Reference
[1] "The Three Brothers' Solar Kingdom" created wealth [2] "Three times out of nowhere, more than 20 billion after 11 years, he changed the whole industry" Master's circle [3] "Full of the atmosphere of hard battle" Jingke Energy
Welcome to pay attention to [Chinese Business Strategy], to know the people of the moment, and to read the legend of strategy.
All rights reserved. Private reprinting is prohibited
Some pictures come from the network
If infringement is involved, please contact to delete
