Longji Green Energy Zhong Baoshen: Short term problems in the photovoltaic industry are difficult to solve, and some companies will be eliminated from the market

Longji Green Energy believes that the price of photovoltaic modules is no longer a key factor affecting market demand and customer decision-making.

“According to the current market supply situation, without special external factors, the short-term problems of the industry will be difficult to solve, but they will not become worse.” On April 30th, at the 2023 and 2024 performance briefing of Longji Green Energy (601012. SH), the company’s chairman, Zhong Baoshen, said.

Zhong Baoshen believes that “many links in the industrial chain are even in a state of loss, and better companies will have gaps. Companies with poor performance are believed to be eliminated soon.”

Speaking of the main direction of the company’s future efforts, Zhong Baoshen stated at the briefing that the logic of the photovoltaic industry has undergone some changes, that is, the price of photovoltaic modules is no longer a key factor affecting market demand and customer decision-making. The future strategy of the company is to improve the core photovoltaic technology, namely efficiency and reliability. The second is to accurately address pain points based on customer scenarios.

On the evening of April 29th, Longi Green Energy released its financial reports for the first quarter of 2023 and 2024. In 2023, the company achieved a total revenue of 129.498 billion yuan, a year-on-year increase of 0.39%; Realized a net profit attributable to the parent company of 10.751 billion yuan, a year-on-year decrease of 27.41%. However, the net loss in the first quarter of this year was 2.35 billion yuan, which turned from profit to loss year-on-year.

At the performance briefing just held today, the company’s management stated that the main reason for the year-on-year decrease in net profit was the provision of asset impairment of 7.025 billion yuan in 2023, which had a certain impact on net profit. Among them, due to the significant decrease in photovoltaic product prices, the company has provisioned inventory impairment losses of approximately 5.2 billion yuan. In addition, considering the iterative upgrade of some production lines, a fixed asset impairment loss of approximately 1.6 billion yuan has been provisioned.

The management of the company also stated that while the photovoltaic industry is maintaining rapid development, it is also facing the problem of phased oversupply, which has led to a significant decrease in the prices of the photovoltaic industry chain in 2023, and the industry competition is becoming increasingly fierce, posing great challenges to the operation of photovoltaic enterprises.

Looking ahead to 2024, Longi Green Energy stated that from a global demand perspective, driven by energy policy support and the economic viability of photovoltaic power generation, despite adverse factors such as green trade barriers and grid consumption constraints, it is expected that the global photovoltaic installed capacity will continue to grow in 2024, with a year-on-year increase of over 20%.

In terms of production capacity construction, according to the latest information from the performance briefing, the company’s production capacity target for the next three years is to form a silicon wafer production capacity of 200GW, of which Terui’s silicon wafer production capacity accounts for more than 80%, BC battery production capacity will reach 100GW, and single crystal component production capacity will reach 150GW.

In addition, at the performance briefing, Longi Green Energy also announced the iteration schedule of photovoltaic cell technology, which is widely concerned in the industry.

“The company’s HPBC second-generation product will be released in Europe on May 7th, and the efficiency of the components will reach 24.4%.” Zhong Baoshen said that this will be the last time that crystalline silicon batteries achieve an efficiency improvement of more than 1%. The future iteration of photoelectric conversion efficiency will depend on when perovskite stacking technology moves towards mass production. Compared to TOPCon components of the same specification, HPBC second-generation products have a power increase of more than 5%. Combining the advantages of BC technology, the full life cycle power generation of power stations in equal land areas can be increased by 6.5% to 8%. It is expected to achieve mass production in the second half of the year.

“It is expected that the vast majority of photovoltaic cells in the market will be BC technology within 5 years,” Zhong Baoshen said, which will include different technology routes such as heterojunction, TOPCon, PERC, or composite passivation technology. However, composite passivation will be the mainstream in the market, which will be the direction determined by the next generation of the photovoltaic industry.

In addition, Longi Green Energy is expected to strive to achieve a target of around 135GW of silicon wafer shipments and 90GW to 100GW of battery module shipments by 2024.

-