It can be regarded as the last train to catch the expansion of photovoltaic production.
Author | wooden fish
Edit | Xiaobai
When Fengyunjun is not busy, he will look through the listed companies he has analyzed before, one is to summarize and reflect, and the other is to pay attention to their latest developments.
Fengyunjun found that in most cases, the performance in the dimensions of business and operation over the past many years, as well as the management's choices in the temptations of reducing holdings, cross-borders, and speculation, basically determine the future trend of a company.
For example, the company Junda Co., Ltd., Fengyunjun has written two articles, and now its recent fundamentals have undergone major changes, which is worth updating.
1. The return of the leading cell manufacturer
01. Take the last train of photovoltaic expansion
As mentioned in these two previous articles, Junda Co., Ltd. crossed over to photovoltaic after acquiring Jietai Technology in 2021 and divesting the automotive trim business in 2022 and became a new energy listed company mainly engaged in solar cells.
After the transformation, Junda Co., Ltd. has signed investment cooperation agreements with the Management Committee of Anhui Lai'an Xianhe Economic Development Zone and the Lianshui County Government of Huai'an City to build 18GW of solar cell production capacity in Chuzhou base and 26GW in Huai'an base.
In addition, the 9.5GW solar cell production capacity of the previous Shangrao base has also been put into operation, and the current production capacity of Junda has increased from 8.2GW at the time of acquisition to 40.5GW. Among them, 13GW of the second phase of the Huai'an base is still under construction, and the others have been put into operation.
Jietai Technology, which fell out of the top five list of photovoltaic cell manufacturers in 2020, finally appeared in this list again with the rapid expansion of production in the past two years, ranking fifth in 2022.
(Source: PV infolink; tabulatory: Market Cap APP)
Since the second half of the year, the exchange has tightened IPO financing and refinancing of listed companies, Tongwei Co., Ltd. and King Kong Photovoltaic have successively terminated the private placement plan, and the IPO of photovoltaic industry chain companies such as HD Solar, Jucheng Technology, and Topband New Energy has been terminated, and the photovoltaic industry is considered to have ended the "honeymoon period" of the capital market since 2018 and ushered in a cold winter.
Without the support of the capital market, the photovoltaic industry, known for its "heavy assets", may end the frantic expansion in recent years.
For the entire industry, especially for the leading manufacturers that have achieved economies of scale, it is better to have more potential competitors, and it is easier to hold on to the current situation and put more experience on technology.
And this wave of expansion of Jietai Technology can be regarded as catching up with the last train of the industry.
02. The performance reversed
At present, Junda Co., Ltd. is a supplier of leading photovoltaic module companies such as JA Solar, Aster, JinkoSolar, and Chint New Energy, and its performance has also achieved rapid growth with the continuous release of solar antenna sheet production capacity.
2022 is the first year for Junda to truly transform into photovoltaics, achieving an operating income of 11.595 billion yuan. In 2023, the revenue will continue to grow rapidly, reaching 14.380 billion yuan in the first three quarters, exceeding the scale of the whole year of 2022 and more than 10 times that of the whole year of 2021.
(Chart: Market Cap APP)
The profit also changed from the previous loss, achieving a net profit of 717 million yuan in 2022, and continuing to grow to 1.638 billion yuan in the first three quarters of 2023, more than double that of last year.
(Chart: Market Cap APP)
2. The efficiency exceeded 26%, leading the N-type battery technology?
The key to maintaining sustainable competitiveness among leading PV manufacturers is no longer financial strength, but technical routes, including improving the photovoltaic conversion efficiency of solar cells, reducing the breakage rate of solar cells, and improving the production efficiency of solar cells.
All of this depends on the manufacturer's long-term experience and technical level, which is mainly determined by the cell technology route.
At present, photovoltaic cells are mainly composed of P-type polycrystalline, P-type monocrystalline (PERC) and N-type monocrystalline, P-type polycrystalline has basically withdrawn from the historical stage, and P-type monocrystalline is the mainstream technology in the current market, accounting for 91.2% of the market in 2021.
In 2021, the efficiency of PERC monocrystalline cells exceeded the 23% mark to 23.1%, an increase of 0.3% compared to 2020, and it is expected to reach the efficiency limit after 24%.
(Source: Company announcement)
N-type monocrystalline cells that can break through the bottleneck of cell conversion efficiency include technologies such as TOPCon, HJT, and IBC. In particular, TOPCon is considered by the market to be the mainstream of second-generation battery technology, and the current cell efficiency has exceeded 24%, and it is expected to rise to more than 25% in the future.
Leading manufacturers represented by JinkoSolar and Junda have achieved large-scale mass production of N-type TOPCon cells, marking the first large-scale application of TOPCon technology.
With the investment in R&D and the popularization of mass production of N-type cells, the production cost, yield and conversion efficiency have improved rapidly, and the compatibility with PERC production lines is high, and N-type cells have the conditions to enter the market, and photovoltaic cells have begun to upgrade and iterate from P-type to N-type.
According to the China Photovoltaic Association, in 2021, the market share of N-type cells was only 3%, and in 2022 it will rise to 9.8%, and it is expected to surpass P-type cells in the future and become the mainstream technology in the market.
In the first three quarters of this year, 19.55 GW of cells were shipped, including 7.34 GW of P-type and 12.21 GW of N-type.
According to InfoLink statistics, in the first half of 2023, the cumulative shipments of the top five manufacturers will be about 10.5GW. Junda shipped 6.56GW of N-type TOPCon cells, accounting for more than 60% of the market.
In the first half of 2023, Junda Co., Ltd. will increase the mass production efficiency of TOPCon cells from about 25% to more than 25.5% by the end of the third quarter through the improvement of LPCVD dual-insertion technology and the mass production introduction of SE technology on the existing TOPCon technology.
In the past November, Junda Co., Ltd. released a new generation of TOPCon battery "MoNo" series products, and the battery conversion efficiency has risen to more than 26%.
(Chart: Market Cap APP)
In 2022, the gross profit margin of Junda's cell business will be 11.4%, which is significantly lower than that of Aiko and Runyang (IPO).
After the scale of the first three quarters of 2023, the gross profit margin of cells has kept up with the mainstream level, but the technical advantages of its TOPCon cells have not yet been reflected in profitability.
Third, the commonality of the industry is that the cash flow pressure is high
Junda shares, which rely on the photovoltaic business to achieve a fundamental turnaround, can not sit back and relax, and the most prominent problem is cash flow, which is also the common feature of the entire photovoltaic industry.
The cash pressure of Junda shares comes from two aspects: one is the cash spent on the acquisition of Jietai Technology cross-border photovoltaic in the early stage, and the other is the large amount of capital demand generated by the current expansion of production capacity.
During 2021 and 2022, in order to acquire 100% of the equity of Jietai Technology, Junda spent a total of 2.953 billion yuan in cash before and after. Prior to this, in 2020, the total assets of Junda shares were only 1.9 billion yuan, which is enough to see what a lot of money it is.
(Source: Company announcement)
The good thing is that before the refinancing was tightened, Junda raised 2.776 billion yuan in June this year, which was used to pay for the acquisition of 49% of the equity of Jietai Technology, replenish liquidity and repay bank loans.
As of the end of June 2023, Junda had nearly 4 billion yuan in cash (including wealth management), corresponding to interest-bearing liabilities of 3.83 billion yuan, including 652 million yuan of short-term borrowings, 2.398 billion yuan of long-term loans, and 780 million yuan of long-term loans due within one year.
This financing solves the urgent need, but Junda shares still face a large capital expenditure demand.
First of all, the company's cash flow from operating activities is currently unable to fully meet its huge demand for capacity construction funds, with a free cash flow outflow of 2.113 billion in the first three quarters of 2023.
(Chart: Market Cap APP)
Secondly, as of the end of the third quarter of 2023, Junda has a production capacity of 26GW in Huai'an, and 13GW in the second phase is still under construction.
Finally, in the investment cooperation agreement between the Management Committee of Anhui Lai'an Xianhe Economic Development Zone and the People's Government of Lianshui County, Junda shares have such an agreement: after the completion of the project, Junda shares can be leased in the first 6 years, and the installment repurchase will be completed in the 7th to 10th years.
(Note: Party B is Junda shares.) Source: company announcement)
Therefore, as of the end of September 2023, there is still a long-term payable of 4.328 billion yuan lying on the liabilities of Junda shares, according to the disclosure of the semi-annual report, mainly for the government construction payables, sale-leaseback payables, investment payables, etc., which are all fixed expenses in the future.
Fourth, both sides of the transaction have earned
The transformation from automotive trim parts to photovoltaic is also reflected in the share price of Junda shares, which has continued to rise since September 2021, once rising more than 10 times.
(Source: Market Value APP, Zhou K)
At the beginning, in order to raise funds for the merger and acquisition of listed companies, the controlling shareholder Yang's Investment transferred 15% and 19.14% of the shares to Jiaxing Qihang, Shangrao Industrial Investment and Shangrao Zhanhong, a person acting in concert, respectively.
The actual controller of Jiaxing Qihang is Su Xianze, and in November 2021, he transferred the equity of Junda shares in his hand to Su Xianze to be directly held.
Su Xianze is the son of Su Zeng, the founder of Supor, and Supor Group Co., Ltd. was one of the shareholders of Jietai Technology.
(Jietai Technology's shareholding structure in June 2020.) Source: company announcement)
Su Xianze and Shangrao Industrial Investment reduced their holdings as follows: During the 2022-2023 period, Su Xianze and Shangrao Industrial Investment reduced their holdings by 791 million yuan and 557 million yuan respectively.
(Source: Company announcement)
Lu Xiaohong, one of the actual controllers who took over the original automobile business of Junda shares and provided cross-border financing for Junda shares, also reduced his holdings by more than 100 million yuan in July 2023.
Obviously, Su Xianze and Shangrao Industrial Investment have successfully shared this wave of photovoltaic dividends, and the possibility of continuing to reduce their holdings in the future is not ruled out.
Jietai Technology, the head photovoltaic manufacturer at that time, after joining Junda Co., Ltd., quickly expanded production with the help of the financing function of listed companies to get rid of financial constraints and returned to the list of leading manufacturers of photovoltaic cells.
Junda shares, with the help of this merger and acquisition, realized the gorgeous turn of automotive trim parts to photovoltaic and solved the performance problem. However, under the capital "winter" of the photovoltaic industry, there are still many challenges left for Junda shares.
Disclaimer: This report (article) is based on the public company nature of the listed company, based on the listed company's public company attributes, based on the listed company's public disclosure in accordance with its legal obligations (including but not limited to temporary announcements, periodic reports and official interactive platforms, etc.) as the core basis; The information or opinions expressed in this report (article) do not constitute any investment advice, and Market Value Storm does not assume any responsibility for any actions taken as a result of the use of this report.
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