The performance and stock price are double-killed, Aiko shares are in a predicament, and the transformation of BC has not yet succeeded, and the major shareholders will first "fall into the pocket"?

A few days ago, Aiko Co., Ltd. (600732.SH), which holds high the banner of BC technology route, released the industry's first bifacial BC module to fill the gap in the centralized power station market, which undoubtedly adds a fire to the long-lasting battle for the next generation of photovoltaic technology route. The BC technology route has been around for a long time, until the end of September this year, after the leading photovoltaic company LONGi Green Energy (601012.SH) officially announced that it would focus on investing in the BC technology route, this originally niche technology route was completely pushed to the forefront.

In fact, as early as 2021, Aiko Co., Ltd. launched its self-developed N-type ABC battery products for the first time, and spent 10 billion yuan to expand production this year. It should be pointed out that the BC technology route has no obvious advantage in investment cost, which is quite fatal in the current situation of "volume rise and price fall" in the industrial chain.

In addition, at a time when major photovoltaic companies are accelerating their integrated layout to achieve cost control and quality control, Aiko, which only produces modules and cells, is facing a lot of pressure. Due to the impact of supply and demand in the industry, the sales price of products declined, and the company's revenue fell by more than three percent in the third quarter. In this context, it remains to be tested whether Aiko shares can turn around against the wind with the help of BC technology route.

Bet on BC, the cost of investment is higher than that of peers

On December 20, Aiko officially launched the industry's first high bifaciality ABC module. The day after the product launch, the company's stock price rose 4.57% to 15.32 yuan. For a highly competitive industry, technological breakthroughs have excited the market. However, this momentum did not last, as of December 27, the company closed down 2.24% at 15.68 yuan.

In fact, when there was a major change in the technical route of the photovoltaic industry last year, Aiko was unique and chose the non-mainstream N-type BC technology route. It was not until September this year that LONGi Green Energy, known as the technical vane, joined the BC camp with a clear banner, and pushed this originally niche technical route to the forefront.

Although Aiko shares entered the game early, the observer network noticed that it was not until the first half of this year that Aiko shares revealed in the semi-annual report that the company's ABC modules have achieved partial sales, and the average revenue per watt excluding tax is about 2.20 yuan. In the same period, public data shows that the highest price of photovoltaic modules in June has fallen to 1.77 yuan/W, the lowest price is 1.3 yuan/W, and the average price is 1.573 yuan/W.

According to the company's 2023 semi-annual report, as of the reporting period, the average mass production conversion efficiency of ABC cells has reached 26.5%, and the mass production and delivery efficiency of ABC modules can reach 24%. At the time, this efficiency was almost unmatched.

However, Tongwei announced in November that the power of the company's 66-version 210 heterojunction module reached 745.6W, and the conversion efficiency exceeded 24%. The average conversion efficiency of its NC cells has been increased to 25.7%. For another example, the HPBC cell that LONGi Green Energy has mass-produced has a conversion efficiency of 25.59% and a maximum of 25.8%. When converted to modules, the conversion efficiency is 23.3%.

Based on the two factors of price and conversion efficiency, the module price of Aiko does not seem to be cost-effective. Although the cost of its production and manufacturing links is unknown, it can be glimpsed from the investment cost of equipment capacity.

Checking the historical announcement, the observer network noticed that the total investment of Aiko Co., Ltd.'s "Zhuhai New Generation High Efficiency Crystalline Silicon Solar Cell Construction Project with an Annual Output of 6.5GW" is 5.4 billion yuan, of which the equipment investment is 2.925 billion yuan. Based on this, the investment cost per GW of cells is 830 million yuan, and the equipment investment is 450 million yuan.

In terms of equipment investment costs, the current industry investment unit cost of TOPCon is 150 million/GW, and HJT is less than 350 million/GW, and both are in the cost reduction channel.

Compared with LONGi Green Energy, which is also a BC technology route, the cost difference between the two in terms of equipment investment is obvious. In January this year, LONGi Green Energy changed its monocrystalline cell project to Xixian Leye's 29GW high-efficiency monocrystalline cell project, and made it clear that it would introduce the company's self-developed HPBC high-efficiency cell technology. According to the announcement, the average investment per GW of cell production capacity is 243 million yuan, less than one-third of Aiko's, and the equipment purchase cost is 195 million yuan, less than one-half of Aiko's.

In the case that cost has become the most important competitive factor in the photovoltaic industry, the investment cost of Aiko ABC battery is higher than that of its peers, or it may hide greater risks.

Suspicious of intensive related-party transactions with major shareholders

The observer noted that part of the investment equipment of Aiko ABC project came from Zhuhai Max Automation System Co., Ltd. (hereinafter referred to as "Zhuhai Max"), an affiliated enterprise indirectly controlled by Chen Gang, the actual controller of the company.

On December 9, Aiko announced that it purchased a total of 36 sets of photovoltaic cell equipment from Zhuhai Max, with a total contract amount of 237 million yuan (including tax), constituting a related party transaction.

Founded on January 24, 2022, Zhuhai Max focuses on the R&D, manufacturing and sales of solar (PV) crystalline silicon cells, semiconductors, display glass and other wet process equipment. From the perspective of equity structure, Zhuhai Hengqin Minghao Management Consulting Co., Ltd. (hereinafter referred to as "Zhuhai Hengqin Minghao") holds 90% of the shares, and Zhang Lin holds 10% of the shares. Chen Gang, the actual controller of the company, holds 70% of the shares of Zhuhai Hengqin Minghao and indirectly controls Zhuhai Max.

According to the announcement, such a company, which was established less than two years ago, has industry-leading technical advantages in solar crystalline silicon cell wet chemical equipment, developed and mass-produced the world's first photovoltaic coating equipment with independent intellectual property rights, and has successfully mass-produced various types of solar crystalline silicon cell wet chemical equipment and intelligent equipment, which can provide comprehensive and efficient various wet process equipment and intelligent equipment solutions.

In the past 12 months, the company and its subsidiaries have had a total of 19 related party transactions with it, with a cumulative contract amount of 452 million yuan.

The announcement disclosed that the equipment purchased this time is a tank cleaning machine. In response to this related party transaction, Aiko Co., Ltd. said that it is a customized equipment suitable for the 15GW high-efficiency crystalline silicon solar cell project in Yiwu, Zhejiang, and the trough cleaning machine purchased from Zhuhai Max in August 2023 is the same renewal, and the equipment to be purchased this time uses the same pricing principle, that is, the price is based on the production cost and target profit margin of the product.

In fact, there are many well-known manufacturers of solar cell equipment in China, as for why they choose to purchase equipment from the newly established company of the major shareholder, Aiko shares emphasized that the estimated average gross profit margin of the trough cleaning machine to be purchased by the company is lower than the gross profit margin level of comparable companies in the same industry, the main reason is that the purchase of trough cleaning machine equipment has been relatively mature in terms of technology and process, and the production capacity of a single machine is large, and the purchase price has also decreased in the case of bulk procurement.

It is worth mentioning that the 36GW project in Yiwu, this year Aiko also announced the construction of a 30GW photovoltaic project in Jinan, which may also mean that there are still several hundreds of millions of large orders flowing to major shareholders in the future.

The performance and stock price were killed, and the performance in the third quarter fell sharply

Aiko has high hopes for BC cells, and believes that N-type ABC modules will bring the second growth pole of the company's operating performance on the basis of the original PERC cell business, and continue to enhance the company's competitiveness.

In April this year, Aiko Co., Ltd. successively threw out three expansion plans, including 10.6 billion yuan to build Zhejiang Aiko 30GW new high-efficiency photovoltaic module project, 12.961 billion yuan to build Zhejiang Yiwu 15GW high-efficiency crystalline silicon solar cell and 15GW module project, and 6.4 billion yuan to build Zhuhai Phase I 3.5GW high-efficiency crystalline silicon solar cell expansion project and 10GW supporting module project, with a total investment of up to 30 billion yuan.

Since 2022, Aiko's construction projects have begun to rise sharply, from 642 million yuan in 2021 to 1.802 billion yuan, and by the end of the third quarter, it has increased again to 4.072 billion yuan.

Labor pains inevitably arise during the transformation process. On the one hand, its ABC cells and modules have not yet become a climate, on the other hand, the industry competition is intensifying, and when major photovoltaic manufacturers are accelerating the integrated layout to achieve cost control and quality control, Aiko shares, which only produce modules and cells, are facing a lot of pressure.

Judging by the latest earnings report, this concern is becoming a reality. In the first three quarters of this year, Aiko's revenue growth rate was -12.43%, and the attributable net profit growth rate was 35.77%, which has slowed down significantly. Especially in the third quarter, revenue and attributable net profit both fell sharply. Specifically, its revenue growth rate was -35.3%, and the attributable net profit growth rate was 27.14%.

The performance pressure has also affected the trend of Aiko shares in the secondary market, Oriental Wealth data shows that as of the close of December 27, the company's share price has fallen by 41.10% since the beginning of this year.

In addition, in the context of intensified competition in the industry, it is difficult for Aiko shares to stand alone, and the risk of high debt cannot be ignored. Judging from the data of the third quarterly report, the total liabilities of Aiko shares are currently 23.16 billion, and the asset-liability ratio is 69.8%, which is higher than that of LONGi Green Energy, which is also a BC technology route.

Although Aiko shares are in a hurry to lay out the BC technology route, this means that the company's capital needs are not small. However, under the pressure of performance and the fact that its own family background is not strong, Aiko shares rely on external financing, and since its listing in 2019 for four years, Aiko shares have planned 4 private placements and completed 2 times.

In the case of intensified competition in the industry, whether Aiko shares can survive until the arrival of the BC battery era still needs to be verified by the market.