In fact, I don't want to talk about LONGi, not only because the group of chicken fans is too large, and it is difficult for the butt to decide the brain to discuss rationally, but also because the current LONGi can't say clearly, but there are always people in the background asking, so I can only talk about a few points that everyone cares about and Leo himself understands and feels.
01
LONGi's words are a bit too much
I don't know if you have the same feelings as Leo, LONGi's words have been a bit too much in recent years, especially in the past two or three years, whether it is released in the name of the company or the speeches of corporate leaders in public, there are too many.
I don't know that LONGi is a consumer enterprise, but you LONGi is not, it is a photovoltaic company, a high-tech enterprise (although some people do not think that photovoltaic is high-tech), and it is a 2B enterprise.
In short, no matter from which point of view, in terms of business alone, LONGi is too keen on communication to the public!
2B companies generally do not pay attention to the publicity for the C-end, and even don't bother to publicize at all, especially those industry leaders, after all, the companies in the industry are familiar with them, and the logic of 2B enterprises is very simple: as long as the technology is hard enough and the cost is competitive, they are not afraid of no customers, and even customers need to come to the door to pay the money and then get the goods.
LONGi is so keen on external communication, especially in the past two years that the stock price has fallen, then LEO can only guess that this is due to stock price considerations.
After all, the market is worried that LONGi has lagged behind, and the overall trend of the photovoltaic industry is very poor, LONGi's speech is to give investors confidence and strive to protect the falling stock price trend.
Although it is not wrong to pay attention to the stock price, after all, the stock price is closely related to major shareholders, enterprise development, employee stability, etc., but it is not appropriate to pay too much attention, especially since LONGi's share pledge rate is not high, and there is no risk of liquidation, but it is difficult to doubt what listed companies think when they pay so much attention to the trend of the secondary market.
Then there is the matter that the market is most concerned about whether LONGi has fallen behind, which is the focus of market debate, but it is actually difficult to say clearly.
Judging from the objective facts, LONGi's life has been very difficult in the past two years.
02
LONGi has fallen behind
As the "double champion" of wafer and module shipments in 2020 and 2021, LONGi was surpassed by TCL Zhonghuan in 2022 and lost its leading position in the wafer industry.
In terms of modules, as of the end of the third quarter of 2023, JinkoSolar shipped 52 GW, surpassing LONGi's 43.53 GW, and won the half-way championship in the 2023 module shipment ranking from LONGi, according to Jinko's annual module shipment target of 70-75GW, which means that it can return to the world's first position!
At LONGi's third-quarter results conference, Li Zhenguo admitted that LONGi's wafer shipments this year can only reach 90% of the expected at the beginning of the year, and module shipments can only reach 85%, while Jinko is very confident that the full-year sales target will be achieved.
The direct cause of this dilemma is that there are some problems in LONGi's route selection in the N-type battery era.
In recent years, as the P-type conversion rate has encountered ceiling problems, the industry has gradually turned to N-type batteries, and now topcon has taken the lead in running out, and JinkoSolar has now become a topcon technology spokesperson, and the proportion of N-type shipments is expected to increase to about 75% throughout the year. But LONGi is seriously behind on topcon and bets on the BC battery route.
Although LONGi has a set of logical and self-consistent statements on this, LONGi claims that the company's operation has always been steady, and the crazy capacity expansion of the industry in the past two or three years will inevitably bring serious overcapacity, and topcon is a transitional technology, and the mainstream technology of photovoltaic cells in the next 5 to 6 years is definitely BC cells. Since BC batteries will be the mainstream technology in the long run, choosing to lay out in advance is the best solution.
Regarding this point, Zhong Baoshen, chairman of LONGi, made it very clear in an interview: "LONGi should be the company with the earliest release plan for TOPCon batteries, which is now sought after by everyone. Moreover, in 2021, when we built the TOPCon cell production line, our BC technology was also mature, so we decisively reduced and delayed the TOPCon cell expansion plan, and directly built BC cell production capacity at the same time. ”
LONGi's statement is indeed self-consistent, and it can be said that there is no problem, including the fact that there is overcapacity in the industry, at least for now, but since LONGi is so optimistic about the BC route and chooses all in BC, why did it expand its topcon production capacity by 30GW in Ordos?
Although Li Zhenguo also had his own set of explanations for this at the performance exchange meeting: "TOPCon is because of LONGi's market position and huge pressure from the front line, because there is no seasonal product, there is no way to explain to customers, and I can only be forced to go to TOPCon production capacity, but TOPCon is difficult to make money in its life cycle, and its profitability is not as good as PERC, and LONGi does not take the initiative to do loss-making business." ”
Since you say that the profitability of the topcon life cycle is not as good as perc, it means that you have a detailed and comprehensive calculation, why can't you convince the customer? Since BC is so firmly determined that BC is the future, and the company's investment is also based on the future, it should not be optimistic about topcon production capacity.
Anyway, in the eyes of LEO and the vast majority of investors, LONGi's choice of technical route has been problematic in this wave of P-shaped to N-shaped transformation, but the company is stubborn and unwilling to admit it.
03
The root cause of LONGi's endless stumbles
It's hard to say whether All in BC is really so optimistic about this technology route, or because of the huge P-type production capacity and the fact that the topcon field has fallen behind its competitors and cannot make a decision.
However, one thing is clear, the process steps of BC cells are very complex, and it is very difficult to reduce costs, whether it is in the consumption reduction of silver paste or the thinning of silicon wafers, there is still a long way to go. According to industry estimates, in the case of similar conversion rates, in the next two or three years, the cost difference between BC and TOPCon will be more than 1 cent/W, on the contrary, topcon is still large-scale, and the cost still has a lot of room for decline.
Unless BC's technical limitations and production capacity can really break through quickly and quickly level the gap with TOPCon, but this is a matter of the future, no one knows.
Not only is the photovoltaic field so unique, but the layout in the field of energy storage, LONGi is also the same, when competitors are on large-scale electrochemical energy storage, LONGi is taking hydrogen energy, shouting "green electricity + green hydrogen" is the future!
Although LONGi has indeed made some progress in the field of hydrogen energy, the official said, "Since its establishment, LONGi Hydrogen Energy has completed the first 1,000 standard square electrolyzer off the assembly line, the first 10,000-ton green hydrogen demonstration project put into production, the first 10,000-ton green ammonia project won the bid, released two benchmark products, and has launched the 'green electricity + green hydrogen' system solution." ”
But we all know that hydrogen energy is still facing the problem that equipment and technology are controlled by others, coupled with the relatively long supply chain of the hydrogen energy industry chain, in the case of relatively few downstream application scenarios, large-scale commercial use is far away, and it is also difficult to reduce costs, although from a longer-term perspective, hydrogen energy is completely pollution-free, green electricity + green hydrogen is indeed expected to become a real new energy future.
LONGi's statement on this is that it has enough confidence to overcome difficulties in the future, and also has confidence in China's manufacturing, believing that it can overcome technology and reduce costs.
But how long will this future be?
Again, no one knows!
This is the problem of LONGi now: it seems that everything is logically self-consistent, but it will take a while before the logic is realized, as short as a year or two, and I don't know how long it will take!
I don't know how long the bright future will come, but the problem facing LONGi is clear: competitors are conquering the city in the TOPCON field and constantly eroding their market share. It is also very realistic whether its huge P-type production capacity will face a huge asset impairment.
It is not denied that LONGi was once a very good and successful company, and it is likely that it will be just as good in the future.
It can't be said that capital is short-sighted, but at least they are all rational and leave if they can't see clearly, which is why Hillhouse Capital invested in LONGi at a high premium two years ago, but at the end of last year, it was revealed by an official document from the China Securities Regulatory Commission to reduce its holdings in LONGi through the refinancing business.
Maybe the future is very good, who knows? Anyway, it is very grim now, fortunately, LONGi still has nearly 55 billion cash in its account, at least there are many possibilities, bless LONGi, and bless all the friends who stick to LONGi.