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Aiko shares bet on the unpredictable prospects of the BC route, and when the performance changed, the TOPCon project was accused of riding the wall

author:Tianfu Finance Network

Aiko Co., Ltd. (600732. SH) has not only raised questions about the changes in its technical route, but also has a large funding gap behind it.

The next generation of photovoltaic technology is starting a new round of competition, and Aiko previously released the industry's first bifacial BC module to fill the gap in the centralized power station market. This is another photovoltaic company that bets on the BC route, in addition to the official announcement of the leading photovoltaic company LONGi Green Energy, which focuses on the BC technology route.

At the beginning of this year, it planned to spend 10 billion yuan to expand production and continue to "bet" on the BC technology route, but the company has recently continued to increase the TOPCon capacity construction project, and there has been a "swing" in the route selection.

Aiko shares bet on the unpredictable prospects of the BC route, and when the performance changed, the TOPCon project was accused of riding the wall

In addition to upgrading the PERC cell production capacity of the Yiwu base to TOPCon cell production capacity, on the evening of March 18, Aiko announced that it had signed an investment cooperation agreement on high-efficiency photovoltaic cell projects (hereinafter referred to as the Chuzhou Project) with the People's Government of Quanjiao County, Chuzhou City, Anhui Province, of which the first phase has an annual output of 15GW and an investment amount of 6 billion yuan, using N-type TOPCon technology.

The above project is also the third time that Aiko shares have announced the construction of large projects in the past month, plus the previous projects in Jinan and Yiwu, with a total investment of more than 18 billion yuan, and as of the end of the third quarter of 2023, Aiko shares monetary funds of 4.882 billion yuan, and various interest-bearing liabilities of more than 5 billion yuan in the same period.

The investment cost of BC technology is high, and Aiko shares "borrow" TOPcon

"Glasses Finance" noticed that as early as last year, when the technical route of the photovoltaic industry changed, Aiko Co., Ltd. showed the choice of N-type BC technical route at that time. However, at that time, the industry mainly focused on technologies such as N-type transformation and perovskite tandem, and it was not until September 2023 that more attention was focused on this route after LONGi Green Energy, a leader in the photovoltaic industry, made a high-profile statement that it would join the BC camp.

On December 20, 2023, Aiko officially launched the industry's first high-bifaciality ABC module. However, "Glasses Finance" noted that it was not until the first half of the year that Aiko revealed in its semi-annual report that the company's ABC modules had achieved partial sales, with an average revenue of about 2.20 yuan per watt excluding tax.

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 this calculation, the price of ABC modules of Aiko is nearly 40% higher than the average price of the industry.

In terms of efficiency, 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 has reached 24%. However, Tongwei announced in November 2023 that the power of the company's 66-version 210 heterojunction module has reached 745.6W, and the conversion efficiency has exceeded 24%, and the average conversion efficiency of its NC cell mass production has increased to 25.7%.

Aiko shares bet on the unpredictable prospects of the BC route, and when the performance changed, the TOPCon project was accused of riding the wall

At the same time, the conversion efficiency of HPBC cells mass-produced by LONGi Green Energy is 25.59%, and the maximum is 25.8%. When converted to modules, the conversion efficiency is 23.3%. In other words, Aiko does not have a significant advantage in terms of module cost performance, while its equipment capacity investment cost is "far ahead".

"Glasses Finance" checked the historical announcement and learned 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 context of the photovoltaic industry's main focus on "reducing costs and increasing efficiency", the investment cost of ABC batteries of Aiko shares is higher than that of its peers, which is a bit out of place in the competition.

According to Bloomberg New Energy Finance, TOPCon will occupy 60% of the market share in 2024. In contrast, BC batteries are obviously slower to develop, and it is still difficult to bring large-scale profit margins and cash flow in the short term.

Perhaps there is a deviation between the actual development and expectations, since 2024, Aiko has successively announced the Yiwu base PERC cell production capacity technical transformation project, Chuzhou high-efficiency photovoltaic cell project investment cooperation agreement, according to estimates, combined with the Yiwu technical transformation project, Aiko shares are expected to form 30GW to 40GW of N-type TOPCon cell production capacity by the end of this year.

Regarding Aiko's recent actions in the field of TOPCon, some industry insiders believe that it is "based on the changes that existing customers have to make." ”

The performance has changed face, and the stock price fell by more than 40% last year

Although the prospect of the technical route is not clear, Aiko has high hopes for BC cells, and has said 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.

In April 2023, 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.

According to the data, 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 of 2023, it has increased again to 4.072 billion yuan.

In recent years, major photovoltaic manufacturers have accelerated the integrated layout, and the performance of Aiko Co., Ltd., which only produces modules and cells, has fluctuated significantly.

In the first three quarters of 2023, Aiko's revenue growth rate was -12.43%, and the attributable net profit growth rate was 35.77%, showing a significant slowdown.

Looking at the third quarter alone, revenue and attributable net profit both fell sharply. Among them, the revenue growth rate was -35.3%, and the attributable net profit growth rate was 27.14%.

On January 31, Aiko Co., Ltd. released a performance forecast, which is expected to have a net profit attributable to the parent company of 735 million to 775 million in 2023, a year-on-year decrease of 66.71% to 68.43%, and a non-net profit of 300 million to 340 million, a significant decrease of 84.30% to 86.14% year-on-year. Among them, the net profit attributable to the parent company in the fourth quarter was between -1.112 billion and -1.152 billion, the first single-quarter loss since 2022, and the loss was almost half of the net profit in 2022.

Oriental Wealth data shows that the company's share price has fallen by more than 40% since 2023.

Suspicious of intensive related-party transactions with major shareholders

"Glasses Finance" noted that part of the investment equipment of Aiko Co., Ltd.'s ABC project comes from Zhuhai Max Automation System Co., Ltd. (hereinafter referred to as "Zhuhai Max") indirectly and actually controlled by Chen Gang, the actual controller of the company.

On December 9, 2023, Aiko Co., Ltd. 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 connected transaction.

According to public information, Zhuhai Max was established on January 24, 2022, focusing 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.

It is such a company that has been established for less than two years, but it is known as "having industry-leading technical advantages in solar crystalline silicon cell wet chemical equipment, developing and mass-producing 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 year or so, Aiko and its subsidiaries have had a total of 19 related party transactions, with a cumulative contract amount of 452 million yuan.

In response to the latest related party transaction, Aiko 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 20238 belongs to 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.

As for why it chose to purchase equipment from the newly established company of the major shareholder, Aiko said 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 of comparable companies in the same industry, mainly because the trough cleaning machine equipment purchased this time is relatively mature in terms of technology and technology, and the production capacity of a single machine is large, and the purchase price has also decreased in the case of bulk procurement.

However, "Glasses Finance" noticed that at the market level, many investors still expressed a trace of concern about the related party transactions between Aiko shares and major shareholders.

There is a large funding gap behind the frequent expansion of production

The Chuzhou project disclosed by Aiko on March 19 includes the "Investment Cooperation Agreement for the Annual Output of 25GW High-efficiency Photovoltaic Cell Project" and the "Supplementary Agreement for the Annual Output of 25GW High-efficiency Photovoltaic Cell Project", and plans to invest in the construction of the first phase of the annual output of 15GW high-efficiency crystalline silicon solar cell production capacity project.

According to the plan, the total investment amount of the above projects is 6 billion yuan, of which the investment in fixed assets (including the part of government construction) is about 4.8 billion yuan, and the foundation and working liquidity are about 1.2 billion yuan.

This is the third time that Aiko shares have announced the construction of large projects in the past month, plus the previous Jinan and obligation projects, the total investment is as high as 18.7 billion, and after deducting the part borne by the government, Aiko shares need to raise about 15 billion, and the company's current monetary funds are 4.8 billion, while bearing more than 5 billion interest-bearing liabilities.

In addition, the data of the third quarterly report also shows that as of the end of the reporting period, the total liabilities of Aiko shares were 23.16 billion, and the asset-liability ratio was 69.8%, which was higher than that of LONGi Green Energy, a peer on the new technology route.

In fact, Aiko shares have always been very thirsty for funds, and since its listing in 2019 four years ago, it has planned 4 private placements and completed 2 times.

In February 2020, only a few months after the backdoor listing of Aiko Co., Ltd., it planned the first private placement, and finally raised 2.5 billion yuan for the Yiwu Phase III crystalline silicon cell project with an annual output of 4.3GW, the photovoltaic R&D center project and replenishment of working capital. In May 2022, Aiko Co., Ltd. once again planned to increase its shares, this time raising another 1.65 billion yuan for the construction project of Zhuhai with an annual output of 6.5GW crystalline silicon solar cells and replenishing working capital.

Regarding the issue of financial guarantee for the project, Aiko Co., Ltd. once said in the announcement that there is a certain uncertainty about whether it can raise sufficient funds for project construction in a timely manner in the future. At the same time, the financing of construction funds may also lead to an increase in the asset-liability ratio and financial costs, which in turn increases the risk of debt repayment

On March 2, Aiko issued 8 announcements in a row, providing guarantees for its subsidiaries in Zhuhai, Tianjin, Yiwu, Foshan and other places, with a total guarantee amount of 2.1 billion yuan.

According to statistics, Aiko has provided a total of 28.188 billion yuan of guarantees for its subsidiaries, and the total amount of guarantees accounted for 281.37% of the net assets, and it is also gradually approaching the total guarantee quota of 31.5 billion yuan. The risk of performance of guarantee liability is noteworthy.