The image is from Trina Solar's official website
On the evening of April 25, Trina Solar, one of the leading photovoltaic module companies, (688599. SH) released its 2023 annual and first quarter 2024 financial reports, the company's revenue exceeded 100 billion last year, allowing the photovoltaic manufacturing sector to expand the 100 billion camp, but the net profit has continued to decline since the peak in the first quarter of last year, and although it has rebounded in the first quarter of this year, it has still fallen sharply year-on-year, showing hidden concerns.
A new member of the "100 billion club" of photovoltaic revenue
According to the financial report, Trina Solar's operating income in 2023 was 113.392 billion yuan, a year-on-year increase of 33.32%, and the net profit attributable to the parent company was 5.531 billion yuan, a year-on-year increase of 50.26%. Overall, although last year's performance growth rate was inferior to that of 2022 (revenue increased by 91.21% year-on-year and net profit increased by 104.03% year-on-year), considering that the price of photovoltaic modules began to "plunge" in the second half of last year, and the bidding price was almost halved at the end of the year, compared with the performance of other companies in the photovoltaic sector, Trina Solar's growth is still very impressive, especially the net profit margin further increased to 4.88%, a year-on-year increase of 12.7%, exceeding the 6.71% in 2022 The growth rate is the best result in three years.
Image from Trina Solar's 2023 annual report
In 2023, the sales of photovoltaic modules is the core business of Trina Solar, and the operating income in this field will reach 76.449 billion yuan in 2023, accounting for 67.4% of the total revenue, among other main businesses, system products (including distributed photovoltaic system equipment sales, distributed photovoltaic system solutions, distributed photovoltaic digital energy management, distributed photovoltaic power generation business and support business) account for 24.3%, and power station business, intelligent microgrid business, power generation and operation and maintenance business together account for 6.4%. From the trend point of view, the revenue of photovoltaic module sales increased by 21.25% year-on-year, the cost growth was smaller than the revenue (16.1%), and the gross profit margin performance was better than that in 2022, increasing by 3.67% year-on-year to 15.54% (the gross profit margin in 2022 decreased by 0.8% year-on-year), while the revenue of system products almost doubled (93.63%), but the cost rose even more, reaching 101.94%, and the gross profit margin appeared 3.56% The year-on-year decrease was lower than the 13.46% of the PV module business.
From the perspective of data, the company's total module shipments are 65.21GW, second only to JinkoSolar (688223.SH, according to the financial report, the company's module shipments in 2023 will be 78.52GW) in the shipment list of InfoLink and other institutions (601012.SH, LONGi's financial report has not yet been announced, and the actual comparison of the shipments of the two companies can be determined after the announcement).
The highlight of the company's module business was due to the release of N-type advanced production capacity. In the financial report, Trina Solar said that the sales proportion of its N-type TOPCon module products in 2023 has increased significantly, the sales of the company's high-power 210 series photovoltaic products have increased significantly and have been recognized by the market, and the gradual release of the company's self-produced N-type silicon wafer production capacity has further reduced the comprehensive cost of the company's module products. Trina Solar said that in 2023, it achieved an industry-leading industrialization efficiency of N-type TOPCon cells, with a conversion efficiency of 26.21% for mass-produced HJT cells, ranking first in the industry among mass-produced cells of the same size. According to the China Photovoltaic Industry Association (CPIA), since August last year, N-type modules have risen rapidly in domestic PV bidding, accounting for 7% of the total monthly ratio from September to December, and the relevant market demand is more vigorous this year, and InfoLink has predicted that by the end of 2024, the market share of N-type modules in the domestic market is expected to reach nearly 8% (about 27% by the end of 2023).
Overseas markets have always been valued by Trina Solar, but the proportion of the company's revenue in overseas markets weakened last year due to the fierce global PV competition and changes in trade policies in Europe and the United States. Specifically, in the revenue structure in 2023, the domestic market accounted for 56.8% of the total revenue, an increase of 7.3%, while the proportion of the overseas market decreased to 43.2%. Europe still accounts for the majority of overseas business, followed by the United States and Japan, but in 2023, the proportion of Europe and Japan will decrease, and the proportion of the United States will increase. In terms of overseas production capacity, Trina Solar has previously built 6.5GW of integrated production capacity of crystal pulling slices, cells and modules in Southeast Asia (Thailand and Vietnam), and in 2023, the company will add planned capacity projects in the United States, Indonesia and the United Arab Emirates.
Last year, Trina Solar's revenue exceeded 100 billion yuan, and Tongwei Co., Ltd. (600438. SH) and LONGi Green Energy, there are currently four enterprises with annual revenue of 100 billion yuan in photovoltaic manufacturing.
Net profit in Q4 2023 will fall off a cliff
Although the annual performance is still impressive, if we look at it on a quarterly basis, we can see the difficulties and pressures that Trina Solar encountered in the second half of last year.
From the perspective of revenue, Q2 last year has maintained month-on-month growth, but the growth rate of Q3 and Q4 is significantly weaker than that of Q2, and by Q1 of 2024, revenue has decreased by 43.43% month-on-month.
From the perspective of profitability, the net profit attributable to the parent company from Q2 in 2022 continued to grow month-on-month, and was terminated in Q3 of 2023, while Q4 suffered a cliff-like decline, from 1.537 billion yuan in Q3 to a decrease of 70.45% month-on-month to only 454.3 million yuan, and a year-on-year decline of 64.48%. In the first quarter of this year, although the net profit attributable to the parent company increased by 13.53% quarter-on-quarter, it was only at the level of 515.7 million yuan, and the year-on-year decline further expanded to 70.83%, which was even lower than the level of 543.2 million yuan in Q1 of 2022.
The data comes from Straight Flush iFinD, charted by Titanium Media APP
Trina Solar's financial report also mentioned that since the second half of last year, the relationship between supply and demand in the industry has changed, and the overall price of the photovoltaic industry chain has shown a fluctuating downward trend, the company's module product selling price has decreased year-on-year, and the profitability of photovoltaic modules has declined.
According to the statistics of the Silicon Branch of the China Nonferrous Metals Industry Association and InfoLink, module prices were generally above 1.8 yuan/W at the beginning of last year, and fell below 1 yuan/W by the end of the year, and continued to decline in January this year. On April 17, Trina Solar and JinkoSolar, which have the most obvious advantages in N-type substitution, announced that they would lower their module quotations, with some bases lowering their module quotations by 2 cents/W, and the lowest price of RMB 0.82/W quoted by Trina's Suqian plant. The Silicon Branch of the China Nonferrous Metals Industry Association recently predicted that the price of the photovoltaic industry chain will continue to decline, and the second quarter may face greater pressure for the photovoltaic head enterprises whose performance has gradually shown weakness.
The previous high point of Trina Solar's stock price appeared in August 2022 (the high point of the stock price of many photovoltaic companies such as LONGi appeared at the end of 2021), reaching a maximum of 87.85 yuan / share, and then it has been falling all the way, as of the close of trading on April 25, the stock price was 19.94 yuan / share, a decrease of 77.3% from the peak, and it has fallen by about 3% this year alone.
In addition, according to Trina Solar's previous announcement, the company will participate in the 2023 PV industry collective performance briefing hosted by the Shanghai Stock Exchange on May 7, and JinkoSolar, which previously announced its annual report, also said it would participate in this collective performance briefing. (This article was first published on Titanium Media APP, author|Hu Jiameng, editor|Liu Yangxue)
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