On April 29, LONGi Green Energy's 2023 annual report was released, with operating income of 129.498 billion yuan during the reporting period, exceeding 120 billion yuan for two consecutive years. Affected by the rapid decline in industrial chain prices and impairment provisions, the net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 10.834 billion yuan, and the comprehensive gross profit margin was 18.26%. As of the end of 2023, the company's asset-liability ratio was 56.87%, with sufficient cash reserves, and it maintained a stable financial position and anti-risk ability during the period of industry operating fluctuations due to price decline.
The imbalance between supply and demand in the industry has intensified, and the transformation and upgrading of new production capacity has accelerated
Under the pressure of a serious imbalance between supply and demand, PV product prices fell sharply in 2023, especially since the fourth quarter of 2023, module bidding prices have repeatedly hit new lows, and module prices have fallen below RMB 1/W. According to InfoLink data, in 2023, polysilicon densifier prices will drop by about 70%, wafer prices by about 60%, and module prices by about 50%.
Affected by this, in 2023, LONGi Green Energy will conduct an impairment test on assets with signs of impairment, and plans to make an impairment provision of 7 billion yuan, mainly including a provision of 5.2 billion yuan for inventory decline and a provision of 1.6 billion yuan for impairment of fixed assets. The company achieved operating income of 17.674 billion yuan in the first quarter of 2024, a year-on-year decrease of 37.59%.
During the reporting period, LONGi Green Energy actively accelerated the upgrading and mass production of HPBC and TOPCon production capacity, with an annual output of 29GW in Xixian and 4GW in Taizhou with an annual output of high-efficiency HPBC cell production capacity all put into operation, and Ordos with an annual output of 46GW of silicon ingot and wafer projects and 30GW of cell projects, and Wuhu 10GW module projects have been put into operation one after another. With the acceleration of capacity transformation for future-oriented technologies, the company expects to achieve the target of 135GW of wafer shipments and 90-100GW of cell and module shipments in 2024.
In addition to the imbalance in the value of the industrial chain, the short-term fluctuation of LONGi's performance is closely related to the transformation and iteration of new and old production capacity. This year, LONGi Green Energy's Jiaxing Lighthouse Factory, which represents the highest level of intelligent manufacturing and digitalization in the global photovoltaic industry, was completed. LONGi Green Energy's Jiaxing Lighthouse Factory has developed and implemented more than 30 digital technologies to promote intelligent manufacturing, reducing unit manufacturing costs by 28%, yield losses by 43%, production lead times by 84%, and unit energy consumption by 20% within one year. In the future, LONGi's other production bases around the world will take the lighthouse factory as an excellent case to continuously optimize production cost reduction measures and promote a wider range of cost reduction and efficiency improvement.
The new silicon wafer will be mass-produced in the second quarter and the second-generation HPBC second-generation product will be launched to the market in the second half of the year
In 2023, LONGi Green Energy will ship 125.42 GW of monocrystalline silicon wafers (including 53.79 GW of external sales), 5.90 GW of monocrystalline cells, and 67.52 GW of monocrystalline modules (including 66.44 GW of external sales). In the first quarter of 2024, the company shipped 26.74 GW of monocrystalline silicon wafers (12.43 GW of external sales), 1.51 GW of monocrystalline cells, and 12.89 GW of monocrystalline modules (12.84 GW of external sales), a year-on-year increase of 16.55%.
In the first quarter of 2024, the company launched double-sided double-glass damp and heat-resistant modules based on the advantages of HPBC technology, which effectively met the reliability requirements of most domestic distributed scenarios for high temperature and damp heat resistance of photovoltaic modules, and enhanced the differentiated competitive advantage of the company's full-scenario module product matrix.
According to the report, LONGi Green Energy has successfully developed the second-generation HPBC product, which can achieve more than 5% higher module power than TOPCon modules of the same specification and increase the power generation capacity of the whole life cycle of the power station by 6.5%~8%, which is planned to be launched in the second half of 2024. Zhong Baoshen, chairman of LONGi Green Energy, previously revealed that the efficiency of the new product will be in the leading position in the world and get rid of homogeneous competition. The company has accelerated the transformation of PERC production capacity, and its products will be in a very significant leading position in 2025.
LONGi Green Energy adheres to the concept of innovation and development, and its R&D investment in 2023 will be 7.721 billion yuan, accounting for 5.96% of its operating revenue. Focusing on cost reduction and efficiency increase, the company carried out BC technology product upgrades and next-generation technology research and development, continued to track and invest in TOPCon, HJT, tandem and other technical routes, and created a world record of 27.09% for back-contact crystalline silicon heterojunction solar cells and 33.9% for crystalline silicon-perovskite tandem cell efficiency, further consolidating the company's R&D strength and cutting-edge technology reserves.
The industrial competition pattern has been reshaped, and steady operation has passed through the cycle
In 2024, the industry will enter the stage of accelerated elimination, and the global operation capabilities of enterprises, including marketing, technology research and development, financing capabilities, operation management, and business model innovation, will become the focus of competition, and the competitive pattern of enterprises will accelerate differentiation, and the short-term pain of the industry will not affect the long-term value of leading enterprises.
Affected by the rapid decline in prices in the industrial chain and the tightening of market financing policies, enterprises with high debt and homogeneous products have begun to withdraw from the market. Li Zhenguo, founder and president of LONGi Green Energy, said in CCTV's "Dialogue: New Year's Talk" column that being too aggressive may lead to problems, and being too conservative may also be eliminated. From 2021 to 2023, LONGi's asset-liability ratios were 51.31%, 55.39% and 56.87%, respectively, and the company has been awarded the highest bankability rating recognized by PV ModuleTech for many consecutive years with its good manufacturing capacity and financial health, and its financial health index continues to lead the industry, demonstrating a strong ability to respond to industry risks.
During the reporting period, the company optimized and upgraded its overseas production capacity layout, further improved its overseas supply capacity, and gradually put into operation projects such as 2.8GW modules in Malaysia and 3.35GW cells in Vietnam on schedule, and the construction of 6.6GW silicon ingot projects in Malaysia progressed in an orderly manner. With the official commissioning of the company's 5GW module joint venture plant in Ohio, the United States, in the first quarter of 2024, the company's shipment capacity in the US market will be enhanced.
With the clearing of backward production capacity in the market, the performance of companies with product leadership will gradually recover. Zhong Baoshen, chairman of LONGi Green Energy, said that the company's overall business throughout the year will show changes from low to high, and to improve quarter by quarter. LONGi's overall shipment growth rate this year will not be lower than the industry average growth rate, and product shipments will continue to grow. In the next three years, the company expects the annual production capacity of monocrystalline silicon wafers to reach 200GW, of which Terry's wafer production capacity accounts for more than 80%; The annual production capacity of BC cells will reach 100GW, and the annual production capacity of monocrystalline modules will reach 150GW.
Text丨Zhong Xinyuan