In the counter-cyclical environment, the quality and cost advantages of granular silicon are becoming more and more apparent, and the compressive toughness is full. On May 10, GCL Technology (03800. HK) announced its results for the first quarter of 2024, with revenue of about 5.47 billion yuan (RMB, the same below) and net profit attributable to the parent company of about 33 million yuan during the reporting period.
Since the beginning of the year, the photovoltaic industry has continued to decline last year, ushering in a "cold spring". Although granular silicon is trying its best to run on the innovation track of continuously improving quality, increasing quantity and reducing costs, GCL Technology's performance in the first quarter has declined year-on-year, mainly due to four reasons: first, due to market constraints, the average market selling price of polysilicon and silicon wafer products in the first quarter of this year has dropped sharply year-on-year, and has continued to fall below record lows; Second, due to the ramp-up of production capacity, the new production capacity of Inner Mongolia Hohhot Xinhuan Company is struggling to climb, and it is expected that after reaching full production in the second half of 2024, it will support the company's overall average cost of granular silicon to be significantly reduced, and its profitability will be significantly enhanced; Third, the R&D investment in high-tech new products has been continuously increased, and the R&D investment in core areas such as commercial mass production of perovskite single junction and tandem, CCz, silane, silicon-carbon anode materials and clean materials in the production of granular silicon has been continuously increased, and the R&D expenditure in the first quarter exceeded 400 million yuan; Fourth, the supply inversion of the industrial chain was serious, and the wafer business loss widened, and the wafer market experienced a serious decline in the first quarter, which in turn led to a year-on-year decline in sales revenue.
"Under the severe challenges of counter-cyclical, enterprises are undefeated only in innovation, and R&D is the most critical part. In the first quarter of this year, the company's R&D investment was at a high level in the same period, which strongly escorted the continuous improvement of the quality of granular silicon and the scientific research breakthroughs of high-tech core businesses such as perovskite, CCz, and silane. At the same time, losses in the wafer business dragged down the company's overall profitability. The person in charge of the operation of GCL Technology said.
The above-mentioned person in charge told reporters that from a longitudinal point of view, when the price of polysilicon fell sharply at the beginning of the year, GCL Technology's granular silicon was still at full production and full sales, which pulled down some profits. In the first quarter, GCL Technology's granular silicon output was about 65,500 tons, and the shipment volume was about 65,200 tons (including about 3,300 tons of internal sales), and the average external sales price (including tax) was about 55 yuan/kg. Horizontally, granular silicon shows the "lethality" of high quality and low cost, and even if the selling price is relatively low, the profit per ton still maintains sufficient resilience.
As of March this year, the turbidity level of granular silicon has all dropped to less than 120 NTU. MORE CRITICALLY, THE AVERAGE PROPORTION OF PRODUCTS WITH PARTICLE SILICA TURBIDITY LEVELS BELOW 100 NTU IS AS HIGH AS 75%, AND WITH PROCESS UPGRADES AND R&D BREAKTHROUGHS, THERE WILL BE ROOM FOR FURTHER REDUCTION IN THE FUTURE. At present, the price of polysilicon is almost bottoming, and as the price gap with rod silicon products narrows, the cost advantage of granular silicon will become more obvious.
GCL Technology said in the announcement that in the context of increasingly fierce competition in the photovoltaic industry chain and a large impact and squeeze on market prices, although the company's profitability and profit margins have been negatively affected, this "load" has forced granular silicon to continue to rely on technology and innovation to continuously raise the upper limit of product quality and reduce costs, and then temper the endurance and tension of granular silicon to counterattack the market.
"Quality + cost = market" is GCL Technology's unchanging development philosophy. The company said that after the long-term application and empirical verification of a number of downstream leading enterprises, granular silicon has been at the top level in the industry in terms of metal impurity control, and its application effect in the downstream N-type market is among the best. As of March this year, the average product proportion of 5 elements of granular silicon ≤ 0.5ppbw exceeds 90%, and the average product proportion of 18 elements of total metal impurities ≤ 1ppbw exceeds 60%.
It is worth noting that with the improvement of the quality of granular silicon and the positive feedback from the market, GCL Technology's share price has continued to rise this year, rising by 9.4% by the end of the first quarter, and by the close of trading on May 10, it has risen by more than 12.8%.
A senior analyst told reporters: "Entering the second quarter, polysilicon companies will face a difficult moment of overall losses, and whoever has good product quality and low cost will be able to live longer." Obviously, companies that are difficult to gain advantages in quality and cost are likely to not be able to survive until the third quarter. ”
Source: Global Zero Carbon