The product has entered an iterative cycle, and the financing threshold is getting higher and higher, and photovoltaic investment and financing focus on innovative technologies

■Reporter Dong Zitong "China Energy News" (2024-05-06 Edition 01)

100 MW photovoltaic power station in Jianshanying, Tianxin Township, Wuding, Datang. 　　LONGi Green Energy/Courtesy photo

　　In the first quarter of this year, the net financing of mainland industrial bonds has achieved a "good start", and 2.47 trillion yuan of industrial bonds have been issued, and the pace of issuance has been significantly accelerated.

　　In recent years, the demand for photovoltaic products has been rising, prompting more and more enterprises and capital to pour into the photovoltaic market. After the "expansion tide" and "investment tide" in the first half of 2022 and 2023, the manufacturing side of the photovoltaic industry has ushered in new changes, and the intensification of competition has prompted enterprises to pay more attention to technological innovation in financing.

　　The difficulty of investment and financing has increased

　　Duan Sha, a senior analyst at the Industrial and Commercial Enterprise Department of Oriental Jincheng, said that in the first quarter of this year, the net financing of mainland industrial bonds was 794.9 billion yuan, making up for the net financing gap of the previous year. Innovative varieties of bonds promote the high-quality development of the bond market, among which the equipment manufacturing industry, represented by power equipment, has performed relatively well.

　　As a related industry of power equipment, photovoltaic has also maintained a good development trend as a whole. Duan Sha said that in recent years, the credit line of the photovoltaic industry has increased significantly, from more than 200 billion yuan in 2020 to more than 600 billion yuan in 2023, with an average annual compound growth rate of 48%.

　　According to data from the third-party information platform iFinD Flush, as of the end of March this year, the average credit line used by photovoltaic enterprises accounted for 46.17% of the total credit limit of banks, which is at a high level. In addition, according to incomplete statistics, the proportion of bank credit use of enterprises such as Jingyuntong, Shuangliang Energy Conservation, Foster, Hesheng Silicon, and Solar Energy has exceeded the average level. This value is even as high as more than 90%.

　　Duan Sha said that since 2021, the refinancing (fixed increase + convertible bonds) of photovoltaic enterprises has remained at a high level, and from 2021 to 2023, the amounts will be 85.6 billion yuan, 99.9 billion yuan and 57.3 billion yuan respectively, totaling more than 240 billion yuan; In 2022 and 2023, it will be 87.2 billion yuan and 13.7 billion yuan, respectively.

　　In addition, the current listing progress of photovoltaic companies has slowed down, and the difficulty has increased. According to incomplete statistics, there are currently 26 photovoltaic companies in the listing review stage, 17 companies in the listing counseling stage, and another 5 photovoltaic companies have terminated their listing.

　　Wang Jin, president of the Intercontinental Energy Consulting Institute, told China Energy News that since the second half of 2023, the pace of financing and expansion of the photovoltaic industry has slowed down, and many projects have been postponed or terminated. Previously, the rapid growth of industry demand drove the enthusiasm of photovoltaic enterprises to expand production and investment, and many enterprises entered the game across borders. With the increase of players and the rapid expansion rate, the era when the photovoltaic industry can achieve profitability only by increasing capital is over. Nowadays, the financing difficulty of the photovoltaic industry in the capital market has increased.

　　The technical knockout round has begun

　　In Duan Sha's view, the changes in the financing environment of the photovoltaic industry are mainly related to two aspects. First, the regulation has been tightened. In August 2023, the China Securities Regulatory Commission (CSRC) proposed in the "Regulatory Arrangements for Coordinating the Balance of the Primary and Secondary Markets to Optimize IPO and Refinancing" that the current market situation should be fully considered, the counter-cyclical adjustment mechanism of the primary and secondary markets should be improved, and the rhythm of IPO and refinancing should be reasonably grasped. The second is the change of market supply and demand. The acceleration of the implementation of photovoltaic manufacturing projects has led to intensified competition in the industry.

　　Wang Jin believes that the development logic of the photovoltaic industry is technology first. "Traditional, non-revolutionary technologies don't have the value of financial investment. If the enterprise does not have the next generation of disruptive core technology, its investment and expansion is to repeatedly expand and reproduce, the value is not high, and the financing is more difficult, and only advanced technology can be favored by the capital market. ”

　　Jiang Hua, deputy secretary-general of the China Photovoltaic Industry Association, said that from the perspective of economic and industry development, the photovoltaic industry to maintain sufficient production capacity can promote industry competition, help promote technological progress, and break the price monopoly. In the next 1 to 2 years, the PV industry will usher in small technology iterations, and in 3 to 5 years, it will usher in large technology iterations. "P-type production capacity will be eliminated, and the current production capacity we calculate is to include this part of the elimination."

　　Wang Jin pointed out that the enterprise knockout competition has begun, and enterprises with capital and resource advantages, gathering industry professionals, and having new technology and equipment are expected to break through in this round of competition. With the development and maturity of the photovoltaic industry, only real money technology can shake the capital market.

　　Duan Sha agreed. She proposed: "In the context of the conversion of old and new kinetic energy, only technology can pass through the cycle and cross the new stage of production capacity, and photovoltaic companies should promote financing more by improving their R&D capabilities." In the future, the speed of green + high-end transformation will be faster, leading capital expenditure will begin to exert force across cycles, and high-end manufacturing enterprises will also pay attention to bond financing. Judging from the current situation, specialized and special new enterprises are worth looking forward to, and the industry competition pattern will also be optimized. ”

　　Enter a phased cycle

　　With the intensification of competition and the increasing difficulty of investment and financing, the market has begun to worry about the performance of the photovoltaic industry in the financial field. In this regard, a number of industry insiders unanimously said that under the "double carbon" goal, the development prospects of the photovoltaic industry are still good. The photovoltaic industry is already characterized by fast technological development and short iteration cycle, and the photovoltaic industry will also usher in new development opportunities under the background of the positive overall development of industrial bonds.

　　Jia Dan, Deputy Secretary-General of the Financial Committee of the China Photovoltaic Industry Association, emphasized that green bonds are an important part of green finance, which can provide financial support for green projects, thereby promoting the development of green industries and helping the green and low-carbon transformation of the economy and society. As an important part of clean energy, photovoltaic is also an important area for green bond issuance.

　　In early April, the People's Bank of China and seven other departments jointly issued the Guiding Opinions on Further Strengthening Financial Support for Green and Low-Carbon Development (hereinafter referred to as the "Guiding Opinions"), indicating that they will support relevant financial products such as clean energy. It clearly states that financial institutions will be guided to support clean transportation, clean heating and ultra-low emission transformation in key industries, vigorously support the research and development, investment, promotion and application of clean energy, continue to promote the clean and efficient use of coal, and encourage financial resources to favor enterprises with high environmental performance levels. Support the issuance of transition bonds to meet the needs of low-carbon transformation such as the transformation and upgrading of energy production and consumption enterprises above designated size.

　　The relevant person in charge of the People's Bank of China said that under the premise of legal compliance, controllable risks and commercial sustainability, the Guiding Opinions encourage financial institutions to use green finance or transition finance standards to increase credit support for green development and low-carbon transformation in energy, industry, transportation, construction and other fields; We will further increase the capital market's support for green and low-carbon development, support eligible enterprises to list or refinance at home and abroad, raise funds for the construction and operation of green and low-carbon projects, and standardize the development of green bonds and green equity investment and financing business.

　　Wang Jin predicts: "The elimination of backward production capacity and uncompetitive enterprises, the acceleration of mergers and acquisitions, the rise and application of new technologies, this is the cycle that industrial development must go through." After the cycle, the PV industry will return to a stable situation again. ”

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