In 2017, the annual theme of the “crazy expansionâ€, the photovoltaic industry's production capacity has grown geometrically. However, just half a year later, the introduction of the "531 Photovoltaic New Deal" was like a fierce brake on the same foot, which sounded the alarm for the violent photovoltaic enterprises that have been raging for years.
Under the aura of the world's first market, the “reverse†of the New Deal has opened a new cycle of photovoltaic de-capacity. In the deleveraging environment, local governments and banks have been unable to provide “ammunition†for high-cost PV companies, medium- and long-term prospects or licensing periods, but how will companies self-help in the short term?
Sale of assets
According to public statistics, since the implementation of the 531 PV New Deal, no less than five listed companies have proposed to sell/sell related assets. The accumulated amount is nearly 5 billion yuan.
And this trend may accelerate over time. According to EnergyTrend, the new energy research center, the new policy will cause China's domestic demand to drop sharply to 29-35GW, and the global PV demand will fall below 100GW, which will put great pressure on the entire industry supply chain.
However, according to the statistics of the National Energy Administration, China's photovoltaic power generation installed 53.06GW last year, an increase of 18.52GW, a growth rate of 53.62%; cumulative installed capacity reached 130.25GW, ranking first in the world. Therefore, under the influence of the New Deal, the production capacity in 2018 will be reduced by nearly half.
What is worrying is that the expansion of production in the first two months of 2018 has continued unabated, and photovoltaic companies with polysilicon, silicon wafers, cell chips and modules are expanding. There were 26 projects to expand production in 2017. Before the introduction of the 531 New Deal this year, there were already more than a dozen known expansion projects, and the momentum of expansion was fierce.
The imbalance between supply and demand triggered by policy directly led to industry panic.
The so-called 531 New Deal actually originated from the release of the "Notice on Matters Related to Photovoltaic Power Generation in 2018" jointly issued by the National Development and Reform Commission, the Ministry of Finance and the National Energy Administration on June 1. Because the document was filed on May 31, it was called the 531 New Deal.
The notice emphasizes rationally grasping the pace of development, optimizing the scale of new construction of photovoltaic power generation, speeding up subsidies for photovoltaic power generation, reducing subsidy intensity, improving photovoltaic power generation price mechanism, giving play to the decisive role of market allocation resources, and further strengthening market-oriented allocation projects. This has greatly affected the development of the photovoltaic industry and corporate profits.
In the known single crystal expansion plan, Xingxin Ningxia has 1GW high-efficiency single crystal, Beijing Yuntong Ningxia 2GW single crystal, Artes Baotou 2GW single crystal, Central Inner Mongolia 15GW (the company's total production capacity is about 23GW), Jingke Energy Xinjiang 4-5GW, Jingao Solar 3-4GW and other single crystal projects will be put into production, plus Longji's monocrystalline silicon wafer production capacity of 25GW, single crystal module production capacity of 12GW, is expected to reach 60GW at the end of 2018, will be the end of 2016 4 times.
In terms of polycrystalline, the projects planned to be invested/expanded in 2018 include Beijing Yuntong Ningxia's expansion of 3GW, Rongdeyang's expansion of 3GW, Tongwei's Baotou, Leshan supporting 4GW, CEC Sun's expansion of 2GW, and CSG's Yichang expansion. Production of 2GW, Artes Baotou expansion of 3GW, a total expansion of 17GW, domestic multi-crystal module production capacity will exceed 70GW.
Go ahead
Beijing Yuntong (601908.SH), which has expanded production plans in the field of single crystal and polycrystalline, recently released a semi-annual report. It shows that the company's new material business capacity migration is still in progress, the business scale has shrunk, and the operating income during the reporting period was 37,589,300 yuan, down 46.00% from the same period of last year.
Although the new materials business accounts for a relatively small proportion in the business layout, Beijing Express still warns: the prices of monocrystalline silicon wafers and polycrystalline silicon wafers have declined in different degrees since the beginning of 2018, and the prices of raw materials for silicon crystal products have also fluctuated. The cost of power station construction downstream of the photovoltaic industry is also declining year by year. The overall market adjustments and changes will affect the business decisions of the company's new materials division, high-end equipment division, and new energy power generation division.
In addition, Beijing Express has inevitably talked about the negative effects that policies may have on the company's operations: the new energy power generation business is one of the company's four main businesses, and accounts for a large proportion of the company's overall operating income and profits. The industry policy is highly dependent. The subsidy policy adjustment on the photovoltaic power generation industry on May 31 this year has had a certain impact on the company's photovoltaic power generation business. The reduction in government subsidies will result in a decline in revenue from new power plants. Although it has no impact on the company's already completed power station projects, it may reduce the growth rate of future installed capacity of the company's photovoltaic power generation business.
Jingsheng Electromechanical (300316.SZ) also released a semi-annual report in the same period. The company achieved revenue of 1.244 billion yuan in the first half of the year, up 53.79% year-on-year; net profit of 285 million yuan, a year-on-year increase of 101.2%. However, it is worth noting that in the main business composition as of the end of 2017, the proportion of crystalline silicon growth equipment was 80.68%, and in 2016 this figure was 61.86%. The increase in the proportion of this part of the main business is inextricably linked to the "blowout" of the photovoltaic industry.
Through the holding of the hands of the ring shares (002129.SZ), GCL-Poly (03800.HK) and other major customers, Jingsheng Electromechanical's main business is also gaining hidden worries while gaining growth. With the acceleration of industry de-capacity triggered by the 531 New Deal, the shrinking demand for new downstream equipment will become a high probability event.
Jingsheng Electromechanical Semi-annual Report showed that the net cash flow from current operating activities was -153 million yuan. This figure was -0.72 billion yuan in the same period last year.
As a single crystal faucet, the market position of Longji (601012.SH) is destined to become a hot spot after the 531 New Deal. Its technical route and market selection have become the vane of the industry.
According to the mid-year report, Longji's operating income in the first half of the year was 10.02 billion yuan, up 59.36% year-on-year; the net profit attributable to the parent company was 1.307 billion yuan, up 5.73% year-on-year, which was a significant decrease from the year-on-year increase of 43.6% in the same period of 2016. narrow.
Liu Xiaodong, the secretary of Longji shares, said recently that the content of the New Deal is mainly to encourage technological progress and promote the landing of affordable Internet projects, which is consistent with the future development direction of the industry itself. From this perspective, the New Deal will further promote the company's investment in technology, thereby reducing costs and promoting solar power to achieve parity online. This has enabled companies to shift their focus to the market and put more energy into the field of technology research and development. He believes that overseas emerging markets in the future will be an important direction for the development of the photovoltaic industry.
The voice of Longji shares also indicates that the industry will usher in a cheaper Internet. The single crystal technology route and overseas new markets will become the collective consensus of the industry.
Companies that occupy these two attributes may still have a promising future. Prior to this, the price hike brought by industrial panic is inevitable, but at the same time, the relevant assets of the capital market may become a trading ground.
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