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Text |Huaxia Energy Network.With the advent of the industry's winter, more and more PV projects have been forced to postpone.
Taking the silicon wafer project as an example, at the end of December 2023, Jingyuntong (SH:601908) announced that the company intends to postpone the estimated production time of the raised funds investment project "Leshan 22GW high-efficiency monocrystalline silicon rod and slice project" to December 2024. The project was originally planned to be fully operational by December 2023, but it was delayed by a full year.
Regarding the reason for the postponement, Jingyuntong said: "The market environment of the domestic photovoltaic industry has changed greatly. In 2023, the market competition in the silicon wafer sector will intensify, and the product will fluctuate greatly. Considering the impact of the fundraising project on the overall operation and development of the company, the company adjusts the implementation progress of the fundraising project according to the actual situation of the market and the company. ”
According to incomplete statistics from Huaxia Energy Network, since the second half of last year, photovoltaic projects of many well-known enterprises such as Daqo Energy (SH: 688303), Hesheng Silicon (SH: 603260), Oujing Technology (SZ: 001269), EGing Optoelectronics (SH: 600537), Jingshan Light Machine (SZ: 000821) and other well-known enterprises have announced the postponement, almost covering the upstream and downstream links of the industrial chain.
Obviously, the industry adjustment cycle is coming, and photovoltaic companies have taken the initiative to adjust the pace of projects. This may be just the beginning, in the cold winter of PV, some projects have been postponed several times and eventually "unfinished" abound. In 2024, the photovoltaic industry will go to the first place, will it repeat the mistakes of history?
Since the second half of 2023, the postponed projects in the polysilicon sector have successively involved companies such as Daqo Energy, Hesheng Silicon, and Oujing Technology. Among them, Daqo Energy's Baotou Phase II 100,000-ton high-purity polysilicon project has been postponed for half a year to the second quarter of 2024Inner Mongolia Oujing Technology's "Recycling Industrial Silicon Project" has been postponed by one year to December 31, 2024.
The 200,000-tonne polysilicon project of Halcyon Silicon, another polysilicon leader, was originally scheduled to start production in the third quarter of 2023, but by September, the latest news of production was still "commissioned".Until the end of December, at a recent shareholders' meeting, relevant sources in Hesheng Silicon revealed that "it will be put into operation in four phases".
In addition to the above three polysilicon companies, the polysilicon project of Runyang, an integrated cell company whose IPO application has been approved, has also disappeared. According to local ** reports, Runyang Co., Ltd. has laid out a polysilicon project with a total investment of 8 billion yuan and a scale of 80,000 tons in Ordos, which will start construction in January 2023 and is scheduled to be put into operation in October of the same year. However, neither the 80,000-ton polysilicon project was mentioned in the "Prospectus" (declaration draft) in March 2023 or the "Prospectus" (previous draft) in October 2023.
In the cell sector, EGing's high-efficiency N-type TOPCon photovoltaic cell project in Chuzhou, a veteran photovoltaic manufacturer, has a scale of 10GW in external publicity, but only 500MW has actually been put into production. At the beginning of November 2023, the Ningbo Securities Regulatory Bureau of the China Securities Regulatory Commission issued a "Warning Letter" to EGing Optoelectronics. According to EGing's third quarter report for 2023, the effective production capacity of the project at that time was 3GW.
The phenomenon of project delays has also spread to photovoltaic equipment companies.
On December 13, 2023, Jingshan Light Machinery announced that it would extend the scheduled usable status date of the 2020 non-public issuance ** fund-raising project "Core Equipment R&D Project for the Preparation of Heterojunction and Perovskite Tandem Cells" to June 30, 2024.
Judging from the public information, the current number of postponed projects has a further trend. Lv Jinbiao, deputy director of the silicon industry expert group of the China Nonferrous Metals Industry Association, said in an interview with Huaxia Energy Network: "This is mainly affected by the overall overcapacity. ”
Previously, everyone's expectations for market demand were too high, and they were trying their best to expand production and grab share, resulting in 'more wolves and less meat', and the market was not enough. Lv Jinbiao said.
The statistics of the China Photovoltaic Industry Association are more convincing - in 2023, the supply-side production capacity of the photovoltaic industry will be 1003GW, while the market demand will be about 550GW, and the production capacity scale has nearly doubled the market demand.
Regarding the current situation of the module sector, Lv Jinbiao revealed, "In fact, the surplus of the module segment is the most serious. However, there are no delayed projects in module manufacturing for the time being, mainly because there are many large and small module enterprises, and the first chain is suspended when there is overcapacity. The result of the surplus is mainly reflected in the insufficient capacity utilization, which is expected to be no more than 540GW of module production for the whole year, and the utilization rate is only 50%. ”
In contrast, the capacity utilization rate of polysilicon and wafer industries is around 80%. Although the battery side has a new production capacity of 300GW-400GW, due to the upgrading of PERC production capacity by TOPCON, the surplus is the lightest in the entire industrial chain.
Overcapacity has led to a wave of price reductions in all links of the PV industry chain in 2023. Among them, polysilicon** fell the most, more than 70% (75%), which can be called a "knee cut".Silicon wafers, cells, and modules are also around 50%)
The wave of price cuts has stepped on the "brakes" for the photovoltaic industry, especially for those companies that are blindfolded and run to make quick money. Today, the harsh market realities have changed the expectations of many businesses.
In the past, everyone was in a hurry to put into production and desperately rush to work, but now that the first is low, it is meaningless to put into production at this time. Lv Jinbiao told Huaxia Energy Network, "In the upstream link of polysilicon, after the new project starts, it will need to go through a 3-6 month ramp-up period. During this period, the cost of polysilicon produced will be relatively high, and it will take a process to steadily improve the quality of products. So some projects simply choose to push it back. ”
From the perspective of photovoltaic enterprise operation, under the overcapacity and first-class war, the revenue and profits of some enterprises have declined sharply, and the debt pressure has become increasingly prominent.
In the first three quarters, the net profit attributable to the parent company of Daqo Energy and Hesheng Silicon fell by 66% and 52% year-on-year respectively, with the third quarter falling by 90% and 60% respectively. Performance pressure has caused Daqo Energy's personnel turmoil in 2023, with three executives resigning one after another, and even the general manager has been replaced (related reading: "The annual salary of 6 million is also leaving!".Why is there a wave of executive resignations in PV?》）
The net profit of the above-mentioned silicon wafer company Jingyuntong also fell by more than 50% year-on-year in the first three quarters. Its single-quarter revenue and net profit both declined in the third quarter, down 20. year-on-year, respectively15%、 30.57%。
At present, high debt of photovoltaic enterprises has become a common phenomenon. According to industry statistics, as of the end of September 2023, the total debt scale of 118 photovoltaic companies is as high as 176 trillion yuan. There are 24 companies with an asset-liability ratio of more than 70%, and four companies with an asset-liability ratio of more than 90%.
From the perspective of total liabilities, the total liabilities of Hesheng Silicon Industry are 4393.9 billion yuan, the total debt of Jingyuntong is 121600 million yuan, the total debt of Jingshan Light Machine is 1213.5 billion yuan, Daqo Energy, which has the lowest asset-liability ratio, also has 67$4.8 billion in liabilities.
Runyang shares are also very representative, its asset-liability ratio in the three years from 2020 to 2022 is above 75%, and by the first quarter of 2023, the company's net cash flow from operating activities has also turned from positive to negative, at -109.5 billion yuan.
Among the companies that reported that the project was postponed, only Oujing Technology's performance was acceptable, with revenue growth of 147 in the first three quarters76% to 232.6 billion yuan, net profit attributable to the parent increased by 28059% to 58.8 billion yuan. This is mainly due to its main business of quartz crucibles and silicon material cleaning, which is a small degree of "involution" of auxiliary industrial chain business.
When the industry is in an upward cycle, the performance is supported, and financing is very convenient, even if the debt is high, it is not afraid. But when the industry is sluggish and performance has fallen sharply, debt pressure has become prominent. In such an environment, the project extension can help enterprises reduce debt pressure, shift from expansion to rational contraction, preserve strength, and store grain for the winter.
The current performance and debt pressures faced by PV companies are reminiscent of the industry cycle in 2012.
At that time, a large number of photovoltaic companies had suffered from radical expansion, and the total debt of 11 listed companies in the United States was nearly 150 billion US dollars. At that time, Wuxi Suntech, which was incomparably beautiful, had a debt of 35US$7.5 billion, with an asset-liability ratio of 818%, which is a very typical representative of high-debt expansion. With the advent of the "double anti-dumping" policy in Europe and the United States, and with the rupture of the capital chain, more than 350 photovoltaic companies, including Wuxi Suntech, fell to the ground and never got up again.
Now, the photovoltaic industry has once again fallen into the ice hole of surplus, will this time repeat the mistakes of 2012, and a large number of projects will be "unfinished"?
In this regard, Lu Jinbiao believes: "The current situation is different from 2012, and the two cycles are not comparable. He told Huaxia Energy Network that during the last round of crisis, the scale of the photovoltaic market was still very small, unable to withstand fluctuations, and major companies were listed in the United States, and the financing ability was very poor. Now the total photovoltaic market has been large enough, the anti-risk ability of major enterprises has also been enhanced, and photovoltaic companies have returned to A-shares, under the concept of "double carbon", the new energy industry is very sought after, and the financing ability is also very strong, and the voice of new energy will be more and more powerful in the future.
From the perspective of the global energy structure, the proportion of new energy is still very low, and there is still a lot of room for growth in the future. Lv Jinbiao said.
So, looking forward to the future, when will photovoltaic products stop falling and rebound?When will the industry get out of the trough?
JA Solar, a leading company in the industry, made a statement on the development of the industry in November 2023: in half a year to a year, second- and third-tier enterprises have to reduce production, stop production, or even withdraw from the industry, especially around the Spring Festival. Therefore, the planned new production capacity may be slowed down, suspended, or even canceled, so that the market competition pattern in the second half of next year (2024) is likely to improve.
According to Lv Jinbiao's judgment, "by the second quarter of 2024, the photovoltaic industry is expected to come out of the trough." ”
He said that on the one hand, the current module ** has fallen to a very low level, which will stimulate the growth of the downstream installed capacity market, which will generally enter the peak installation season in the second quarter of each year, when more inventory will be digestedOn the other hand, it is also related to the fact that the industry has entered the off-season at the end of the year, and the enterprises have reduced production and cleared inventory in a timely manner.
Lv Jinbiao also said that the current polysilicon inventory in the industry "does not exceed 100,000 tons, which is still within the normal range". The key is that there are still 1.5 million tons of projects under construction, and new projects will be delayed in 2024 to increase load, and existing projects will also stop production lines with higher costs according to seasonal demand, and the overall capacity utilization rate of the industry will be reduced to less than 80%.