Introduction: "Micro-innovation" and elastic adjustment of the production line, depending on how LONGi balances.
01 Continuous optimization of the organization
The Spring Festival has passed, but the cold winter of PV continues.
According to news from the industrial chain, LONGi Green Energy (601012SH) continued to optimize in the new year, involving functional departments such as finance, R&D, human resources and some middle management.
With the continuous development of intelligent and digital manufacturing technologies, 200-300 people are currently needed for cell production per 1GW, and the number of workers per 1GW module production has dropped from 1,000 to less than 200, and the number of workers per 1GW silicon wafer production line is less than 100.
Compared with LONGi, JA Solar (002459., which is also an integrated photovoltaic companySZ), about 330,000 people, Trina Solar (688599SH) has more than 40,000 people.
Previously, the number of LONGi employees was as high as 840,000 people. Even though LONGi's wafer production capacity is more than twice that of JA Solar, the disadvantages of personnel organization are still prominent after deducting LONGi's more than 4,000 R&D personnel.
In particular, the production capacity of BC batteries needs to be released, and P-type batteries usher in a wave of elimination. If key indicators such as human efficiency lag behind, the reduction and optimization of P-type production lines are inevitable, so the optimization of personnel structure will become an inevitable choice.
From the perspective of Longji's "optimization" action, it is also a continuation of the previous "** strategy".
In the fourth quarter of last year, the proportion of n-type products in the bidding of central enterprises gradually increased, and the rise of 210 large-size products, LONGi, which is known for its P-type production capacity, started personnel optimization in advance. In the optimization process, expatriate workers and management trainees were the first to be affected, especially in the wafer division.
In November last year, according to the "Eye of the Storm" report of Phoenix.com, LONGi launched a personnel optimization plan. In an internal email, it was mentioned that for school admissions, fresh graduates and new employees who have not been regularized, it is necessary to "quickly identify and quickly eliminate", and the identification criteria are mainly that the person is "not costly, worthless". It is speculated that the contraction of the two bases of Xi'an Gaoling Battery Factory and Xixian Battery Factory under the Shaanxi industrial cluster is the direct reason for this personnel optimization.
In response to the optimization problem, a person from the secretary office of the board of directors of LONGi Green Energy once responded: "Generally speaking, at the end of each year, we will do some normal organizational optimization according to the annual performance appraisal and the changes in the entire market, which are normal situations. ”
At that time, the market for photovoltaic modules was still around 1 yuan. Recently, the winning bid price of n-type modules has reached 09 yuan watts. At present, the tax-included cost of n-type modules is 0About 91 yuan (excluding freight), P type is 0About 85 yuan.
The entire industry sells modules at the expense of cash flow, and some small factories give 07 yuan watts or so**.
The faucet is also difficult to resist the strong cycle attribute of photovoltaics, which is inevitable. A senior LONGi employee interviewed by Phoenix.com's "Eye of the Storm" mentioned that LONGi will flexibly adjust production capacity. Once the planned production capacity cannot be opened within the expected period of time, it will be adjusted and optimized.
Different from the fourth quarter of the year, the optimization focus of LONGi Green Energy this time has shifted to management posts. With the expansion of the company's scale, the disease of large enterprises has gradually emerged, and the efficiency problem of the middle level has become the focus of this adjustment.
As a large company, LONGi has indeed been quite generous in terms of employee benefits and business trip treatment in the past.
And in the end, these create unbearable costs in the cold winter. This time, LONGi has taken a strong medicine, and the disease of a large company is **, which shows its resolute attitude to improve the efficiency of internal operations.
Most companies choose to save a lot of year-end bonuses after the Spring Festival holiday, and they have not touched everyone's "mold" before the holiday.
In January this year, former McKinsey senior partner Zhang Haimeng joined LONGi Green Energy.
Zhang Haimeng joined the time, before the decision to lay off employees, there may be another layer of deep meaning - according to the past actions of large companies to invite McKinsey executives, it is often the introduction of external executives as an "external brain" knife to operate on their own companies. This approach also avoids conflicts of interest within the original management.
02 Focus on "micro-innovation".
Zhang Haimeng's addition may also be related to the structural adjustment of the brand management department.
The brand management department of LONGi Green Energy was directly transferred from the President's Office to the Strategic Management Center in charge of Zhang Haimeng. Previously, the head of the brand management department of LONGi Green Energy was Huo Yan, whose external title was General Manager of LONGi Green Energy's global brand, and he was also the head of LONGi's global distributed market.
After the structure is updated, the head of the brand management department is concurrently served by Xie Tian, general manager of the strategic management center. Huo Yan became the head of strategic marketing of the distributed business group, specializing in distributed market brand marketing.
It can be inferred from the organizational structure change of LONGi's brand management that LONGi, which is fast and fast, will respond to the photovoltaic winter with the strategy of re-branding and micro-innovation.
LONGi regards the brand as its trump card, focusing on building the Hi-Mo X6 series of "family" products, aiming to continuously innovate for customer application scenarios and provide cost-effective products and high value-added services.
On February 29, LONGi released the first dual-glass module based on HPBC technology, the Hi-MO X6 double-glass moisture-resistant thermal photovoltaic module. The module is mainly used in photovoltaic application scenarios in high temperature and high humidity environments, and is used for the selection of distributed roofs such as cement roofs, photovoltaic carports, and sun rooms.
In fact, as early as October last year, LONGi released the industry's "king of single glass" Hi-Mo X6 anti-ash accumulation module, which focuses on anti-ash and snow accumulation functions.
The use of Hi-MO X6 double-glass moisture and heat resistant modules on cement roofs and damp heat scenes, and Hi-MO X6 anti-ash modules on industrial and commercial roofs is a distributed full-scenario application model advocated by LONGi.
So far, LONGi has formed a series of "family" products of Hi-MO X6, Hi-MO X6 anti-ash modules, and Hi-MO X6 double-glass damp and heat-resistant modules in distributed scenarios to meet the reliability requirements of most distributed scenarios in China for the reliability of photovoltaic power plants.
LONGi Green Energy, which once relied on core technologies to break through the boundaries of expansion, now seems to have a new direction: technology is important, but "micro-innovation" to develop brand power and meet the diverse needs of customers is also a selling point.
In LONGi's brand positioning of "steady, reliable, and technology-led", "steady" is placed in front of "technology", which is self-evident.
Zhong Baoshen believes that customers' demand for photovoltaic products is not only the basic demands such as efficiency, cost and reliability, but also more subtle and differentiated characteristics.
For example, Japanese customers complained that "the components are so big, our house is so small, there is no way to use it", and the customer also put forward requirements for aesthetics, installation solutions, and intergenerational product adaptability.
In the end, it is not the basic function that reflects the value of the product, but other functions and features.
It is not easy for photovoltaic products to adapt to various environmental conditions and meet the diverse needs of different scenarios. In this regard, there should be something to be done.
03 Do something, do something
*Emphasizing brand "micro-innovation" and flexible adjustment of production lines depends on how LONGi balances.
According to sources, a number of LONGi's BC production lines in Shaanxi are undergoing technical transformation to 182*19x (i.e., 191-199) mm rectangular silicon wafers. If one day a large order rolls in, LONGi itself is too busy, and finding a foundry is also under consideration - this is LONGi's "semi-sleep" or maybe it is a dormant strategy of taoguang and waiting for spring warmth.
You must know that this round of PV cycle is completely different from the previous three rounds. In the past, there was overcapacity, and once the market demand accelerated, it was possible to quickly digest the mountains of inventory.
But this time it's different. With waves of investors pouring into the PV sector, although PV downstream demand is expected to grow by 20% this year, the expansion of production capacity is even more alarming, almost a surplus of the entire industry chain.
When everyone thinks they are smart people who see business opportunities, the market will soon be "saturated".
LONGi TOPCon has a production capacity of only 30GW, and BC products have a production capacity of 35GW. It would be wise not to expand blindly now.
Although LONGi has not yet released its 2023 annual report, it compares with wafer companies that have already announced financial reports, such as TCL Zhonghuan (002129SZ) and Hongyuan Green Energy (603185SH), which can give a glimpse of LONGi's performance under pressure in the fourth quarter and even the first quarter of this year.
Even though TCL Zhonghuan suffered serious losses in the fourth quarter of last year, it still has a chance to turn around in the first quarter of this year with the high operating rate of N-type silicon wafers. However, there are many industry insiders** that LONGi's performance in the first quarter is not optimistic, and the possibility of loss is extremely high.
Zhong Baoshen has mentioned that the companies that usually lag behind in the technology knockout competition are those that invested too heavily in technology in the previous round and could not afford to invest more in new technologies after capacity growth.
LONGi has clearly seen the future, that is, the huge PERC production capacity will face the fate of obsolescence.
If the ** of the distributed component is higher than 15 yuan W, LONGi's BC battery sales may be good. At present, there is overcapacity, and the module** continues to be below 1 yuan, and the p-type module is even below 0With a jumping price of 8 yuan, even the distributed products vigorously promoted by LONGi in 2023, the shipment volume will only be 7 GW -8GW - such sales are far from enough to support the U-turn of this giant ship.
But slowing down the pace and "hibernating" does not mean that LONGi has not done anything. On the contrary, LONGi has been cautious but high-intensity in R&D.
Zhong Baoshen once mentioned in an interview that LONGi has a basic principle, that is, the investment in fixed assets cannot be higher than the net assets, which is a rule set more than ten years ago. LONGi has also repeatedly emphasized that LONGi will release TOPCon products in 2021, but believes that TOPCon is only a transitional route and has no investment.
In the past five years, LONGi has invested 18 billion yuan in R&D, and has continued to break world records in both crystalline silicon single-junction technology and crystalline silicon-perovskite tandem technology.
LONGi is full of confidence in BC technology and believes that "whether it is BC, PERC, TOPCON or HJT, if we want to further improve efficiency in the future, we must move towards BC technology".
The process is extremely complex, making it a luxury choice for PV products, especially when it comes to cost reduction. At this stage, LONGi's goal is to build the BC technology platform first, initially realize its potential, and then gradually reduce costs and increase efficiency.
In the cold winter of increasingly difficult financing, there has been a list of "companies facing death" in the photovoltaic industry, and companies ranked 11-20 are very dangerous. PV companies waiting to be listed are likely to declare bankruptcy at the end of the second quarter of this year if they fail to successfully IPO.
However, compared with other companies that may face extinction, LONGi Green Energy is still the PV company with the most abundant cash flow. As long as it can survive this winter, LONGi is still expected to take the lead when the next PV cycle comes.