It is planned to invest 11.8 billion yuan in the silicon material project, but Wuxi Shangji Automation Co.Ltd(603185) only has 956 million yuan on the book, and there is still a capital gap in many raised investment projects.
After hours today, Wuxi Shangji Automation Co.Ltd(603185) announced the change of share price. The daily closing price of the company’s share price deviated by more than 20% in three consecutive trading days from February 23 to 25. On February 25, Wuxi Shangji Automation Co.Ltd(603185) closed at 158.81 yuan / share, up 7.89%, with a total market value of 43.71 billion yuan.
11.8 billion yuan invested in silicon material project
On the news, on February 25, Wuxi Shangji Automation Co.Ltd(603185) announced that it plans to invest in the construction of 150000 tons of high-purity industrial silicon and 100000 tons of high-purity crystalline silicon projects with a total investment of 11.8 billion yuan.
The above project is located in Jinshan Industrial Park, Guyang County, Baotou City, Inner Mongolia Autonomous Region, and is expected to reach production in 2023. The project is divided into two phases. The first phase is designed to have a capacity of 80000 tons of high-purity industrial silicon and 50000 tons of high-purity crystalline silicon. The total investment of the project is expected to be 6 billion yuan. The second phase of the project will be promoted according to the market situation. In addition, Guyang county government provided Wuxi Shangji Automation Co.Ltd(603185) with a total of 3.8gw photovoltaic power plant index and 1.7gw wind power plant index, and the project was declared and implemented in batches.
High purity crystalline silicon and high purity industrial silicon are the raw materials for the production of monocrystalline silicon and high purity crystalline silicon respectively. Wuxi Shangji Automation Co.Ltd(603185) said that at present, the market supply of raw material polysilicon is relatively tight and the price increases greatly. However, the company’s monocrystalline silicon production capacity continues to expand. The existing monocrystalline silicon production capacity has reached 30GW, and the demand for raw materials gradually increases in the production process. This investment is conducive to the company to obtain new channels for stable supply of silicon materials and ensure the supply of raw materials; It is beneficial for the company to strengthen its advantages in raw material quality assurance, supply cycle and transportation cost, and ensure the safety and stability of production and operation; It is beneficial for the company to seize the development opportunity of silicon material market and further improve the company’s comprehensive competitiveness and profitability.
On the same day, Wuxi Shangji Automation Co.Ltd(603185) also disclosed another announcement that it would issue convertible bonds to raise 2.47 billion yuan for Baotou’s annual output of 10GW monocrystalline silicon crystal drawing and supporting production project. The total investment of the project was 3.5 billion yuan, with a capital difference of 1.03 billion yuan.
The grand layout upstream shows Wuxi Shangji Automation Co.Ltd(603185) ‘s expansion ambition. But beyond ambition, where does money come from?
According to the third quarterly report, by the end of the third quarter of 2021, Wuxi Shangji Automation Co.Ltd(603185) the monetary capital on the book was only 956 million yuan, and the notes payable and accounts payable were as high as 2.694 billion yuan. The company’s operating cash flow is even less optimistic. In the first three quarters of 2021, its operating cash flow was -305 million yuan, which was in the state of outflow, with a year-on-year decrease of 298%.
By the end of June 2021, Wuxi Shangji Automation Co.Ltd(603185) 2019 raised investment project 5GW monocrystalline silicon pull crystal production project (phase II) is far from the total investment of 655 million yuan, there is still a capital gap of 143 million yuan, and there is a difference of 859 million yuan in 2020 raised investment project 8GW monocrystalline silicon pull crystal production project. Under the huge capital gap, Wuxi Shangji Automation Co.Ltd(603185) sustainable financing ability needs to be tested. The reporter of the international finance news called and wrote to the company’s board secretary office. As of press time, no further reply has been received.
Transition photovoltaic upstream
Wuxi Shangji Automation Co.Ltd(603185) was founded in 2002 and landed on the Shanghai Stock Exchange in December 2018. It is located in Wuxi, Jiangsu Province. At the beginning of its establishment, Wuxi Shangji Automation Co.Ltd(603185) was mainly engaged in the R & D and production of precision machine tools. In 2004, it entered the photovoltaic track and became a manufacturer of photovoltaic special equipment, gradually developing into a leader in special processing equipment for high hard and brittle materials based on photovoltaic crystalline silicon.
In 2019, Wuxi Shangji Automation Co.Ltd(603185) will focus on the upstream of the industrial chain. In May, 2003, Wuxi Shangji Automation Co.Ltd(603185) signed an agreement with Baotou municipal government to invest 3 billion yuan to build a crystal drawing project with an annual output of 5GW monocrystalline silicon. At the same time, Hongyuan new material, a wholly-owned subsidiary, was established to focus on silicon rod and silicon wafer business. One month later, Wuxi Shangji Automation Co.Ltd(603185) decided to change the IPO raised investment project, terminate the expansion project of precision CNC machine tool production line and change it to Baotou 5GW monocrystalline silicon drawing production line project (phase I), which was once questioned by the outside world.
The effect of transformation is immediate. In 2019, the production and sales volume of Hongyuan new material monocrystalline silicon exceeded 1730 tons and 1600 tons respectively, and increased more than tenfold to 18700 tons and 18500 tons in 2020. The Wuxi Shangji Automation Co.Ltd(603185) revenue also increased sharply from 806 million yuan to 3.011 billion yuan, and the net profit increased from 185 million yuan to 531 million yuan. According to the 2020 annual report, Wuxi Shangji Automation Co.Ltd(603185) monocrystalline silicon business generated revenue of 2.73 billion yuan, accounting for 90.67% of the total revenue.
On February 16 this year, Wuxi Shangji Automation Co.Ltd(603185) released the performance express. In 2021, the company achieved a revenue of 10.906 billion yuan, a year-on-year increase of 262.22%, and the net profit attributable to the parent company was 1.859 billion yuan, a year-on-year increase of 203.33%. For the significant increase in performance, Wuxi Shangji Automation Co.Ltd(603185) said that in 2021, the company continued to expand the scale of monocrystalline silicon business as planned, the production capacity continued to improve, the capacity utilization rate and production and marketing rate remained at a high level, and the sales scale of monocrystalline silicon business continued to expand, which increased the sales revenue and promoted the steady increase of performance.
Interestingly, as soon as the investment news on February 25 came out, there was the argument that Wuxi Shangji Automation Co.Ltd(603185) “betrayed” granular silicon in the market. As early as the end of February last year, GCL poly revealed that it had signed a large order with Wuxi Shangji Automation Co.Ltd(603185) . Jiangsu Zhongneng, a wholly-owned subsidiary of the former, signed an agreement with Wuxi Shangji Automation Co.Ltd(603185) to cooperate on 300000 tons of granular silicon production and other projects, with a total investment expected to be 18 billion yuan.
Poly GCL is an advocate of granular silicon. Now Wuxi Shangji Automation Co.Ltd(603185) self built high-purity crystalline silicon and high-purity industrial silicon can not help but make the outside world daydream. On the morning of February 25, an investor asked Wuxi Shangji Automation Co.Ltd(603185) , “is the company’s investment in silicon material not optimistic about granular silicon?”, Wuxi Shangji Automation Co.Ltd(603185) replied that granular silicon is still one of the raw materials favored and valued by the company, and the invested granular silicon project is still under construction as planned. There is no change, and there is no situation that is not optimistic about granular silicon.
\u3000\u3000 Welcome the lifting of the ban
Wuxi Shangji Automation Co.Ltd(603185) is a typical family business. The actual controllers of the company are Yang Jianliang, Hang Hong, Yang Hao, Li Xiaodong and Dong Xixing. Yang Jianliang and Hang Hong are husband and wife, Yang Hao is their son, Li Xiaodong is Yang Jianliang’s brother-in-law, and Dong Xixing is Hang Hong’s brother-in-law. By the end of the third quarter of last year, Yang Jianliang and Hang Hong were the first and second largest shareholders, holding 36.72% and 16.04% respectively.
Yang Jianliang was born in 1969. In 1993, at the age of 24, Yang Jianliang contracted to operate the metalworking workshop of Wuxi Xuelang refrigeration equipment factory. He has been the factory director of Wuxi Liangyou machinery factory since the age of 29. In September 2002, Yang Jianliang and Hang Hong jointly funded the establishment of Wuxi Shangji grinder Co., Ltd., which is the predecessor of Wuxi Shangji Automation Co.Ltd(603185) .
After landing on the open market, the value of Yang Jianliang’s family soared. The issuing price of CNC in 2018 was 34.1 yuan / share, with a cumulative increase of 365.72% based on the latest market price of 158.81 yuan / share. On the Hurun rich list in 2021, the Yang Jianliang family ranked 132nd in China with a wealth of 47 billion yuan, surpassing the Hla Group Corp.Ltd(600398) Zhou Jianping family for the first time.
Wuxi Shangji Automation Co.Ltd(603185) may usher in shareholder reduction this year. On February 28, 2021, Wuxi Shangji Automation Co.Ltd(603185) 171 million initial restricted shares were lifted, involving 9 natural persons and 2 corporate shareholders, namely Yang Jianliang, Hang Hong, Zhao Yongming, Xu Gongming, Yang Hao, Li Xiaodong, Dong Xixing, Ji Fuhua, Yang Hongjuan, Hongyuan dingchuang and Juyuan investment. According to the latest closing price, the market value of the lifting of the ban is as high as 27.157 billion yuan. So far, the above shareholders have not announced the reduction plan.
