With the disclosure of the annual report and the first quarterly report, the situation that "the upstream and downstream of the industrial chain are natural enemies" is incisively and vividly displayed in the photovoltaic field.
The sharp rise in the price of upstream silicon material has led to the continuous and significant increase in the performance of silicon material leaders Tongwei Co.Ltd(600438) ( Tongwei Co.Ltd(600438) . SH) and Xinjiang Daqo New Energy Co.Ltd(688303) ( Xinjiang Daqo New Energy Co.Ltd(688303) . SH); Several major component manufacturers Longi Green Energy Technology Co.Ltd(601012) ( Longi Green Energy Technology Co.Ltd(601012) . SH) and Jingke energy (688223. SH), which are in a high business cycle, performed disappointingly under the pressure of cost side, and only Trina Solar Co.Ltd(688599) ( Trina Solar Co.Ltd(688599) . SH) performed fairly well. The performance of upstream and downstream is both hot and cold.
But change will happen this year. With the price of silicon material gradually stabilizing, the days of "lying down to make money" in the upstream are gone forever. Who will benefit after the supply and demand of the industrial chain is balanced? What are the problems revealed in the financial reports of photovoltaic leading enterprises?
supply and demand inflection point approaching
Since most of the leading photovoltaic enterprises have realized photovoltaic integration, this paper mainly focuses on the upstream silicon end and downstream module end enterprises with the most prominent price contradiction in the industrial chain.
Silicon material leader Tongwei Co.Ltd(600438) 2021 revenue 63.49 billion yuan, an increase of 43.64%; The net profit attributable to the parent company was 8.208 billion yuan, a year-on-year increase of 128%; Over the same period, Xinjiang Daqo New Energy Co.Ltd(688303) revenue reached 10.832 billion yuan, a year-on-year increase of 132%; The net profit attributable to the parent company was 5.724 billion yuan, a year-on-year increase of 449%.
It is worth mentioning that the two companies rebounded rapidly in the first quarter of this year after their performance fell month on month in the fourth quarter Tongwei Co.Ltd(600438) 2021 fourth quarter revenue 16.791 billion yuan in a single quarter, an increase of 34%, down 33%; The net profit was 2.263 billion yuan, a year-on-year increase of 722% and a month on month decrease of 46%. In the first quarter of this year, Tongwei Co.Ltd(600438) revenue reached 24.685 billion yuan, up 389% year on year and 222% month on month; The net profit attributable to the parent company was 5.194 billion yuan, a year-on-year increase of 641% and a month on month increase of 245% Xinjiang Daqo New Energy Co.Ltd(688303) in the fourth quarter of last year and the first quarter of this year, the revenue was 2.527 billion yuan and 8.129 billion yuan respectively, with a year-on-year increase of 51.52% and 389% respectively, and a month-on-month decrease of 33.37% and an increase of 222%; In terms of net profit, it was 1.251 billion yuan and 4.312 billion yuan respectively in the two quarters, with a year-on-year increase of 129% and 641%, a month on month decrease of 46% and an increase of 245%.
The rapid rise in the price of silicon material has brought huge profits to the leading enterprises of silicon material. The price of polysilicon is expected to have doubled since the end of April / may 2020. As of April 25, the price of polysilicon material (primary material) was $38.82/kg, up only 5.2% this year, up 195% compared with the beginning of 2021, and the increase showed signs of narrowing. It should be pointed out that the expansion time of silicon material capacity is the longest in the whole photovoltaic industry, generally from 12 months to 18 months, while it generally takes about half a year from commencement to full production, so the rise cycle of silicon material price is long.
Silicon material capacity will be gradually released this year. According to incomplete statistics, in the first half of this year alone, Tongwei Co.Ltd(600438) and Daquan new energy will release a total of 135000 tons (nominal capacity) at full capacity. Throughout the year, the capacity of other leading silicon enterprises, including Asian silicon industry, will also be released successively. By the end of the year, the total nominal capacity of silicon is expected to exceed 1 million tons. Even considering the climbing period, the actual new capacity this year will reach 240000 tons, and the corresponding component capacity will be 290gw.
With the release of production capacity, the profit peak of silicon material enterprises has passed, and the price inflection point is coming Xinjiang Daqo New Energy Co.Ltd(688303) vice chairman Zhang Longgen said in March that the actual supply of silicon material industry this year should correspond to the level of 270gw to 280gw at the component end according to the company's calculation Trina Solar Co.Ltd(688599) management estimates that the demand side of components in the whole market is about 230gw to 250gw. In addition, Longi Green Energy Technology Co.Ltd(601012) management expects global component shipments to be 260gw to 270gw (inclusive ratio) this year. From this point of view, this year's silicon material supply will be greater than the demand side, and the price drop may be inevitable.
PV InfoLink also expects the price of silicon material to accelerate the decline this year. PV InfoLink said that the growth of silicon material capacity was stable, and the effective supply of silicon material in the first quarter of this year formed a deterministic growth. At present, it is observed that the new capacity planned by individual enterprises in the middle of the year also has the potential to be put into operation as planned. The industry's expectation of supply growth will have an impact on the price of silicon material.
On the whole, the situation of silicon material in short supply is about to break this year. While the price falls, it is bound to affect the profitability of leading enterprisesP align = "center" Image Source: interface news research department
profit inflection point
Once the situation of silicon material in short supply is broken, the component industry will benefit the most.
The three most concerned enterprises in the component industry are Longi Green Energy Technology Co.Ltd(601012) , Trina Solar Co.Ltd(688599) and Jingke energy. According to the ranking of global component suppliers' shipments in 2021 released by PV tech, Longi Green Energy Technology Co.Ltd(601012) , Trina Solar Co.Ltd(688599) and Jingke energy ranked first, second and fourth respectively, of which Jingke energy fell to fourth from second in 2020, and Trina Solar Co.Ltd(688599) rose to second from fourth.
Leading Longi Green Energy Technology Co.Ltd(601012) 2021 revenue 80.932 billion yuan, an increase of 48%; The net profit attributable to the parent company was 9.086 billion yuan, a year-on-year increase of only 6%; It is worth mentioning that the company's single quarter revenue in the fourth quarter of 2021 was 24.7 billion yuan, a year-on-year increase of 19%; The net profit was 1.53 billion yuan, a year-on-year decrease of 30%.
Longi Green Energy Technology Co.Ltd(601012) the performance rebounded in the first quarter of this year, with a revenue of 18.6 billion yuan, a year-on-year increase of 17%; The net profit attributable to the parent company was 2.664 billion yuan, a year-on-year increase of 6%.
Subject to the sharp rise in the price of upstream silicon materials and the surge in international logistics costs (the sharp rise in shipping prices), Longi Green Energy Technology Co.Ltd(601012) gross profit margin continued to decline, from 24.62% in 2020 to 21.29% in the first quarter of this year. In order to maintain a certain profit margin, the company has been cautious in issuing orders in recent half a year, and adjusted the commencement, which has affected the revenue.
As it is in the critical period of IPO (the meeting was held at the end of September last year), Jingke energy showed a trend of stabilizing before and increasing after. In 2021, the company's revenue was 40.57 billion yuan, a year-on-year increase of 21%; The net profit attributable to the parent company was 1.141 billion yuan, a year-on-year increase of 9.59%.
It is worth mentioning that the company achieved revenue of 16.296 billion yuan and 14.681 billion yuan in the fourth quarter of 2021 and the first quarter of this year respectively, with a year-on-year increase of 70% and 86.42%; The attributable net profit was 420 million yuan and 401 million yuan, with a year-on-year increase of 46% and 66%.
Due to the rapid rise of silicon material price in 2021, the profit space of the most downstream component manufacturers is compressed to a certain extent. In order to stabilize the performance, Jingke energy strategically reduced the acquisition and execution of low-cost component orders, negotiated with customers for low-cost orders, extended the delivery time, and increased the external sales of silicon and battery chips according to the market supply and demand and price.
Trina Solar Co.Ltd(688599) is growing rapidly. In 2021, the company's revenue was 44.48 billion yuan, a year-on-year increase of 51%; The net profit attributable to the parent company was 1.804 billion yuan, a year-on-year increase of 47%. In the fourth quarter of 2021, the company's revenue in a single quarter was 13.216 billion yuan, a year-on-year increase of 39%; The net profit was 648 million yuan, a year-on-year increase of 63%. In the first quarter of this year, Trina Solar Co.Ltd(688599) made persistent efforts to achieve a revenue of 15.273 billion yuan, a year-on-year increase of 79%; The net profit attributable to the parent company was 543 million yuan, a year-on-year increase of 136%. Excellent performance is also the main reason to help the company improve its ranking.
Considering the negative impact of the high silicon price on the whole photovoltaic industry, the supply and demand inflection point will appear this year, and the module manufacturers are the biggest beneficiaries of the decline in silicon price. Faced with the high short-term price of silicon materials, Longi Green Energy Technology Co.Ltd(601012) said that there is no new investment plan in silicon materials, which also shows its view on the future of the market to a certain extent.
For the photovoltaic industry chain, the contradiction between supply and demand of upstream silicon is not a long-term contradiction, which belongs to periodic mismatch. With the continuous release of supply side capacity, price decline is a deterministic event. The component manufacturers whose profit side has fallen into the bottom are expected to usher in a dilemma reversal.
