The “dead of winter” of photovoltaic is earlier than expected

Longi Solar third-quarter revenue and profit both fell, and JA Solar also fell short of expectations. The only exception was Jinko Solar, which bet on TOPCon.

The vicious competition among solar panels has been reflected in the reports.

When solar panel prices irrationally reach 1 yuan, it means that the entire industry chain will suffer comprehensive losses, and the industry will be reshuffled faster than imagined.

LONGi Solar Q3 revenue and net profit have been lower

The evening of October 30, LONGi released the 2023 third quarterly report, the first three quarters of revenue of 94.1 billion yuan, increase of 8.55%; mother net profit of 11.694 billion yuan, increase of 6.54%. Q3 single quarter revenue of 29.448 billion yuan, year-on-year decline of 18.92%; mother net profit of 2.515 billion yuan, year-on-year decline of 44.05%, compared to a decline of 54.6%. Far below market expectations.

 

It can be seen from the income statement that there are many factors responsible for Longi Solar lower-than-expected performance. In terms of revenue, Q3 revenue was 29.448 billion yuan, Q2 revenue was 36.334 yuan, 19% decrease from the previous quarter. In addition to the decline in revenue, period expenses also increased. Q3 sales expenses were 735 million yuan,increase of 900 million yuan from Q2, and Q3 administrative expenses were 1.568 billion yuan,increase of 300 million compared with Q2, and Q3 R&D expenses were 637 million, increase of 100 million compared with Q2. In addition, compared with Q2, silicon material investment income in the third quarter decreased by 800-900 million. Therefore, in summary, the net profit attributable to the parent company in Q3 for the single quarter was 2.515 billion yuan, decrease of 3 billion yuan compared with Q2.

In terms of business composition, LONGi modules account for about 66% and silicon wafers account for about 30%. However, module prices have continued to fall this year and have now fallen below 1 yuan/W. Under such a downward trend, LONGi’s module revenue and profits have been affected. This is expected, because it is difficult to buck the trend in performance. Silicon wafer Q3 is expected to ship 30GW, with a profit per watt of 4-6 points; battery module shipments are 18-19GW, with a profit per watt of about 0.11 yuan. Both shipment volume and profitability per watt are weak. The weak profit of silicon wafers is due to three factors: Silicon material prices continued to rebound in the quarter, while silicon wafer prices fell.

Jinko Solar performance beats other leaders

Overcapacity of silicon wafers and modules is a common dilemma that the photovoltaic industry needs to face, and it is not unique to LONGi. Therefore, The author statistics the third-quarter performance of  Trina Solar, Jinko Solar, and JA Solar, and analyzes the reasons behind the performance differences.

1.Trina Solar

Trina Solar, another leader in components, showed different situation in its third quarter report compared with Longi and Zhonghuan. Trina Solar’s revenue in the first three quarters was 81.1 billion, year-on-year increase of 39.38%. Net profit attributable to parent companies was 5.077 billion yuan, year-on-year increase of 111.34%. Q3 single-quarter revenue was 31.736 billion, year-on-year increase of 41.25%; net profit attributable to the parent company was 1.537 billion, year-on-year increase of 35.67%, and month-on-month decrease of 13.27%.

Trina Solar’s business is mainly components, accounting for 69%. The main business structure is similar to that of LONGi. Whether it is the overall revenue growth rate in the first three quarters or the single-quarter growth rate, Trina’s performance seems to be better than LONGi. This is actually It is also related to the fact that these two years have been the dividend years for TOPCon to increase its volume. Although LONGi and Trina both have multiple technical route layouts, LONGi is currently focusing on HPBC, while Trina’s mass production route is mainly based on N-type TOPCon components, so they will naturally enjoy more Lots of bonuses.

2.JA Solar

JA Solar components account for 96%, and its business is very pure. Revenue in the first three quarters of this year was 59.98 billion, year-on-year increase of 21.61%; net profit attributable to the parent company was 6.765 billion, year-on-year increase of 105.62%. Q3 single-quarter revenue was 19.138 billion yuan, year-on-year decrease of 8.23%, and net profit attributable to the parent company was 1.951 billion yuan, year-on-year increase of 22.87%, and month-on-month decrease of 12.54%.

JA Solar’s performance is similar to that of LONGi. Both of them fell short of market expectations, with single-quarter revenue declining. However, what is better than LONGi is that although JA Solar’s net profit fell quarter-on-quarter, it still grew year-on-year, and its profitability is relatively better.

3. Jinko Solar

Compared with other component leaders, Jinko Solar third quarterly report has the best performance. The company’s revenue in the first three quarters was 85.097 billion yuan, year-on-year increase of 61.25%. Net profit attributable to parent companies was 6.354 billion yuan, year-on-year increase of 279.14%. Among them, Q3 achieved revenue of 31.472 billion yuan, year-on-year increase of 62.53%; net profit attributable to the parent company was 2.511 billion yuan, year-on-year increase of 225.79%, and month-on-month increase of 14.95%. The third-quarter performance of JinkoSolar, the leader in components, was far better than that of Longi and Trina. Although Trina’s single-quarter revenue and net profit also achieved year-on-year growth, its profits still declined compared with the second quarter, but Jinko’s profits were year-on-year. All continued to grow.

Then compare the shipment status of various component leaders:

LONGi expects module shipments in the first three quarters to be approximately 43.53GW, with a profit per watt of 0.11-0.13 yuan; JA Solar expects module shipments in the first three quarters to be 37.63GW, and Q3 shipments of 13.68GW, with a net profit per watt of approximately 0.14 yuan; Trina Solar’s former In the third quarter, module shipments are expected to be 45-46GW, and Q3 single-quarter shipments are 18.5GW, with a profit of 0.11 yuan per watt; JinkoSolar is expected to ship 52.2GW of modules in the first three quarters, of which TOPCon shipments account for 57%; Q3 single-quarter modules Shipments were 21GW, month-on-month increase of 60%. Currently, TOPCon’s profit per watt is 0.16-0.17 yuan.

In terms of shipment volume and unit price, JinkoSolar is the best performer among the module leaders. It is less affected by the continued decline in component prices. The core reason is that Jinko has been betting on TOPCon and is the biggest beneficiary of TOPCon dividends. Although module prices have dropped, TOPCon module premiums are still high, and Jinko’s TOPCon share is the highest among the leaders. Therefore, Jinko’s overall performance this year is better than other companies.

The vicious competition in components is far from over

The tragic third quarter reports of the leading photovoltaic module manufacturers reflect that the reality is crueler than imagined. The market believes that the cold winter of photovoltaic will not come so soon. The market believes that the leading photovoltaic modules can survive even if they continue to cut prices. In fact, the performance of the leading photovoltaic modules has reflected , price war, crazy vicious competition is just an act of killing one thousand enemies and damaging oneself eight hundred. At present, the price of components has fallen below 1 yuan, and the entire industry chain is not making money.

LONGi also stated at the third quarter performance briefing that it is difficult for companies with module prices of around 1 yuan to survive. Not only the leaders, but also the entire industry chain is difficult to make profits. There are unfinished photovoltaic projects in many places. However, when module prices will return to normal, unconfirmed.

Generally speaking, the author believes that due to the continued price reduction of components this year, the poor performance of the leading companies has been expected, but it still seems to come sooner than expected. Not only the component link, but Tongwei Co., Ltd.’s net profit in the third quarter fell by 68%, and the profit instantly fell back to the level of 2021. It can be seen that the photovoltaic industry is entering a cycle from growth faster than imagined. At present, the vicious competition in components has not yet ended, and prices have not yet bottomed out. In the future, companies can only stand out in the future by grasping the technical direction and taking advantage of the dividends.