May 15, 2019 Source: China Energy News

On the last day of May last year, the new PV strategy was born, shocking the entire industry. After a year, how is the development of PV companies?

As of April 30, the disclosure of the annual report of listed companies was basically completed, and many PV listed companies also handed over the 2018 transcripts. The reporter sorted out 44 listed companies related to the PV industry, such as Xinte Energy, Hengxing Energy, Beijing Express and Longji, to see what they experienced last year.

Net profit growth slowed down significantly

According to the statistics of the 44 listed companies in the photovoltaic industry, from the perspective of operating income, the revenue of 26 companies increased compared with the previous reporting period, accounting for 59.1%. The operating income of Tongwei, Zhengtai Electric and Jingke Energy ranked in the forefront of listed companies, reaching RMB 27.535 billion, RMB 27.421 billion and RMB 25.04 billion respectively.

Among them, Zhengtai Electric began to actively adjust at the beginning of 2018, and strive to stabilize the household PV in the customer market, optimize the structure and layout of the existing power station – sell part of the equity of the centralized power station in the power-limited areas of Gansu and Ningxia, and in Jiangsu, Anhui and Zhejiang. In addition, the region acquired 17 power stations, etc., and its main business volume and quality grew against the trend. The EPC development volume was 661 MW, and the distributed development volume was 974 MW, both hitting record highs. The new energy business achieved revenue growth of 18.66% year-on-year, and the total revenue growth rate remained at a high level, up 17.1% year-on-year.

In terms of net profit, except for the six companies including Weiwei, Stellar Technology and Ancai High-Tech, the remaining listed companies in the photovoltaic industry have achieved profitability. Among them, Baoli Association New Energy, Zhengtai Electric, Longji and other companies won the top spot, with net profit of 5.033 billion yuan, 3.592 billion yuan and 2.558 billion yuan respectively. It should not be overlooked that 13 companies such as Silver Star Energy and Muller New Materials have net profit of less than 200 million. Although the net profit of most companies is still growing year-on-year, the growth rate has slowed down significantly. Among the 23 companies with a year-on-year increase in net profit, more than half of the companies' net profit growth rate is within 20%.

According to the China-Thai Securities Research Report, the listed companies in the PV industry showed a sharp decline in net profit in 2018, and capital expenditures fell year-on-year. From the perspective of net profit, in 2018, the non-net profit of the photovoltaic sector deducted 9.21 billion yuan, down 42.9%, and the net profit margin was 3.74%, which was 2.85% lower, but the non-net profit of components and equipment deduction increased year-on-year. From the perspective of capital investment, the capital expenditure of the photovoltaic sector in 2018 was 53.273 billion yuan, down 9.77%, but the capital expenditure of inverters, battery chips, auxiliary materials and equipment increased year-on-year.

Polarization is getting worse

A number of companies said in the annual report that the “5·31” new policy has intensified the market competition of photovoltaics. Domestic demand and prices of photovoltaic products have fallen rapidly. Some of the backward production capacity of the industry has been eliminated, and the utilization rate of various links in the industry has declined to varying degrees. The differentiation is obvious, and the industry resources are concentrated to high-quality enterprises.

According to the statistics of China Photovoltaic Industry Association, in 2018, the capacity utilization rate of industrial wafer companies is about 40%-80%, and the capacity utilization rate of component companies is about 30%-75%.

According to incomplete statistics, in the enterprises that have disclosed capacity utilization, policy fluctuations have limited impact on the industry's first echelon enterprises, and their relevant indicators are significantly higher than the industry average. Among them, the capacity utilization rate of Longji's silicon wafers and modules were maintained at 80.94% and 93.1%, respectively. The capacity utilization rates of Zhengtai Electric's batteries and components were 90.49% and 94.48%, respectively. The capacity utilization rate of Tongwei's batteries and components was even higher. More than 100%.

However, not all companies are so lucky.

*ST Hairun said that due to the impact of the series of capital market events, the dispersion of equity, and the continued tight cash flow, the company's main business continued to shrink. In the second half of 2018, the company's production bases continued to shrink. Due to the company's financial and financial status, the company is currently unable to invest in the development of new photovoltaic power plant projects. In 2018, *ST Hairun achieved revenue of 878 million yuan, down 73.03% year-on-year; net profit - 3.737 billion yuan, has suffered losses for three consecutive years.

Sunflower said that due to the policy, the domestic sales price dropped significantly in 2018, the annual sales volume decreased significantly, and the sales volume of battery components decreased by 48.03% compared with the same period of last year. In order to cope with the severe sales situation, from June 2018 to the end of the reporting period, sunflowers will reduce production scale and reduce inventory to ensure cash flow. In 2018, the production of battery components decreased by 47.36% year-on-year, and the ending inventory of battery components decreased by 44.28%.

Among the 44 companies surveyed by the reporters, the top five companies accounted for 41.6% of the total revenue of all enterprises. Industry concentration is becoming more and more obvious, and polarization is becoming more serious.

Overseas markets become growth highlights

Affected by policy fluctuations, China's new PV installed capacity was about 44 GW in 2018, down 16% from 2017, but the global PV market is still developing steadily. China Photovoltaic Industry Association data show that in 2018, the global installed capacity of photovoltaics was 104 GW, a slight increase of 1.96% year-on-year, and the overseas market installed 60 GW, an increase of 22%.

The overseas market, which has continued to develop rapidly, has become the driving force for the growth of domestic PV listed companies in 2018. Longji shares believe that although the "531" New Deal has caused an impact on the domestic market, it has also accelerated the decline in the cost of photovoltaic system. Due to the low non-technical cost of overseas PV installations, it has further stimulated the growth of demand in overseas markets, driving the mainstream PV companies to fought. In overseas markets, the economics of photovoltaics have gradually become the main driving force for the growth of global PV market demand. During the reporting period, Longji's overseas monocrystalline module sales reached 1.96 GW, a significant increase of 370% year-on-year.

GCL integration overseas shipments reached 2.3 GW in 2018, overseas business share increased to 52.9%, global market share exceeded 4%; Zhengtai electrical components sales volume 3.1 GW, overseas component sales accounted for over 70%, and This data does not include the size of its self-contained components; Jinko Energy's overseas shipments in 2018 exceeded 9 GW, accounting for approximately 80%.

Dongfang Risheng believes that the overseas market has entered the post-subsidy era, and the parity Internet will drive the continued growth of overseas markets.

Zhengtai Electric said that the current export concentration of PV module market continues to decline, forming a diversified market combining traditional market and emerging market; the EU has cancelled the “double-reverse” policy for five years, and the European market has recovered; especially in many regions of the world. Emerging markets such as India and South America are accelerating into the parity cycle; the Southeast Asian market is expected to be in the future, and Japan and Australia are also entering the process of PV marketization under policy intervention, and parity expectations are obvious.

Most companies said in their annual report that in 2019, expanding overseas markets will be regarded as one of their operational priorities, and they will strive to achieve the sustainability and stability of overseas business growth.