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On May 21, the Huangshi Group disclosed the Shenzhen Stock Exchange's inquiry letter on the company's 2023 annual report, asking the Huangshi Group to explain the reason and rationality for the substantial increase in photovoltaic revenue but the sharp decline in gross profit margin.
According to the annual report, Huangshi Group realized operating income from photovoltaic module sales, EPC business and other businesses.Fibaworldcupqualifiersasia20233.9 billion yuan, accounting for 11.71% of the total revenue, an increase of 1367.05% over the same period last year, but the gross profit margin decreased by 25.79% over the same period last year.
It is understood that the Royal Group announced in 2022 that it would invest 10 billion yuan to build a TOPCon project to enter the photovoltaic track. But only a year later, the company suddenly transferred the officially announced photovoltaic project, which was regarded by the market as a move to withdraw from the competition and return to the main business.
As of May 22, the Royal Group closed at 3.73 yuan per share, which is no lower or higher than the previous day's closing price, with a total market capitalization of 3.242 billion yuan.
Cross-border pursuit of "Light" has been questioned
According to public information, the Huang Group was founded in 2001 and was listed on the Shenzhen Stock Exchange in 2010. Since 2014, the company has frequently sought diversified industrial development across the border. At present, its main business includes dairy industry, information business, film and TV drama production and distribution, and photovoltaic business. It is a comprehensive listed company with buffalo milk characteristics as the core and photovoltaic technology-empowered dairy industry.
According to the 2023 annual report, the company achieved operating income of 2.893 billion yuan last year, an increase of 0.07% over the same period last year. Among them, photovoltaic module sales, EPC business and other businesses achieved operating income of 339 million yuan, accounting for 11.71% of the total revenue. Although the revenue of this part increased by 1367.05% compared with the same period last year, the gross profit margin decreased by 25.79% compared with the same period last year.
On this basis, the Shenzhen Stock Exchange requires that Huangshi Group, in combination with the existing product types, revenue models and the development of the photovoltaic industry in the company's photovoltaic module sales and EPC business, explain the reason and rationality of the sharp decline in gross profit margin in related business, and whether there is a big difference between Huangshi Group and comparable companies in the same industry.Fibaworldcupqualifiersasia2023On this basis, combined with the company's on-hand orders, existing production capacity and planned production line construction, this paper explains the reason and rationality of the substantial increase in business income compared with the same industry, whether there is a big difference with comparable companies in the same industry, and whether the relevant influencing factors are likely to continue.
As we all know, compared with other links of the photovoltaic industry chain, the photovoltaic module link has the characteristics of relatively low investment per unit capacity, relatively shorter construction cycle and relatively flexible production scheduling, but the gross profit margin is at a low level in the industry chain. According to agency statistics, affected by the price war, the gross profit margin of the domestic component business in 2023 is about 14% and 18%. Last year, the gross profit margin of photovoltaic modules seemed to be on a par with that of the industry.
In addition to this inquiry, the Huangshi Group in the cross-border pursuit of "light" on the road, has been questioned by regulators many times. In August 2022, the Royal Group announced a high-profile cut into the photovoltaic track. The company disclosed that Huangshi Nongguang complementary (Guangxi) Technology Co., Ltd. (hereinafter referred to as "Huangshi Nongguang"), an associated company with a 45% stake, has signed an investment agreement with the Management Committee of Fuyang Economic and technological Development Zone of Anhui Province on 20GWTopcon ultra-high efficiency solar cells and 2GW modules, and set up a new company, Anhui Green Energy, as the main investor, with an investment of about 10 billion yuan. In addition, Huang Nongguang will also participate in the investment of the first phase of the new energy distributed photovoltaic project in Binyang County, with an investment amount of 1 billion yuan.
At that time, the photovoltaic industry was in an upward cycle, and the cross-border news of Huangshi Group soon attracted the attention of regulators. The Shenzhen Stock Exchange pointed out that Huangshi Group needs to explain in detail the specific situation of Huangshi Nongguang complementarity, the rationality and feasibility of the above project, and the impact on listed companies.
In June 2023, Huangshi Group and related personnel again received a warning letter issued by Guangxi Securities Regulatory Bureau. It is mentioned that the information disclosure of Huangshi Group's participation in photovoltaic projects is inaccurate and incomplete, and in the above announcement on matters related to participation in photovoltaic projects, the investment and return models of listed companies in photovoltaic projects are not stated. Incomplete information disclosure is involved.
It is worth noting that both letters mentioned that the Royal Group did not specify the investment and return model in the photovoltaic project. Subsequently, the Huangshi Group finally made a supplementary announcement in response to the Shenzhen Stock Exchange's inquiry letter on the company's 2022 annual report.
Soon after, however, Huangshi Nongguang suddenly transferred its 80% stake in Anhui Green Energy for zero yuan, and Huangshi Group cancelled Huangshi Jinghua, a joint venture in charge of photovoltaic business. Some industry insiders pointed out that this means that Huangshi Nongguang has given up control of Anhui Green Energy, and Huangshi Group has also pulled away from the 10 billion TOPCon project accordingly.
This time node is quite delicate, it is the price of the photovoltaic industry chain falling, the whole industry to enter the beginning of the downward cycle. The Royal Group also said in the cancellation announcement that it is for the purpose of integrating and optimizing the allocation of the company's existing resources and reducing the management costs of the non-dairy sector. In the 2024 outlook, the company regards the photovoltaic business as a means of "enabling" the main dairy industry, and has no further expansion plans.
Photovoltaic industry waits for bottoming out
As early as when the photovoltaic industry was hot, there were not a few cross-border enterprises like Huang's Group trying to get a piece of the pie. Now that the development of the photovoltaic industry is slowing down, Huangshi Group has taken the lead in pulling out, and many cross-border people are struggling in the fierce knockout stage, suspending production and losing money are common, and they are in a dilemma.
Take ST Lunda, which has deducted negative non-net profit for three consecutive years and has been "capped" as an example, ST Lunda crossed the border to the photovoltaic solar panel race track in 2020, and then lost money after deducting non-net profit for the next three years. According to the financial report, ST Landa achieved operating income of 839 million yuan last year, down 47.49% from the same period last year, while the net profit attributable to shareholders of listed companies lost 262 million yuan, down 1447.69% from the same period last year. As for the sharp decline in performance, the company explained that it was mainly due to the continued decline in the market price of high-efficiency solar panels during the reporting period and an increase in the proportion of contract manufacturing business that recognized income on a net basis.
Under the pressure of losses, ST Lunda's photovoltaic projects have stopped production one after another. On March 19th, ST Landa announced that it intends to terminate the investment in the construction of Tongling annual 20GW high-efficiency photovoltaic battery industry base. On April 16 and May 15, the company announced many times that the main production equipment of Jinzhai Jiayue will continue to stop production. In addition, cross-border enterprises, including Haiyuan compound wood, sunflower, Mubang Hi-Tech and so on, have announced the termination of photovoltaic-related projects.
Behind the "frustration" of cross-border people such as Wong Group and ST Lingda is one of the signs that the entire photovoltaic industry is hovering at the bottom of the cycle. Peng Peng, secretary-general of the China New Energy Power Investment and Financing Alliance, previously said that as industry corruption becomes increasingly serious, overcapacity appears, and industry competition intensifies. Cross-border companies with insufficient technology and just want to make quick money will inevitably be squeezed out of the industry first.
Since the fourth quarter of 2023, prices in the photovoltaic industry chain have continued to hit historical lows, and component prices have even fallen below 1W/yuan. Infolink data shows that the price of N-type TOPCon components has dropped to 0.86 yuan/W, a drop of more than 12% in the first quarter of this year.
Shen Wenzhong, director of the Solar Energy Research Institute of Shanghai Jiao Tong University, predicted to a reporter from the International Finance News that against the background of overcapacity caused by disorderly expansion, the prices of the entire photovoltaic industry chain are basically at the lowest point, and corporate profits are generally weak, and this trough is expected to continue until the end of the second quarter of this year.
How to develop "upward" has also become a top priority for the entire industry. On May 21, according to the CPIA public account of the China Photovoltaic Industry Association, the China Photovoltaic Industry Association recently organized a "Symposium on High-Quality Development of the Photovoltaic Industry" in Beijing. The meeting pointed out that efforts should be made to crack down on vicious competition in sales below cost prices; industry mergers and reorganizations should be encouraged to smooth the market exit mechanism.
Guided by positive industry news, the photovoltaic sector rose. As of the close of May 22, many stocks such as Jingao Technology, Aixu Shares, and TCL Zhonghuan had daily limit, while many stocks such as Daquan Energy and LONGi Green Energy followed suit.
(Article source: International Financial News)
