Photovoltaic leader Tongwei shares briefly fell by the daily limit of 7.98 percent, triggering speculation in the market. There are rumors that the company in the fourth quarter of 2020 impairment, there are also concerns about the company’s performance in the first quarter of this year.
The reporter of E Company called the Tongwei Stock and Securities Department for this, and the relevant person responded that the company’s business level is normal, the capital market fluctuations are mainly affected by short-term mood fluctuations, and the company has no way to control. From the point of view of some brokerages, Tongwei shares are still optimistic about the prospect, for example, Capital Securities forecast that the net profit of Tongwei shares in 2021 is 6.7 billion yuan.
In the process of communication with the industry, the reporter also got a feedback, that is, the price of silicon materials has driven the price of silicon wafers, batteries and other downstream links, which may have an impact on the demand for terminal power stations. Recently, the silicon material price exceeded 100,000 yuan/ton, Longji, Zhonghuan and other silicon chip leaders have also increased the price, but it is obvious that the industry chain price significantly increased and photovoltaic cost reduction goal is not consistent.
Tongwei response: the business is normal
Tongwei is one of the leading A-share photovoltaic companies. Its main business involves photovoltaic silicon materials and cells. According to the three-year plan made by the company at the beginning of last year, by the end of 2020, the production capacity of high-purity silicon will reach 80,000 tons/year and the production capacity of battery will reach 30-40GW/ year.
On the afternoon of 3rd, the reporter of E Company called the Tongwei Stock and Securities Department. According to the stock price performance on that day, the person of Tongwei Stock responded that “the company’s business level is normal, and the fluctuation of the capital market is mainly affected by short-term mood fluctuations. The company has no way to influence it, but tries its best to answer the calls of investors.”
Reporters noted that there were some negative information about Tongwei shares on the same day, involving the company’s possible impairment in the fourth quarter of 2020, as well as the impact of the restricted stock plan, the release of performance in the first quarter of 2021, etc.
Today’s after-market data showed that the Shanghai Stock Connect bought 761 million yuan and sold 629 million yuan, an institutional seat bought 198 million yuan. The three institutions sold a total of 1.712 billion yuan.
In the first three quarters of last year, Tongwei shares achieved operating revenue of 31.68 billion yuan and net profit of 3.33 billion yuan, up 13.04 percent and 48.57 percent, respectively, year on year. Generally speaking, if the listed company last year net profit changes more than 50%, should be disclosed in January of that year performance forecast. Benefited from the strong demand for photovoltaic and other factors, in January this year, many photovoltaic listed companies significantly increased their performance, but Tongwei shares are not among them.
In view of the market concerns about whether there is impairment of the company, Tong Wei shares responded that it is not clear how the market, investors think, but the company is completely normal, “this may be a short-term emotional wrong to kill phenomenon.”
It is worth mentioning that recently, GCL-Poly Energy, which puts silicon material business at the core of its strategy, has again made efforts to build granular silicon. The company plans to cooperate with Shanghai CNC to invest and build a project in Inner Mongolia with an annual output of 300,000 tons of granular silicon, with a total investment estimated at 18 billion yuan. Among them, the initial construction of 60,000 tons/year, an estimated investment of 3.6 billion yuan. Previously, GCL-Poly also arranged the production capacity planning of granular silicon in Xuzhou and Leshan.
One of the claimed advantages of preparing granular silicon by silane method is that the cost is better than that of polysilicon prepared by improved Siemens method. Does the large-scale expansion of granular silicon produced by GCL-Poly affect the market’s expectation of Tongway shares?
In view of this problem, Tongwei shares said that the particle silicon has no effect on the company. “The silicon market is big enough to allow for multiple technology routes, but with some companies making more and others less because of profitability, we feel granular silicon will be less because it has always been a catch-up because of cost.”
Tongwei shares tumbled, many institutions paid attention to. The team of Capital Power Group pointed out that negative information did not affect the positive trend of Tongwei’s shares. According to its calculation, the average transaction price of silicon material in 2021 is 100,000 yuan/ton, the cost of silicon wafer is 2.7 yuan/piece, and the battery is 0.8 yuan /W. The net profit of Tongwei in 2021 is 6.7 billion yuan. Net profit is expected to exceed 9 billion yuan in 2022.
Price fluctuations affect installed capacity expectations
As the upstream link of the photovoltaic industry chain, every move of the silicon market has attracted attention, especially the recent silicon price breakthrough of 100,000 yuan/ton, affecting the hearts of practitioners. Silicon material price squeeze downstream profit space, in order to maintain the stability of profitability, downstream silicon wafer, battery links have to price measures to deal with.
For silicon material, battery in the two links of the Tongwei shares, silicon material price impact is more complex. On the one hand, the price rise of silicon material brings direct benefits to Tongwei shares. On the other hand, the company is also a leading manufacturer of battery pieces. The price rise of silicon material drives the price rise of silicon wafer, which is the raw material for manufacturing battery pieces, and the procurement cost of the company’s battery business increases.
In view of this situation, Tong Wei shares also recently raised the price of the battery. At the end of February, tong wei shares announced the battery quotation in March, among them, single crystal PERC battery 166 series unit price is 1 yuan /W, single and double 210 battery price is 1.04 yuan /W. The above prices compared with February, were increased by 0.05 yuan /W.
In the exchange process, Tongwei shares also talked about, although the price of silicon material, but the company also has the battery business, we purchase silicon wafers will also increase the price accordingly, “we may feel that the impact on the battery profit is relatively large, so there is periodic panic.” In response to the offer, the person said that this is not the final price, but needs to be negotiated with the client.
However, the upstream price pressure will be transmitted to a large extent to the downstream, for example, the price of silicon materials, Longji, Zhonghuan and other silicon wafer enterprises have increased their silicon wafer prices in March; The price of silicon wafers is passed down to the battery sector; At the end of the day, it’s the component vendors who are really getting squeezed. Component price unchanged, its own profit will be impacted; Power station customers may find it hard to accept price increases for components.
For the photovoltaic industry, this year’s backdrop is the full entry into the era of parity. In addition to the remaining bidding projects in 2020 can still enjoy subsidies, this year’s new installed capacity will no longer enjoy price subsidies; And the current industry chain price rise obviously goes against the goal of constantly reducing photovoltaic power generation.
In the process of communication with Tongwei shares, company personnel also talked about this situation, “for power plant enterprises, there will be some challenges, because after all, many raw materials are rising in price.” However, the source also pointed out that it is not clear how much impact rising industrial chain prices will have on actual installed capacity, “because private enterprises and state-owned and central enterprises can not accept the same yield.”
Reporters noted that in addition to Tongwei shares tumbled, March 3, Longji shares fell by more than 4% in the intraday, closing down 1.81%. Although the market is expecting a good prospect for the photovoltaic industry, for the terminal power stations, will they choose to reduce the new installed capacity in the process of increasing the price of the industry chain, and wait for the price of the industry chain to return to normal?
In response to this question, an industry insider told reporters that at this stage, the new demand for photovoltaic is relatively weak, “there may be some wait-and-see sentiment, now do not understand, it is better to take a step back, back to understand again, just like last year during the epidemic situation.”
In fact, according to the China Photovoltaic Industry Association’s previous forecast, new domestic installations this year are expected to be 55-65GW, an increase of 14.1% to 34.8% over last year.
article links：Shares of 200 billion yuan were hit by the daily limit
Reprint indicated source：Shine Trader Limited Live information