On November 25, it was reported that a fire broke out in the first plant of Longji Co., Ltd., and smoke billowed on the spot. After verification by Longji, the plant is a battery plant located in Gaoling, Xi’an.
According to the relevant person in charge of Longji, a small area of fire broke out at the plant at 9 am on the 25th. With the assistance of the fire department, the open fire was quickly extinguished before 10 am. Currently, safety supervision, fire protection and related departments are carrying out other activities in the plant. Disposal of the operation did not cause casualties. The cause of the fire and property damage are under investigation.
Radar Finance noted that on November 25, Longi’s share price fell by 3.67% in a single day. In addition, under the influence of negative information such as the decline in profit growth in the third quarter report, the company’s market value has evaporated over 55 billion in November.
Radar financial analysis found that the Xi’an Gaoling battery plant that caught fire this time may belong to Shaanxi Longji Leye Photovoltaic Technology Co., Ltd. (hereinafter referred to as “Leye Photovoltaic”).
Previously, a convertible bond prospectus disclosed by Longji shares mentioned that it intends to raise 1.5 billion yuan to lease the workshops of Xi’an Economic Development Industrial Park Construction Co., Ltd. (hereinafter referred to as “Xi’an Economic Development”) for use in Xi’an Jingwei New City. Production of 5GW monocrystalline battery project. The real estate property certificate number of the land involved in the plant is Shaanxi (2019) Gaoling District Real Estate No. 0012898.
When the fundraising prospectus was announced, Xi’an Economic Development was in accordance with Leye Solar’s customization requirements for the construction of new plants and supporting auxiliary facilities.
It is reported that after the completion of the above-mentioned 5GW monocrystalline battery project, it will achieve an operating income of 3.739 billion yuan and a net profit of 398 million yuan in the year of completion.
Public information shows that the headquarters of Longji Group and the Silicon Wafer Division are both located in Xi’an, Shaanxi. Since 2015, they have developed into the world’s leading manufacturer of monocrystalline silicon products. In the past ten years, the company’s revenue has risen sharply from 1.7 billion yuan to 54.6 billion yuan, an increase of more than 30 times. Since the company’s A-share listing in 2012, the stock price has increased by nearly 60 times.
At present, the latest market value of Longji shares is 473.3 billion yuan, exceeding the sum of the second and third largest companies in the industry.
Leye Photovoltaic is a company acquired by LONGi Co., Ltd. during the first significant stock price breakout stage in order to extend its business to the downstream of the industrial chain.
Radar Finance understands that photovoltaic is a technology for converting light into electricity. Its conventional power generation routes include thin film and crystalline silicon, and crystalline silicon can be divided into monocrystalline silicon and polycrystalline silicon. The difference between the two is that the single crystal impurity content is small, the conversion efficiency is high, but the production cost is high, and the technology is difficult; the polycrystalline impurity is more, the conversion efficiency is low, but the technology is mature, the industrial foundation is good, and the production cost is low. The win is cost-effective.
Many years ago, Li Zhenguo, the founder of Longji shares, made the company a leader in the industry step by step because of his firm bet on the monocrystalline silicon route. But during this period, the company has also experienced many ups and downs.
For example, in 2014, due to the incompatibility of LONGi’s bet monocrystalline silicon with the supplier’s manufacturing equipment, and midstream battery manufacturers’ unwillingness to invest in the transformation of production lines, LONGi’s shares fell into an embarrassing situation of empty technology and no production capacity.
In order to solve this problem, Longi acquired Leye Photovoltaic, extended its business to the battery and module links, so as to rapidly expand production, and adopted the most advanced PERC technology at the time, which can improve the efficiency of monocrystalline cells by 0.8%-1.0 %.
Reflected in the financial report, this move directly caused Longi’s component business to jump from 69 million yuan in 2014 to 2.519 billion yuan in 2015.
Overlapping negatives has led to recent stock price slump
The leaks in the house have been rainy and overcast. Before the plant fires, LONGi frequently encountered “mercury retrogrades”.
The financial report shows that Longi’s net profit attributable to the parent in the first half of 2021 increased by 21.3% year-on-year, but compared with the 104.83% growth rate in the same period in 2020, it can be described as “increasing revenue but not profit.”
This phenomenon also continued in the third quarterly report. From January to September 2021, Longi’s net profit attributable to the parent company was 7.556 billion yuan, a year-on-year increase of 18.87%, and a drop of over 63 percentage points from the growth rate of the same period in 2020.
At the same time, LONGi’s gross profit margin in the first three quarters of this year was 21.3%, which is a significant drop compared with the gross profit margin of 27.84% in the same period last year. Some analysts pointed out that the company’s performance has been affected by the sharp increase in prices of raw materials such as polysilicon, glass, and plastic films for photovoltaics due to insufficient supply. This impact has been intensified in recent months with the advent of power cuts.
In response to this, on September 30, LONGi, Jinko, Trina, JA and Risen Energy jointly issued the “Joint Appeal on Promoting the Healthy Development of the Photovoltaic Industry”, stating that as the price of silicon materials soared, Many component orders that have been signed will fall into serious losses. This serious imbalance of upstream and downstream development will break the originally stable and orderly industrial ecological chain and seriously endanger the healthy and sustainable development of the industry.
In addition to rising costs, Longi shares have to face drastic changes in the external environment.
On November 3, Longi announced that the 40.31MW module products exported to the United States by its subsidiary Longi Green Energy were detained by the US Customs. Later, it was reported that, “According to the WRO released by the United States in June, it believes that Longi may become the next component manufacturer for U.S. Customs and Border Protection operations; Longi has been informed that its seaborne cargo is expected to be stranded in five ports, which is expected. It will have a wide-ranging impact on Longi.”
Although Longi responded immediately, saying that “this batch of goods only accounted for 1.59% of the company’s export sales to the United States in 2020. At present, the company’s shipments to the US market are still proceeding normally. ) Has not had a significant adverse impact on the company’s operations for the time being,” but it was reflected in the capital market that the company’s share price plummeted 8.98% on November 3.
In addition, on the evening of November 4, Longi also received a temporary cross-border injunction formally served by the Dutch marshals.
As an international company with an overseas business accounting for nearly 50%, overseas business is of great significance to Longi.
In addition, the company was “snatched away” by funds from multiple parties.
On November 1, Bai Zhongxue, the director of Longji shares, plans to reduce his holdings by no more than 28,000 shares; after the market on November 3, the data of the Dragon and Tiger list shows that Guotai Junan Securities, the common seat of the leader of the famous hot money chapter, appeared in the seller of Longji shares. Second place, the amount sold was as high as 652 million yuan.
According to wind statistics, as of the end of the third quarter, there were a total of 845 funds Shigekura Longji shares, holding a total of 779 million shares, a decrease of 59,352,600 shares compared to the end of the second quarter. If calculated according to the average transaction price of Longji shares in the third quarter, In the third quarter, public funds reduced Longji shares by approximately 5.154 billion yuan.
Under the superposition of various negatives, since November 1 so far, Longi’s share price has fallen by more than 10%, and its market value has evaporated 55.483 billion.
However, there are also opinions in the market that with the favorable policies of carbon neutrality and carbon peaking, and the global countries working together to promote clean energy as the outlet, the photovoltaic track can still maintain a high level of prosperity for a long time and will be favored by capital for a long time. . The pressure at this stage is more like the company being “flickered” in the process of rapid development.
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