China Powder Network News Taking advantage of the high price of polysilicon and the booming market demand, the photovoltaic upstream silicon material giants have collectively started the “money printing machine” mode, leading the entire industry chain in performance. Tongwei Co., Ltd. (600438), a double leader in high-purity crystalline silicon and solar cells, released a performance report on the evening of October 20. Its revenue in the first three quarters reached 102.084 billion yuan, a year-on-year increase of 118.6%; net profit attributable to the parent was 21.73 billion yuan, a year-on-year increase of 265.54. %. Peng Mei News noticed that Tongwei ranks first in revenue and net profit among photovoltaic companies that have disclosed or forecast the third quarterly report, and is firmly seated as the “profit king” of photovoltaics.
Tongwei explained that during the reporting period, the market demand for the company’s high-purity crystalline silicon products continued to be strong, and the price rose year-on-year. The superimposed company’s new production capacity quickly climbed up and reached production, and achieved a substantial increase in volume and profit; the production and sales of the cell business were booming, The output increased significantly year-on-year, the product structure continued to be optimized, and the profitability increased year-on-year; the feed business optimized the market strategy to achieve both volume and profit growth.
In this round of photovoltaic boom cycle, Tongwei Co., Ltd. is undoubtedly the company that has benefited the most.
According to the data disclosed by Tongwei in its semi-annual report, the revenue of feed business accounts for about 23.8% of its total revenue, and the photovoltaic new energy business accounts for 76.2%. For reference, the 2021 annual report shows that the gross profit margin of its feed, food and related businesses is 9.48%; the gross profit margin of solar cells, modules and related businesses is 8.81%; the gross profit margin of high-purity crystalline silicon and chemicals is 66.69%; the gross profit margin of photovoltaic power is 66.69%. The interest rate is 62.82%. Among them, the high-purity crystalline silicon and chemical sector contributed the largest increase in net profit, and the gross profit margin of this sector increased by 31.99 percentage points year-on-year.
High-purity polysilicon is the core basic raw material of the photovoltaic industry chain. The dividend feast of this link continues to this day. This is the main reason why Tongwei, the world‘s largest polysilicon manufacturer, has soared in the past two years.
Since the second half of 2020, the price of polysilicon has risen sharply from a minimum of less than 60,000 yuan per ton due to factors such as continued strong market demand and insufficient supply flexibility in the industrial chain. After a brief retreat at the end of 2021, it will resume its upward trend in 2022, and it is still above 300,000 yuan / ton, a ten-year high. With the significant release of new polysilicon production capacity in the fourth quarter, the market’s expectations for the price reduction of silicon materials have been increasing. But up to now, the situation of “one silicon is difficult to find” has not changed, and the price of silicon material has not been significantly loosened.
The market agency SOLARZOOM think tank analyzed that there is basically no silicon material inventory in the domestic market at present, and some silicon material companies are also in the process of over-delivery shipments. In addition, the recent epidemics in Inner Mongolia, Xinjiang and other places have made the logistics and transportation of silicon materials in the corresponding regions. The problem is still plagued by certain problems, and some orders have a slight delay in the delivery time of downstream shipments; the price trend of silicon materials in the later period depends on the actual supply and demand situation of silicon materials, and whether the prices of downstream links can support the price of silicon materials to a certain extent.
While the price of silicon material remained at a high level, solar cells also started a continuous upward trend. According to the cell shipment ranking released by PV Infolink, a third-party consulting agency in the industry, in the first half of 2022, the top five global cell shipments were Tongwei, Aixu, Runyang, Zhongrun Solar and Jietai. Technology, Tongwei Co., Ltd. is the largest cell manufacturer.
PV Infolink’s latest research report believes that it is expected that in October, solar cells will still be the most tense and lacking link in the entire supply chain. The price is still high and there is no sign of loosening. The follow-up depends on the acceptance of high prices by module manufacturers.
The high profitability of silicon materials continues, and the profit of cell chips is expected to increase, but Tongwei is still “not satisfied” and is making every effort to enter the downstream module segment.
Tongwei Co., Ltd. announced on September 22 that it intends to sign the “High-efficiency Photovoltaic Module Manufacturing Base Project Investment Agreement” with the Jiangsu Yancheng Economic and Technological Development Zone Management Committee, regarding the company’s investment in the Yancheng Economic and Technological Development Zone. project cooperation. This is Tongwei’s first large-scale module investment. This is just the beginning. The Paper has learned from the industry that Tongwei’s overall long-term plan in the module sector may reach 100GW.
Judging from the public bidding results, after the “official announcement” to enter the component side, Tongwei has won at least four large component orders in succession.
Tongwei, which has huge production capacity of silicon materials and battery terminals, will undoubtedly have a significant cost competitive advantage when it “enters” the module segment. A person from a component company once told The Paper that, according to a rough calculation, under Tongwei’s integrated model, backed by ultra-high gross-profit silicon materials, even a component price of about 1.6 yuan/watt can still be profitable. The current mainstream module price in the market is 2-2.1 yuan/W, and the price of the modules shipped is also above 1.95 yuan/W, which shows Tongwei’s aggressive entry into the module market.
The huge profits accumulated by silicon materials have also enriched its “ammunition”. Some people in the industry believe that Tongwei will give up some of the silicon material profits and bid at a relatively low price, which may directly start a price war.
Tongwei Co., Ltd. once responded to the surging news that the company has had some module production capacity since the acquisition of Hefei Saiwei in 2013, and has maintained research and development promotion and a small amount of production expansion on this basis, and has also accumulated a certain technology and market foundation. “Based on the current national dual-carbon target requirements and the strengthening of the development trend of industry integration, the company will also follow the trend and consider making further demonstration plans in the module business.”
However, at the investor meeting held on August 20, the statements of relevant persons of Tongwei were much more “straightforward”.
The person said that Tongwei has always adhered to the path of specialization, focusing on the two core competencies of silicon materials and batteries, hoping for a good ecological development in the industry, and synergistically participating in shares. However, the front-end silicon materials and silicon wafers work well together, and the cells and components have not been unified. Tongwei’s research and development and small-scale mass production of silicon wafers and modules are mainly to demonstrate the product quality and performance of silicon-based solar cells, and they don’t want to grow bigger. This is the previous situation. “However, in recent years, due to the contradiction between supply and demand in the industrial chain, many module and silicon wafer companies are deploying silicon materials, especially module companies. Silicon wafers and batteries are deployed in the same proportion, which has brought a lot of pressure to Tongwei. The capital market hopes that the integration of components will be better, and we must also follow the general trend, the general trend of the capital market and the development needs of the industry.”
Original title: Who is the most profitable in the photovoltaic industry?Tongwei’s net profit in the first three quarters was 21.7 billion yuan, making it the king of profit
Note: The pictures are not for commercial use, please inform and delete if there is any infringement!