The 500 billion giant plummeted again, and 1 million shareholders lost money!

Sharp eyes on finance

2024-06-11 16:57Posted on the official account of Beijing Ruiyan Finance

It fell by nearly 10% in three days, and nearly 1 million shareholders were "critically attacked" again.

In the past three trading days, the photovoltaic giant LONGi Green Energy, which had a market value of 554.7 billion yuan in the past, fell by 6.02%, 2.56% and 0.9% respectively, and its market value shrank to 125.7 billion yuan, evaporating nearly 430 billion yuan.

Today, LONGi's share price once fell to the lowest of 16.41 yuan, hitting a new low in nearly four years, and has plummeted 77.58% from the all-time high.

Suspension of production, issuance of bonds, and purchase of wealth management

The factors that caused LONGi's stock price to plummet were first related to the rumors of the closure of its Southeast Asian production line.

A few days ago, it was reported in the market that under the influence of relevant measures in the United States, a number of domestic photovoltaic companies have shut down the production lines of some Southeast Asian factories. It also mentioned that LONGi Green Energy's PV module factory in Malaysia will be gradually shut down, and five Vietnamese cell factories have been suspended.

LONGi responded that the battery plant in Vietnam was temporarily suspended due to market reasons. Given that Vietnam's battery production capacity accounts for a small proportion of the company's total production capacity, even the shutdown will have little impact on the company's overall performance.

As of the end of last year, LONGi Green Energy's 3.35GW monocrystalline cell project in Vietnam was fully operational, with an estimated total investment of 757 million yuan, and its 2.8GW monocrystalline module project in Malaysia was put into operation with an estimated total investment of 1.529 billion yuan.

In addition, LONGi Green Energy's monocrystalline silicon ingot project in Malaysia with a total investment of 2.125 billion yuan and an annual output of 6.6GW is expected to start production in the second quarter of 2024.

From LONGi's response, it can be seen that the market rumors about the closure of the factory are partly true, and LONGi's announcement is downplaying the impact of the shutdown of the Vietnam factory.

At the same time as the factory shutdown, LONGi Green Energy did two major things in the financial market almost at the same time:

The first is to prepare to increase the maximum daily balance limit of self-owned funds entrusted wealth management from 20 billion yuan to 30 billion yuan in 2024, an increase of 10 billion yuan.

The second is to issue another 10 billion yuan of bonds, which, according to the company, is "used to further broaden financing channels, optimize financing structure, and reduce financing costs".

Earn interest differentials and play finance?

Buying wealth management with the left hand and issuing bonds with the right hand, and all of them are 10 billion, does LONGi Green Energy want to earn interest differentials through the financial market?

At present, it can be found that the capital flow of LONGi's wealth management products in 2022 will be as high as 57 billion yuan, and its annualized income will often be more than 3.5%.

At present, the annualized interest rate of green finance corporate bonds is only about 2%.

There may be a trend of lower yields on bank wealth management products in 2023, but compared with the 2% bond issuance interest rate, it will definitely be much higher, so LONGi's statement that "issuing bonds to buy wealth management and engaging in arbitrage" has a certain basis.

In this regard, the staff of the company's securities department said that the funds raised by bond issuance are based on market research and judgment and the company's future strategic planning needs, and have nothing to do with increasing the wealth management quota.

LONGi issued a corporate bond of 10 billion yuan, saying that it is mainly used for the construction of advanced production capacity such as "Tererick" silicon wafers and BC second-generation batteries.

The "Tererui" silicon wafer was released in March this year, and LONGi claims that it is a product developed by hundreds of technical engineers over a period of up to three years, which is regarded as a huge breakthrough in silicon wafer innovation in the past decade.

The second generation of BC batteries was released in May this year, using "Tererick" silicon wafers, and it is said that they have also been greatly optimized and upgraded.

It stands to reason that LONGi's self-proclaimed blockbuster products should have a lifting effect on the stock price, but in fact they are very different.

LONGi's stock price fell by more than 8% and nearly 7% in March and April respectively, rose slightly by 2% in May, and fell by more than 10% before half in June.

Since 2024, LONGi Green Energy has fallen by more than 27%, far exceeding the -12% of Tongwei and -1% of JinkoSolar.

In addition to the price war in the industry, LONGi's decline may have a lot to do with the company's technological development line.

At present, more manufacturers are developing and producing TOPCon batteries, while LONGi has been going around in the relatively niche BC batteries.

The market questioned LONGi's choice of the wrong technical route, and since then, investors from all walks of life have been even less optimistic about its stock price.

Shareholders were furious, and high inventories dragged down performance

In order to boost the stock price, LONGi announced in March that it would spend 300 million to 600 million yuan to buy back the company's shares, but this seems to be more of a rhetorical stay, because as of the end of May, the company had only spent 50 million yuan on buybacks, which is far from the lower limit of 300 million yuan.

With very little money to engage in repurchase, but a bond issuance is 10 billion, a purchase of wealth management is to increase the amount of 10 billion, coupled with the falling stock price, such a sharp contrast, so that shareholders are very angry.

In fact, LONGi has a lot of money on its books. According to the data of this year's quarterly report, the company's monetary funds on the account exceeded 57.3 billion yuan, which can be said to be far ahead of its peers.

Tongwei Co., Ltd., another photovoltaic giant mentioned above and much stronger than LONGi this year, only had more than 28 billion yuan of monetary funds on its books in the first quarter of this year, almost half less than LONGi.

Despite the fact that LONGi has so much money on its books, its inventory is also surprisingly high, at 22.61 billion yuan at the end of the first quarter.

If this trend of high inventories continues, it will certainly be detrimental to the company's cash flow. According to the financial report, at the end of 2023, LONGi's net cash flow from operating activities was 8.117 billion yuan, a significant decrease of 66.69% year-on-year. In the first quarter of 2024, this data will become -4.889 billion yuan, that is, it will continue to deteriorate.

High inventories not only eat into cash flow, but also raise debt. In the first quarter of this year, LONGi's asset-liability ratio was 59.38%, up 5.2% year-on-year.

Products can't be sold, not only accounting for inventory, but also the value of inventory is falling. In the first quarter of this year, LONGi made an impairment provision of 2.649 billion yuan for inventory assets and 152 million yuan for impairment of fixed assets.

Or because of factors such as price wars and products not selling, as early as the beginning of this year, it was rumored that LONGi would "optimize" nearly one-third of its employees to cut costs. LONGi said that this is not so exaggerated, and the personnel adjustment ratio is about 5%.

At that time, LONGi's 2023 annual report and 2024 first quarter report were not released, so we didn't know what LONGi's specific financial situation was.

However, the author's original article on March 21 "Another giant was liquidated and reduced, and 1 million shareholders were stunned!" It is clearly mentioned that "LONGi's performance in the fourth quarter of 2023 and the first quarter of 2024 is basically not good." ”

In fact, LONGi's revenue in the first quarter of this year was 17.674 billion yuan, a year-on-year decrease of 37.59%; The net profit was a loss of 2.35 billion yuan, compared with 3.637 billion yuan in the same period last year.

Brokerages are still advocating, but institutions are retreating

From making billions every quarter to losing billions every quarter, its stock price has been falling and falling at an accelerated pace for a long time.

However, some brokerages, such as Ping An Securities, also gave a recommended rating report on May 5, saying that LONGi is "continuing to operate steadily".

After this research report, LONGi's stock price fell by almost 10%.

Debang Securities gave a "buy" rating on November 23 last year, citing "steady shipment growth and multi-line technological innovation".

Let's take a look at LONGi's revenue that fell by 37.59% in the first quarter of this year, the inventory scale of up to 22.61 billion yuan, and the products that cannot be sold.

Too many brokerage research reports, what is the use of fooling retail investors?

As of the end of the first quarter of this year, LONGi Green Energy still had 960,000 shareholders, but the proportion of institutional holdings has plummeted to about 17%, compared with about 43% at the end of June 2022.

Institutions retreated, retail investors stayed, and in the end, it was retail investors who bore all the pain of the decline.

Some of LONGi's major shareholders have completed huge cash-outs in the high range of stock prices in previous years, which is the real big winner.

View original image 235K

• 

• 

• 

• 

• 

• 

• 

•