The photovoltaic industry can only be said to be "three years of new and three years old, and three years of patching and mending", the industry has changed too much, the market demand in the previous three years is too large, the capacity gap is also large, and the production capacity continues to expand in the next three years, the supply pressure continues, and related stocks are also skyrocketing and plummeting.
This year, the two photovoltaic giants, LONGi Green Energy and Tongwei, have come together to join hands and cooperate.
After the "Dragon Fight", the stock price both plummeted
LONGi Green Energy and Tongwei Co., Ltd., two companies, have been upstream and downstream supply partners, as well as competitors in the module field, and when the PV hype is at its hottest, one of the two must become the real PV hegemon in the eyes of investors in the secondary market.
After the "open and secret fighting", the results were gloomy.
As early as 2018, Tongwei signed a supply contract with LONGi for 55,000 tons of high-purity crystalline silicon.
However, during the period from 2020 to 2021, due to strong market demand, LONGi's module sales have become the "world's first PV brother", and its market value also reached a record high of 542.378 billion yuan in early November 2021, and the total market value of Tongwei shares on that day was only 247.585 billion yuan. Half a year later, on July 5, 2022, the market value of Tongwei reached a record high of 304.980 billion, while the market value of LONGi Green Energy had shrunk to 486.137 billion.
Today, the total market value of LONGi Green Energy is 99.2 billion yuan, and the total market value of Tongwei shares is 75.32 billion yuan, and the gap has been further narrowed, but the total market value of each company has shrunk by more than 200 billion yuan, and the total market value of the two higher companies has shrunk by more than 600 billion yuan!
(Screenshot of LONGi Green Energy's stock price trend)
(Screenshot of Tongwei stock price trend)
In the process of the soaring and plummeting stock prices of LONGi Green Energy and Tongwei, there are still some things worth paying attention to, which may also be one of the reasons for the rise and fall of stock prices.
It can be seen that after July 2022, the stock prices of both LONGi and Tongwei have been all the way down, and there has been almost no decent rebound. However, in March 2022, Tongwei and LONGi signed another 203,600 tons of high-purity crystalline silicon supply contract, and as a result, Tongwei's share price hit a new high in July 2022, while LONGi's share price did not hit a new high!
Investors should note that as the stock price in the secondary market continues to fall, it actually reflects the slowdown in PV market demand, but the two giants are still stockpiling production on a large scale.
In May this year, Tongwei and LONGi signed a supply contract of 862,400 tons of high-purity crystalline silicon, worth 39.1 billion!
(Screenshot of Tongwei announcement)
However, this time the hand-holding of the two giants does not seem to have the slightest effect on the stock price. Since the signing of the contract on May 8 this year, the share price of Tongwei shares has fallen by 27.22%, and the share price of LONGi Green Energy has fallen by 34.44%, hitting new lows in the past three years.
Could it be that in the current market situation, it is useless for the two photovoltaic giants to huddle together for warmth?
Advance receipts fell sharply, and the crystalline silicon giant finally turned into a loss
There is a saying called "under the nest, there are no eggs", which may be more appropriate to describe the current photovoltaic market.
The situation of LONGi Green Energy Some time ago, Brother Ruiyan wrote in "The 500 Billion Giant Plummeted Again, and 1 Million Shareholders Lost Money!" As already discussed, the photovoltaic module giant is now busy issuing bonds and buying financial management at the same time, and then "quietly" stopped some overseas factories.
So here we will mainly talk about the situation of Tongwei.
After all, Tongwei's photovoltaic business only accounts for about 70% of the company's sales, and about 25% of the company's agricultural and animal husbandry businesses such as pig raising.
Since the second half of 2022, the pre-receivables of the two PV giants, LONGi Green Energy and Tongwei, have continued to decline, indicating that the demand is indeed relatively weak, and it also seems to indicate that the entire PV industry will eventually enter a "cold winter"!
(Tongwei shares contract liabilities, data source: Flush website)
(LONGi Green Energy's contract liabilities, data source: Flush website)
I didn't expect the cold winter to come so quickly.
In the first quarter of this year, Tongwei Co., Ltd. and LONGi Green Energy both reported losses, with Tongwei losing 787 million yuan and LONGi losing 2.35 billion yuan. It seems that Tongwei on the material side is indeed better than LONGi on the component side, but it is only a little less.
(Tongwei shares' net profit, data source: Flush website)
(LONGi Green Energy's net profit, data source: Flush website)
Note that in 2022, Tongwei's net profit has surpassed that of LONGi Green Energy, and it has exceeded more than a little, and Tongwei's net profit has exceeded 10 billion yuan more than LONGi, winning the "King of Photovoltaics"!
In addition, this is also a year after Tongwei's "beautiful head" took the helm, the company has lost money for 2 consecutive quarters, and Tongwei will lose 2.728 billion in a single quarter in the fourth quarter of 2023. LONGi only lost 942 million in the fourth quarter of last year.
Looking at it this way, the two giants of Tongwei and LONGi seem to be about the same as "half a catty to eight taels". But in the case of Tongwei's loss, one thing that has to be complained about is that Vice President Li Bin's annual salary will still be as high as 26.28 million in 2023 after a 70% salary cut, and his annual salary will be as high as 86.5251 million in 2022!
(Screenshot of Tongwei's 2022 financial report)
It's okay, a executive's salary cut of seven achievements can save the company tens of millions.
As production continues to expand, inventory turnover is getting slower and slower
Investors may still pay more attention to the stock price, through a simple regression analysis, Ruiyan found that there is a significant correlation between the stock price performance of Tongwei shares and the company's inventory turnover rate, so we should still pay attention to Tongwei's inventory turnover.
Obviously, it can be seen from the contract between the two photovoltaic giants Tongwei and LONGi that the two giants are still expanding production and grabbing the market, as a result, the company's inventory turnover is becoming slower and slower, and the stock price is getting lower and lower!
(Tongwei stock turnover ratio, data source: Flush website)
(Screenshot of Tongwei stock price trend)
It can be seen that since the third quarter of last year, with the continuous decline in inventory turnover, Tongwei's share price has also continued to fall, and the stock price has been cut in half so far.
In the face of the continuous decline in stock prices, the most painful thing is the shareholder investors in the secondary market, as a listed company, Tongwei seems to take into account the feelings of investors in the secondary market, but it seems to have not considered their feelings.
On the one hand, Tongwei continued to expand production. First of all, its traditional breeding business, at the beginning of this year, Tongwei took over part of the equity of the pig breeding business of Tianbang Food, a farmer in Jiangsu and Zhejiang, with 1.6 billion; In terms of photovoltaic business, in the second half of last year, Tongwei first invested 10.5 billion yuan in solar cell and module expansion projects, and then invested 20 billion yuan in industrial chain integration projects, including 16GW rod, slice and cell project in Emeishan City, Leshan City, and 16GW rod, slice and cell project in Wutongqiao District, Leshan City.
(Screenshot of Tongwei announcement)
On May 13 this year, Tongwei said that the company already has a production capacity of 450,000 tons of high-purity crystalline silicon!
On the other hand, Tongwei announced a repurchase plan at the end of April this year, planning to repurchase the company's shares with its own funds of 2 billion to 4 billion, and the repurchase price is capped at 36 yuan per share. By the end of June, 49.2602 million shares had been repurchased, costing 1.037 billion yuan, and the repurchase price ranged from 19.05 yuan to 22.94 yuan.
In terms of the stock price performance results of the secondary market, Tongwei's repurchase plan has almost no effect, after announcing a long-term agreement with LONGi Green Energy of 862,400 tons in mid-May, the stock price has accelerated its decline, falling nearly 30% in the past month!
Obviously, the current photovoltaic stock price is like a frightened bird, as soon as the expansion of the stock price falls, for a period of time not to say that the expansion of the stock price can rebound. Shareholders are really afraid of the expansion of photovoltaic listed companies.