Electrical Equipment / Components & Telecoms

Recently, the National Energy Administration held a press conference to introduce the energy situation and the development of renewable energy in 2021. Among them, in the first quarter of 2021, the nationwide new photovoltaic installed capacity was 5.33 million kilowatts, an increase of 34.94% over the same period of the previous year; the utilization hours of photovoltaic power generation were 300 hours, a year-on-year increase of 10 hours; the national curtailment rate was 2.5%, a year-on-year decrease of 0.75%.

In the context of the overall improvement of the photovoltaic industry, the performance of photovoltaic enterprises has naturally increased as a whole. According to the released quarterly reports of 46 photovoltaic-related companies, these 46 companies all achieved profits, with a total revenue of 125.2 billion yuan, an increase of 15.76% over the same period last year; a total net profit of 11.5 billion yuan, an increase of 125.05 over the same period last year. %. Among them, 43 companies' revenue increased year-on-year, accounting for 93.48%; 37 companies' net profit increased year-on-year, accounting for more than 80%.

In terms of the types of new photovoltaic installations, in the first quarter of this year, the installed capacity of centralized photovoltaic power plants was 2.52 million kilowatts, and the installed capacity of distributed photovoltaics was 2.81 million kilowatts. The new installed capacity of distributed photovoltaics has surpassed that of centralized photovoltaics and has become the main force of new installed capacity. At the same time, affected by the rising market demand and the increase in the proportion of distributed photovoltaics, the penetration rate of string inverters has increased, and the performance of inverter companies such as Sungrow Power Supply and Jinlang Technology has also improved significantly.

Judging from the financial report data, although the performance of photovoltaic companies in the first quarter of this year remained profitable, the profitability of each manufacturing sector was significantly differentiated. Among them, the performance of upstream silicon materials and wafer companies has increased significantly. The net profit of Tongwei, Zhonghuan, and Beijing Express has increased by more than 100% year-on-year, while the profit performance of vertically integrated companies Longi, JA Technology, and Orient Risen Relatively weak.

Due to the continuous turbulence in the supply chain price of the photovoltaic industry this year, the downstream end market demand of the industry is fierce, and the manufacturing capacity is fully opened. However, due to the insufficient supply of upstream silicon materials, the price of silicon materials has increased significantly. In particular, at the present stage, silicon wafers, solar cells, and components are in the expansion cycle, leading to further contradictions in various links, and the gross profit margin of midstream companies is shrinking.

According to Tongwei, a leading silicon material company, benefiting from the continuous growth of downstream demand in the photovoltaic industry chain, the price of high-purity crystalline silicon continues to rise, and the shipment of solar cells has also increased significantly compared with the same period last year. From January to March this year, Tongwei achieved revenue of 10.62 billion yuan, an increase of 35.63% from 7.83 billion yuan in the same period last year; net profit reached 850 million yuan, doubled from 340 million yuan in the same period last year, and its performance is eye-catching.

On the other hand, affected by the production expansion cycle at the manufacturing end, the photovoltaic equipment sector is booming. In the first quarter of this year, the total revenue of the photovoltaic equipment sector was 13.296 billion yuan, an increase of 83.11% year-on-year; the net profit was 1.645 billion yuan, an increase of 145.96% year-on-year; the comprehensive gross profit margin was 24.99%, an increase of 0.27 percentage points year-on-year; advance receipts increased year-on-year 56.6%. Therefore, the photovoltaic equipment sector has benefited from downstream expansion and new technologies that bring demand for equipment updates. The industry has ample orders and profits will continue to improve.

In addition, public information found that not only equipment companies are driven by the high demand in the photovoltaic market, but the supply of auxiliary materials such as glass and EVA resin is also in short supply, driving corporate performance to become popular.

Taking the photovoltaic glass company CSG A as an example, in the first quarter of this year, CSG A achieved revenue of 3.007 billion yuan, a year-on-year increase of 73.41%; net profit was 573 million yuan, a year-on-year increase of 415.17%. In this regard, CSG A stated that the prices of float glass and photovoltaic glass rose sharply year-on-year from January to March. At the same time, the company's Qingyuan energy-saving second-line project was transferred to commercial operation. Affected by various factors, the company's main product sales increased significantly year-on-year.

Industry insiders believe that the profit gap between photovoltaic upstream and downstream companies will continue to widen this year due to factors such as price fluctuations in the photovoltaic supply chain, expansion and the proportion of new photovoltaic installations.