On the evening of April 29th, the photovoltaic industry leader Tongwei Co., Ltd. (600438. SH) released its annual report for 2023. The report shows that the company’s operating revenue in 2023 was 139.04 billion yuan, a year-on-year decrease of 2.33%, and the net profit attributable to shareholders of the listed company was 13.574 billion yuan, a year-on-year decrease of 47.25%. Although the prices of the photovoltaic industry chain have significantly adjusted and competition has intensified in 2023, Tongwei Co., Ltd. still demonstrates strong risk resistance and continues to remain the most profitable enterprise in the photovoltaic industry.
Since the beginning of the first quarter, the photovoltaic industry has ushered in a traditional off-season, and the prices of the industry chain continue to hit bottom. Due to the dual impact of supply-demand imbalance and low prices, the overall profitability of the photovoltaic industry in the first quarter has significantly declined year-on-year. On the same day, Tongwei Co., Ltd. disclosed its first quarter report for 2024, with a revenue of 19.57 billion yuan, a year-on-year decrease of 41.13%, and a net profit attributable to shareholders of the listed company of -787 million yuan, a year-on-year decrease of 109.15%. From the disclosure of the first quarter reports of various leading photovoltaic companies, it can be seen that they are currently facing pressure and adjustments, and the bottom of the industry chain’s profitability may quickly come.
The dual leading position of “silicon material+battery” is stable, and components have entered the top five globally for the first time
Tongwei Co., Ltd. continues to improve its lean management level, expand its cost advantage, and expand its high-end production capacity layout, consolidating its global leading position in the fields of high-purity crystalline silicon and solar cells, and demonstrating strong business resilience in response to industry cyclical fluctuations.
In the past year, Tongwei Group’s photovoltaic business performance has been very impressive, and its dual leading position in “silicon materials+batteries” has further stabilized. According to the annual report, the company’s high-purity crystalline silicon production capacity achieved sales of 387200 tons, a year-on-year increase of 50.79%, with a global market share of over 25%; Battery sales of 80.66GW (including self use) increased by 68.11% year-on-year; The annual sales of components reached 31.11GW, a breakthrough growth of 292.08% year-on-year.
The prominent cost advantage is one of the key factors for Tongwei Shares to achieve outstanding performance. In terms of silicon materials, the company has further reduced multiple consumption indicators, and the average production cost of high-purity crystalline silicon products has dropped to below 42000 yuan/ton in 2023, significantly leading the industry average level. Therefore, despite a significant price reduction, Tongwei’s high-purity crystalline silicon products still achieved a net profit of over 45000 yuan per ton.
The improvement of production technology and process also further expands the cost advantage of Tongwei Co., Ltd. In terms of solar cells, during the reporting period, Tongwei Group’s TNC cells were introduced with new technologies such as high square resistance dense grid and advanced metalization. The latest average conversion efficiency in mass production reached 26.26%. Combined with refined management experience, the production process was continuously optimized to reduce unit consumption. The non silicon cost has now been reduced to around 0.16 yuan/W.
In 2023, as the first complete operating year for Tongwei’s comprehensive layout of component business, sales achieved a breakthrough growth, achieving component sales of 31.11GW throughout the year, a year-on-year increase of 292.08%, and the shipment volume entered the top five globally. According to the company’s annual report, relying on its advantages in ensuring quality, quantity, and supply in the industrial chain, the company has won multiple ground power station projects including China Resources Power, Three Gorges, and China Electric Power Construction. It has also established in-depth cooperation with major platform clients such as Skyworth, Fujia, Anneng, and Sunshine in the distributed market. At the same time, the company completed the signing of its first 100MW overseas ground power plant project in 2023, achieving the “Tongwei Component” brand to sail across six continents.
Increase holdings, repurchases, dividends, and attach great importance to the interests of small and medium-sized shareholders
In order to demonstrate the company’s confidence in the future development space of the industry and its comprehensive competitive advantage, despite the pressure of short-term adjustments in the photovoltaic industry, Tongwei Shares has successively launched a series of “combination punches” such as a major shareholder increase of 1-2 billion yuan, a repurchase of 2-4 billion yuan by listed companies, and a total cash dividend of over 4 billion yuan in 2023, actively responding to the call of the new version of the “National Ninth Article” and injecting a “booster” into small and medium-sized shareholders.
On the basis of continuous years of rapid growth, the global photovoltaic installed capacity has once again exceeded market expectations in the past year, with a global installed capacity of 444GW. Since the beginning of this year, China’s newly installed capacity has maintained a strong growth trend. According to data from the National Energy Administration, China added 45.74GW of photovoltaic installed capacity from January to March, a year-on-year increase of 35.89%; With the accelerated clearance of the industry, the photovoltaic industry is expected to present a market pattern of constant strength in the future. As a leading global enterprise in high-purity crystalline silicon and solar cells, Tongwei Co., Ltd. has a significant integrated competitive advantage, and its performance in future business performance and valuation is worthy of sustained market attention.