Jolywood\’s first single-quarter loss since 2022 terminates investment in 14 billion silicon-based projects

At a time when the price of the main photovoltaic industry chain (silicon industry chain) has fallen, causing losses across the board, Jolywood Holdings (rights protection) (300393.SZ)\’s first-quarter operating income was cut in half, and its net profit attributable to the parent company suffered its first loss in a single quarter since 2022.
The company also halted the 14 billion yuan photovoltaic silicon-based production expansion project.
On the evening of April 24, Jolywood announced that it had decided to terminate a silicon-based project with an estimated total investment amount of 14 billion yuan. The project\’s original planned production capacity was 200,000 tons of industrial silicon and 100,000 tons of high-purity polysilicon per year.
Since the beginning of this year, prices in the main photovoltaic industry chain have continued to decline, with product prices in all links approaching the corporate loss line. Among them, silicon material prices are in a rapid downward stage as a whole, falling below corporate production costs and reaching the cash costs of some companies.
A relevant person in charge of a head component factory told reporters that in the first quarter, except for N-type batteries, almost all links suffered losses, and only a few leading companies were able to maintain their capital.
The prosperity of the photovoltaic industry is at its peak in 2022. Jolywood announced in March of that year that it planned to invest 14 billion yuan in the construction of silicon material projects. However, at the end of the first quarter of 2022, the company\’s monetary funds were only 2.09 billion yuan. There is a large funding gap.
After two years of delay, Jolywood stated that it decided to terminate the silicon-based project in consideration of changes in the industry environment.
Against the background of continued decline in product prices in the main photovoltaic industry chain this year, listed companies in the industry have generally slowed down their development pace, which is in sharp contrast to the rapid expansion of production in the past two years.
In the two years since Zhonglai\’s first silicon-based project announcement was terminated by the 14 billion silicon material expansion plan, due to the delay in the project\’s implementation and the decline in industry chain prices, the industry has entered the phase of clearing excess production capacity, and investors have expressed concerns about the project. Expectations for landing are gradually decreasing.
Even so, on April 26, Jolywood\’s share price still closed down 7.07%, with the largest intraday drop exceeding 11%, closing at 7.49 yuan, with a total market value of approximately 8.16 billion yuan.
Jolywood is mainly engaged in the research and development, production and sales of photovoltaic backsheets, N-type modules and cells. The original plan to invest in the construction of silicon materials was to move upstream of the industry.
According to the announcement, the silicon-based project is divided into two phases. The first phase is planned to invest in a project with an annual output of 200,000 tons of industrial silicon and an annual output of 10,000 tons of high-purity polysilicon. The second phase is planned to invest in a project with an annual output of 90,000 tons of polysilicon. The total investment The amount is estimated to be 14 billion yuan.
Among them, the first phase of the project will start construction after this agreement takes effect, and strive to be completed and put into production in 2024.
Regarding the reasons for the termination of the silicon-based project, Jolywood stated that after signing the investment agreement with the Gujiao Municipal People\’s Government and the Taiyuan Municipal People\’s Government of Shanxi Province, the company actively promoted the preparatory work for the silicon material project investment, but the project has not yet been implemented in the chemical industry park. Practical plan, the investment agreement failed to meet the conditions for taking effect, and at the same time, the market environment of the photovoltaic industry has undergone major changes, the feasibility of the silicon-based project has undergone major changes, and the company decided to terminate the project.
2022 is the year of silicon material. High-priced silicon material has caused the upstream link to \”swallow\” most of the profits of the industry chain, attracting the attention of many \”new players\” in the industry. However, the scenario of silicon material price falling by more than 70% in 2023 is These \”new players\” were unexpected.
The background for Jolywood\’s announcement to terminate its silicon-based projects at this time is that the main links in the photovoltaic industry chain have fallen below production costs.
Judging from the price of silicon materials, the decline continued during the year.
According to data from PVInfolink and the Silicon Industry Branch, silicon material prices fell again this week, with the decline widening month-on-month.
Among them, the average transaction price of N-type rod silicon was 49,200 yuan/ton, a month-on-month decrease of 6.29%; the average transaction price of P-type dense materials was 42,800 yuan/ton, a month-on-month decrease of 6.75%.
The Silicon Industry Branch stated that the current price of silicon materials has reached the cash cost of most companies, and has even fallen below the cash cost of some companies.
Although the price of silicon materials has been declining for many weeks, the current price decline is still less than expected by the downstream. The downstream continues to be bearish, and there is no sign of large-scale bargain hunting and stockpiling.
At the same time, downstream companies\’ early stockpiles have been basically exhausted, and some tentative orders have increased.
From the perspective of the entire industry chain, in the context of periodic oversupply, the main links from industrial silicon to components have fallen below production costs, and the market has shown irrational competition in the short term.
While announcing the termination of silicon-based projects due to losses in the first quarter, Jolywood released its 2023 annual report and 2024 first quarter report. In 2023, the price of the photovoltaic industry chain fluctuated violently, and the company\’s performance growth slowed down year-on-year. In the first quarter of this year, The revenue was cut in half and profits were lost.
The financial report shows that in 2023, Jolywood achieved total operating income of 12.259 billion yuan, a year-on-year increase of 28.01%, which was 64.56% in the same period last year; net profit attributable to the parent company was 526 million yuan, a year-on-year increase of 31.18%, which was 228.09% in the same period last year.
Jolywood stated that its performance growth was mainly due to the continued increase in the overall global demand for photovoltaic products and services last year, and as the iteration of P-type and N-type technologies accelerated, the demand for N-type high-efficiency products continued to rise.
In terms of products, Jolywood\’s module products will achieve operating income of 4.454 billion yuan in 2023, accounting for 36.33% of revenue, with a gross profit margin of 12.74%, a year-on-year increase of 7.48 percentage points; photovoltaic application systems will achieve revenue of 4.583 billion yuan, accounting for 36.33% of revenue. The revenue proportion was 37.39%, and the gross profit margin level was basically the same as the previous year; the battery and backplane achieved operating income of 480 million yuan and 2.305 billion yuan respectively, and the gross profit margin of the backplane decreased by 6.39 percentage points year-on-year.
In terms of N-type products, Jolywood\’s annual report disclosed that the company\’s TOPCon components and batteries achieved sales revenue of 4.934 billion yuan, with a gross profit margin of 12.53%, of which battery sales volume was 800.12MW and component sales volume was 2651.18MW.
The reporter noticed that Jolywood\’s N-type production capacity has not yet reached full production, and the company\’s second phase 8GW project of the company\’s annual 16GW high-efficiency monocrystalline battery smart factory project is under construction.
At a time when photovoltaic production capacity is overcapacity and the main industry chain is experiencing comprehensive losses, the inventory levels of listed companies have attracted much attention from the market.
As of the end of 2023, Jolywood\’s photovoltaic backsheet and battery inventories have increased significantly compared with the same period in 2022.
Among them, backplane inventory was 12.5027 million square meters, a year-on-year increase of 42.84%; battery inventory was 566.53MW, a year-on-year increase of 156.76%; module inventory decreased slightly by 4.53% year-on-year to 335.74MW.
As for the reasons for the increase in backplane and battery inventories, Jolywood stated that they are all due to reasonable stocking based on product shipment trends.
In the fourth quarter of 2023, Jolywood\’s performance has shown a downward trend from the previous quarter. In the quarter, the company achieved operating income of 2.518 billion yuan, a year-on-year increase of 28.97%, a year-on-year decrease of 36.72%; a net profit attributable to the parent company was 43.0093 million yuan, a year-on-year decrease of 26.22% , a month-on-month decrease of 82.6%; the net profit attributable to the parent after deducting non-profit items was a loss of 51.4055 million yuan.
In the first quarter of this year, Jolywood\’s operating income decreased by 52.43% year-on-year to 1.288 billion yuan, setting the lowest level of single-quarter revenue since the third quarter of 2021; net profit attributable to the parent company lost 172 million yuan, a year-on-year decrease of 268.11%, excluding non-profit The net profit attributable to the parent company was a loss of 193 million yuan, a year-on-year decrease of 253.67%, both the first losses in a single quarter since 2022.
At the same time, Jolywood\’s gross sales profit margin and net profit margin in the first quarter were -3.28% and -13.95% respectively, and the net cash flow from operating activities was 148 million yuan. The three core indicators reflect the impact of the sharp decline in the industrial chain on profitability and cash flow. Influence.
In terms of stock price, Jolywood has experienced a \”double kill\” in performance and valuation. The company\’s stock price fell by 30.04% in 2023 and has continued to fall by 27.56% since this year.
In the past two years, Jolywood was once a hot \”bull stock\” in the photovoltaic sector. The company\’s stock price started to rise from around 6.5 yuan (previously reinstated, the same below) in early June 2021, reaching a record high of 24.85 yuan in mid-March 2022. , and then entered the callback stage, with the maximum retracement reaching 71.3%.
In the first quarter of this year, Huatai-Pineridge CSI Photovoltaic Industry ETF and Tianhong CSI Photovoltaic Industry A reduced their holdings of Jolywood shares by 605,900 shares and 281,700 shares respectively.
(Source of article: China Business News)