Will the hot porridge of photovoltaic be burnt?

standing outside and looking inside is like looking at a cocoon. Layers of information wrap the real situation of the industry round and round, so that no one knows whether it will be a butterfly or a bug flying out of it.".

Today, this cocoon has been torn open by Hengdian Dongci . On the evening of October

23, Hengdian Dongci released a record of recent investor relations activities. There was a lot of information, but none of it was as important as this sentence: " (The company) originally expected a shipment target of 8-9 GW this year at the beginning of the year, and now it is expected that the annual shipment will be appropriately revised down to about 7 GW .".

And this sentence, in my opinion, just conveys a signal, a bad signal -behind the prosperity of hundreds of gigawatts of production capacity in the industry, the hidden crisis is breaking out from the second-and third-tier enterprises. It's being burnt .

Why to say so, the reason has these points:

The first line enterprise has the fund to take the lead to expand the production, does not have the fund to be able to melt the money to expand the production through the brand superiority in the capital market. Compared with the second and third lines, most of the capital and financing capacity can not be compared with the first line, and a large part of them are left behind at the starting line.

After a year of expansion in the industry, overcapacity has become an established reality . By the end of this year, the production capacity of Jingke, Longji, Tianhe, Jingao and Atlas alone will exceed 480 GW, accounting for nearly 60% of the national production capacity.

In addition, the remaining more than 90% of the enterprises that have been attracted by the tide of photovoltaic wealth have only occupied less than 40% of the production capacity . What did the

expansion of production bring about?

Statistics show that Longji, Jingke, Tianhe, Jingao, Atlas and other first-line enterprises shipped 44.76 GW, 44.33 GW, 43.09 GW and 38

respectively in 2022. This volume is expected to increase to 85 GW, 70-75 GW, 65-70 GW, 60-65 GW and 30-35 GW, with year-on-year growth exceeding 30% or even doubling . Among

them, Jinko and Tianhe even announced an increase in the shipment target during the Zhongbao period.

First-tier enterprises are eating meat in large quantities. What are second-tier and third-tier enterprises doing? In terms of shipments

alone, there is a huge fault between the first line and the second and third lines. Yidao Xinneng and Hengdian Dongci are expected to ship 15-20GW and 9GW components respectively in 2023; Suntech Power, Xiexin Integration, Yijing Optoelectronics and other companies did not announce, but the shipments in the first half of the year were only 6GW, 5G W, 2.3-2.

In the key data of shipments, the gap between the first line and the second and third lines is enough to fill "more than one second and third lines" .

This means that the first-line enterprises have taken most of the soup through capacity expansion, and the enterprises behind will face a more limited market and more intense competition.

2. Admittedly, this is completely in line with the law of business development, but from the recent trend, there are signs of losing control.

On October 18, Huadian Group opened the bid for the third batch of centralized component procurement projects in 2023, offering a historic low price of 0. At the 24th Asia-Pacific Electricity Association Conference two days later, Liu Yuxi, president of Longji China Regional Department, pointed out that the price drop had formed a panic phenomenon. The product price of photovoltaic modules is already very low, if it falls below one yuan, it means that it has completely fallen below the cost price .

The same is true of silicon wafers, which ranked second in the profit list last year. On October 17, the Silicon Branch announced that the average price of all types of monocrystalline silicon wafers fell again that week, and most enterprises were near the break-even point . Some enterprises with backward technology and high cost of non-silicon have lost money .

This downward price trend has completely exceeded the reasonable range . Under

normal circumstances, the leading enterprises in the industry obtain excess profits higher than average profits of the industry through innovation, which will attract enterprises to join the ranks of innovation, and then drive the whole industry to reduce costs and increase efficiency, resulting in a decline in product prices.

But now the trend is completely the opposite, the rate of decline in product prices has far exceeded the rate of cost reduction brought about by technological innovation, which has led to the current product prices falling below the bottom line of most enterprises.

In this case, the leading enterprises that have completed the integrated layout can withstand the consequences of the transitional price drop of products through cost control, scale advantages and multi-business development, but for the second-and third-tier enterprises with weaker strength, they can still bear it in a short time, and in the long run, there is only one way to stop production, which is only a matter of time.

including but not limited to the following points:

First, there is no excess capacity. Over capacity is a fact, but not excess is "relative", this is really good, advanced capacity is always in a state of shortage, after all, once the current TOPCon has developed to the state of PERC in 2021, then advanced capacity will become HJT, BC or perovskite.

At present, through their own advantages in publicity, some enterprises constantly exaggerate that there is no excess capacity, which is actually using common sense to cover up the most real and most needed problems. An inappropriate analogy is that a young man can basically achieve food and clothing in the future, but it can not cover up the current situation that he is about to live on the street with a good dream in the future. Over

No financing means backwardness, and no expansion of production means being beaten. Among them, large enterprises have taken the lead. Jingao Technology and Hongyuan Green Energy have raised billions of yuan every year. Longji and Tongwei have increased by 20 billion yuan, and TCL Central has increased by 13.8 billion yuan. Shenzhen Stock Exchange has asked twice, and the reasons given can not be separated from the "industry trend".

Large-scale financing has brought about large-scale expansion of production, large-scale expansion of production has collapsed the stock price of photovoltaic enterprises, overdrawn investors'confidence in the industry, narrowed the financing channels of enterprises, and front-line enterprises can still rely on their own funds to promote business. However, the second and third-tier enterprises with relatively weak financial strength have borne the consequences .

year end, The media reported that the price of components was in a state of confusion, and now 10 months later, it is still in a state of confusion, the only difference is that it is in a lower price range. Since the second half of

this year, industry shuffling and corporate bankruptcy have been frequently mentioned in both domestic and European markets, but corresponding to this recession, until yesterday, the industry was still emphasizing that "in 2030 or sooner, the annual installed capacity of global photovoltaic will reach T watt (1000 GW) level."

So for an industry that has not yet reached its peak, is this situation not worth vigilance? -On the one hand, the industry generally believes that in the next 3-5 years, the industry will continue to expand the market space with an annual growth rate of at least 25% -30%; on the other hand, 60% -70% of the enterprises will be eliminated in this time, and only a few of them are miserable?

In the end

, there is no winner by pulling down the average profit of the industry and allowing a few enterprises to obtain "excess" profits. The cocoon of

photovoltaic needs to be transparent, and the demand industry is United.

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