In 2024, Chinese photovoltaic enterprises experienced a general decline in performance with severe internal setbacks. Recently, two photovoltaic companies issued performance forecasts. Yi Jing Solar Energy Co., Ltd. expects to incur significant losses last year, while another photovoltaic company, Quartz Energy Co., Ltd., anticipates a more than 93% decrease in net profit compared to the previous year.
According to the announcement from Yi Jing Solar Energy Co., the company projected a net loss of 1.9 billion to 3.2 billion yuan in 2024, a significant shift from profit to loss compared to the same period last year, with the loss amount reaching the highest in the company’s history.
Looking at the quarterly breakdown, Yi Jing Solar Energy incurred a net loss of 572 million yuan in the first three quarters of last year. Based on this calculation, the company expects a loss of 1.328 billion to 1.728 billion yuan in the fourth quarter of 2024.
Regarding the loss in performance, Yi Jing Solar Energy explained that there was a temporary mismatch between photovoltaic production capacity and market demand, intensified market competition, continuous decline in industry chain prices, and a decrease in the overall gross profit and profit levels.
Furthermore, according to the announcement from Quartz Energy Co., the company estimated a net profit of 280 million to 340 million yuan for the fiscal year of 2024, representing a decrease of 93.25% to 94.44% year-on-year. The non-GAAP net profit is projected to be 231 million to 291 million yuan, a decrease of 94.21% to 95.40% compared to the previous year.
Explaining the reasons for the performance decline last year, Quartz Energy stated that the photovoltaic industry experienced significant market fluctuations and was impacted by the photovoltaic industry’s reduction in production capacity and inventory, along with a noticeable decrease in demand for photovoltaic quartz materials. In response to market changes and to mitigate bad debt risks, the company implemented a cautious sales strategy, leading to a substantial decline in its operational performance.
It’s worth mentioning that two leading upstream photovoltaic companies in China, Tongwei Co., Ltd. and Daqo New Energy Corp., both announced production cuts at the end of December 2024, shaking the entire industry. This move was dubbed by the industry as the “first horn against internal setbacks.”
Prior to this, under the organization of the China Photovoltaic Industry Association, dozens of photovoltaic companies signed a self-discipline convention to control production capacity.
In response, mainland Chinese capital industry veteran Xu Zhen told Dajiyuan that the problem of internal setbacks in the competition among photovoltaic companies is mainly determined by the characteristics of the industry. With China’s huge production capacity exporting to Europe and America, the market will quickly saturate after a period of time. If photovoltaic companies have serious production overcapacity, they will face fierce competition and internal setbacks.
Xu Zhen also mentioned another point: due to the abundant coal resources in Xinjiang, China, power generation costs are low, and polycrystalline silicon is mainly produced in the Xinjiang region. In order to sanction the Chinese Communist Party’s human rights abuses, the United States has prohibited the import of Xinjiang cotton and photovoltaic products, and the European Union is expected to follow suit. If this happens, a wave of bankruptcies in the mainland photovoltaic industry may soon emerge, which remains to be seen.