China’s leading silicon wafer and component company, Longi Green Energy, released its semi-annual report for the first half of 2024 on June 30th, revealing a net loss of 5.2 billion yuan (RMB) for the first half of the year, a 157% decrease in net profit compared to the same period last year. Currently, the entire photovoltaic industry chain prices have fallen below production costs.
In the evening of the 30th, the financial report released by Longi Green Energy for the period from January to June of this year showed that the company achieved operating income of 38.529 billion yuan in the first half of 2024, a year-on-year decrease of 40.41%. The net profit was a loss of 5.243 billion yuan, whereas in the same period of 2023, the net profit was 9.178 billion yuan. The earnings per share were -0.69 yuan, the return on equity was -7.71%, operating cash flow per share was -0.8463 yuan, and the sales gross profit margin was 7.66%.
Longi Green Energy stated that in the first half of the year, there was an intensified mismatch between supply and demand in the photovoltaic industry, with primary industry chain prices further declining and falling below the company’s cost line. As a result, the company experienced a net loss during the reporting period, and businesses within the industry are facing operational difficulties.
It’s not just Longi Green Energy; the entire photovoltaic industry in China is under pressure. According to Caixin’s report on August 30th, major photovoltaic companies announced their financial performance late in the evening. Among them, silicon material leader Tongwei Co. incurred a loss of 3.1 billion yuan, a 124% decrease from the previous year, while module manufacturer JA Solar Technology recorded a loss of 870 million yuan, a 118% decrease.
Even profitable enterprises have experienced significant declines in performance. Module manufacturers JA Solar Energy and JinkoSolar Technologies respectively earned profits of 1.2 billion yuan and 530 million yuan in the first half of the year, with profits decreasing by 69% and 85% respectively.
Caixin reported that since the beginning of this year, oversupply in the photovoltaic industry has intensified. The primary industry chain of photovoltaic manufacturing includes silicon materials, silicon wafers, solar cells, and modules. According to statistics from the China Photovoltaic Industry Association, prices in the industry chain for silicon materials, silicon wafers, solar cells, and modules have fallen by 40%, 48%, 36%, and 15%, respectively, compared to the beginning of the year.
Tongwei Co. stated in its financial report, “Prices in various segments of the photovoltaic industry chain have hit historic lows, completely breaking through companies’ cost lines, leading to widespread industry losses.” Furthermore, some less competitive companies have gradually suspended or reduced production due to insufficient orders, inventory backlogs, and financial constraints.
Affected by the continuous decline in industry chain prices, photovoltaic companies have significantly recorded impairment losses on assets. In the financial reports released on the 30th, the five leading companies accounted for a total impairment of billions of yuan. Longi Green Energy and Tongwei Co. recorded impairments of 5.8 billion yuan and 2.4 billion yuan respectively, while JA Solar Technology, JA Solar Energy, and JinkoSolar Technologies each recorded asset impairment losses of 430 million yuan, 580 million yuan, and 520 million yuan.
Several industry insiders revealed that the entire photovoltaic industry is currently experiencing a cash hemorrhage at all levels, and it remains uncertain whether production capacity can be cleared by the end of the year to achieve supply-demand balance. At present, industry chain prices have fallen below production costs, with the possibility of further decline in module prices. Moreover, in the market, factors such as low bidding prices, inefficient products, and excess inventory have led to price declines, continuously disrupting market trends and making it difficult for module prices to recover.
Public data shows that Longi Green Energy was established in 2000 and is located at 388 Aerospace Middle Road, Chang’an District, Xi’an City. It is primarily engaged in research, production, and sales of monocrystalline silicon rods, wafers, cells, and modules. It has since developed into the world’s largest enterprise mainly focused on the production of monocrystalline silicon wafers and modules. The company has a registered capital of 7.578 billion yuan, with Li Zhenguo serving as the legal representative.
According to Tianyancha’s big data, Longi Green Energy Technology Co., Ltd. has invested in a total of 35 external enterprises.