China added 87.41 GW of solar in 2022, a year-on-year increase of 59.3%, according to National Energy Administration (NEA). Under the promotion of the “dual carbon” policy, the production of various links in the solar industry chain reached a historical high, with the capacity of polysilicon, wafers, cells, and modules reaching 827,000 tons, 357 GW, 318 GW, and 288.7 GW, respectively. The total industry output value exceeded CNY 1.4 trillion yuan.
The NEA also released data on the national power industry from January to March on April 23 that in the first quarter, the new installation of solar was 33.66 GW, up 154.81%, which has surpassed hydropower to become the second largest power source in the country.
According to financial data service provider Eastmoney, as of April 30, there were a total of 94 listed companies with their main business including solar business. In the 2022 annual report, their total revenue exceeded CNY 1.6 trillion yuan, among which, 26 companies have revenue exceeding CNY 10 billion yuan, and 25 have net profits exceeding CNY 1 billion yuan. TW Solar, Longi Solar, and Shanghai Electric have achieved operating revenue of CNY 142.4 billion yuan, CNY 128.998 billion yuan, and CNY 116.99 billion yuan, respectively.
Despite the strong rise of leading stocks in the industry, some solar companies are still struggling to make ends meet, a clear trend of polarization. Tunghsu’s total revenue for the year 2022 was CNY 3.04 billion yuan, down 21.7%, with net profit of CNY -309 million yuan. As a leading enterprise in raw silicon production, Hoshine Silicon experienced a slight increase in revenue but a significant decrease in net profit in 2022, with CNY 23.657 billion of operating revenue and CNY 5.14 billion of net profit.
In 2022, silicon material manufacturers are the absolute gainers and the biggest winner in the entire industry chain. The price of solar silicon material once exceeded a record 300,000 yuan/ton.
As for the four giants of silicon materials, GCL Technology, Daqo, TBEA, and TW Solar achieved a total revenue of CNY 306.057 billion yuan in 2022, a sharp increase of CNY 150.198 billion yuan compared to 2021. The average annual growth rate of non net profit deduction for the four enterprises reached 217.12%.
Silicon wafer manufacturers have brought the operating revenue to a total of CNY 300 billion yuan, up 90%, according to the annual report data disclosed by 11 relevant companies, including Longi Solar, TCL Zhonghuan, Shuangliang Eco-Energy, Shangji Automation, JYT Corp, and Solargiga etc.
TCL Zhonghuan, in particular, has made impressive performance. According to its annual report, the company achieved a revenue of CNY 67 billion yuan in 2022, up 63%, and the net profit attributable to shareholders of the listed company was CNY 7.07 billion yuan, up 59.5%.
Notably, the company’s performance has grown rapidly in the past three years, due to its continuous fundraising and production expansion. Since the completion of the mixed ownership reform in July 2020, the company has raised approximately CNY 5 billion yuan and CNY 9 billion yuan through fixed capital increases in August 2020 and November 2021, respectively, to expand production capacity.
On April 7, 2023, the company announced its plan to raise CNY 13.8 billion yuan through the issuance of convertible bonds for additional silicon wafer and cell projects, with a total of approximately CNY 27.8 billion yuan raised through three rounds of financing. Its operating revenue in 2022 far exceeded the sum of 2020 and 2021, and its net profit attributable to the parent company exceeded the sum of the four years from 2018 to 2021.
For major module providers, the net profits of Jinko Solar, Trina Solar, and JA Solar have all doubled. TW Solar, officially entered the module end in 2022, has been accelerating its vertical integration and realized shipments of 8 GW, up 226%, top 10 globally.
Industrial cross-over has been seen more frequently in 2022 and there are about 69 companies so far announced such completion, including traditional enterprises such as Haier, Midea, Country Garden and Poly. Insider believes that it’s not conducive to the development of the industry since they are aiming for quick money. Moreover, cross-border players often engage in “high salary poaching”, leading to a sharp increase in labor costs. Without refined management, it is easy to cause a crisis of disorderly development and even overcapacity.
