On March 28, GCL-Poly released its annual report for 2021. During the reporting period, the operating income of the company was 19.698 billion yuan. The profit from photovoltaic materials was 5.534 billion yuan, with 5.084 billion yuan as net profit attributable to the parent company. The company has significantly turned loss into profit compared with the previous year and achieved the best performance in history.
A set of data is worth noting. According to the annual report, GCL-Poly spent over 1 billion yuan on R&D, about twice that of 2020. At the same time, the asset liability ratio fell below 50%, and the financing cost was only 60% of that in 2020.
In this regard, a source from GCL-Poly said, "in 2021, while the company achieved good performance, the R&D investment rose significantly, with decreasing debt ratio and financing cost. The company now has better R&D capabilities, healthier financial situation, and more advantage on zero carbon production, which laid a solid foundation for the company’s long-term development".
Profit of PV material business reached a record high
GCL-Poly's photovoltaic materials business achieved a profit of 5.534 billion yuan, creating the best performance since its listing.
According to GCL-Poly, in 2021, despite the adverse factors such as the sharp fluctuation of raw material prices, energy costs and the phased shortage of energy, the demand of the solar industry continued to grow significantly amid the global clean energy transition. Low carbon solar materials are favored by customers and will continue to be in high demand with its excellent carbon footprint performance.
It is worth noting that the gross profit of GCL-Poly reached 7.348 billion yuan, a record high in recent years, and the gross profit margin also reached 37.3%, which was significantly higher than 25.6% in 2020 and 24.3% in 2019.
In particular, the gross profit margin of PV materials increased by nearly 10 times.
The external reason is the short supply of high-quality silicon materials throughout 2021 and the unprecedented prosperity of the solar industry. According to the data disclosed by China Photovoltaic Industry Association (CPIA), silicon material price increased by 177% in 2021.
"In the past year, the downstream enterprises have expanded rapidly, while the expansion of silicon material makers is relatively slow, resulting in the tight supply of silicon materials." A senior analyst told us, "GCL-Poly adjusted its strategy at the beginning of last year to focus on silicon material, which was in line with the need of the solar industry."
The effect of this strategy is particularly obvious in its report. The revenue from polysilicon sales was 2.3 billion yuan and 2.2 billion yuan in 2019 and 2020 respectively, but increased by 170% year-on-year in 2021, reaching nearly 6 billion yuan.
The core internal reason is the increase in the output of granular silicon and its high-tech and significant low-cost advantages.
In November 2021, on top of its production capacity of 10,000 tons, GCL-Poly's new 20,000-ton granular silicon facility was put into operation.
GCL-Poly said that in 2021, its granular silicon output accounted for 18% of the company's total silicon material output. FBR granular silicon with high-tech, low-cost and low-carbon footprint has gradually revealed its profit advantages. Its gross profit margin is more than 15% higher than that of silicon rods.
Polysilicon production capacity may reach 360,000 tons, a record high
According to the annual report, GCL-Poly's polysilicon output in 2021 was about 104,500 tons, an increase of 40.5% compared with 74,400 tons in the same period in 2020.
In 2022, the company will keep the momentum and witness a jump in production capacity.
At present, the 30,000-ton FBR granular silicon facilities have fully reached the designed capacity. New projects have been put into operation in Xuzhou, Leshan and Baotou. It is expected that the production capacity of all silicon materials will reach 360,000 tons by the end of this year.
In addition to GCL-Poly, many leading silicon material makers will have new facilities put into operation in 2022. It is predictable that the silicon material supply will increase rapidly.
However, many insiders told us that considering the strong demand and the slow ramp up of polysilicon production, the silicon material will remain the bottleneck in the whole solar value chain in 2022.
Newly-added capacity is not enough to reverse the supply and demand imbalance in the short term. The short supply will persist until at least the end of the third quarter, and the price will remain above 220 yuan/kg.
"According to the current price, the newly-built production capacity can basically recover the capital in one year. If GCL-Poly's 360,000-ton production capacity can be put into operation this year, the cost advantage will be more obvious and the profit will be considerable, which will be far higher than that in 2021," an insider said.
