Winter is coming!

　　Although photovoltaics contributed over 142GW of new installed capacity in the first ten months, for some photovoltaic manufacturing companies, the cold winter seems to have already enveloped them.

　　The gradually released third quarter financial reports may also prove this point. Overall, in the first three quarters, the net profits of silicon materials and silicon wafer companies have declined; Component companies maintained growth in the first three quarters, but their revenue and net profit slowed down compared to last year, with some top companies experiencing a 40% -68% decline in net profit.

　　In the explanation of performance changes, the fluctuation of industry chain prices is the reason for the unsatisfactory performance of most enterprises. At present, the price of silicon materials is still in a downward trend, and there is a trend of falling below 60000 yuan/ton. The lowest price of single crystal cauliflower materials has reached 57000 yuan/ton.

　　Transferred to the component stage, the winning bid price of the component has significantly decreased from 1.8 and 1.98 yuan/W at the beginning of the year. Recently, Three Gorges Group's centralized procurement of 2.1GW components in Hami, Xinjiang has resulted in enterprise quotations almost entirely below 1 yuan/W, with the lowest reaching 0.943 yuan/W.

　　Retreat signal?

　　In contrast to the price decline trend, there are signs of a decline in the previous rapid expansion of production.

　　From an upstream perspective, Daquan Energy previously announced the postponement of its wholly-owned subsidiary's Phase II 100000 ton high-purity polysilicon project, which was originally scheduled to start production by the end of this year, to the second quarter of 2024.

　　Compared to project delays, some cross-border enterprises have temporarily suspended project financing or even directly exited their photovoltaic business.

　　On August 1st, Qianjing Garden announced the proposal to terminate the company's issuance of A-shares to specific targets in 2022 and withdraw the application documents. Previously, the company announced plans to raise 469 million yuan, mainly for the production of 1GW high-efficiency heterojunction batteries and 2GW high-efficiency heterojunction solar modules.

　　On the evening of August 11th, Letong Corporation disclosed that it will significantly reduce its investment in heterojunction battery projects, with the investment amount reduced from 100 million to 12.5 million.

　　At the end of September, Sunflower announced that it had terminated its contract with Jiejia Weichuang to purchase equipment for its original investment in TOPCon (Tunneling Oxide Passivation Contact) solar cell project.

　　On October 19th, in its response to the inquiry letter from the Shenzhen Stock Exchange, Emperor Group stated that considering TOPCon batteries are a heavy asset investment and still require significant investment in the future, and the current industry competition is fierce, the company has decided to allocate limited resources to the core business of ensuring the company's sustainable development in the future. Therefore, the original project investment has been adjusted accordingly, and the control of its subsidiary Anhui Green Energy has been transferred.

　　On November 6th, Jingang Photovoltaic announced that it had decided to terminate the issuance of A-shares to specific targets in 2023, taking into account the company's actual situation, capital market and relevant policy changes. The company originally planned to raise no more than 2 billion yuan to invest in projects with an annual output of 4.8GW high-efficiency heterojunction batteries and 1.2GW modules.

　　In fact, the retreat of cross-border enterprises is influenced by the current prices of the photovoltaic industry chain, and their own competitiveness, overseas channels, brand building, etc. are not enough to compete with established photovoltaic enterprises. As a leading company once said, "The photovoltaic industry is not something that can be done well with money, it's far from that simple.".

　　On the other hand, in early November, the Shanghai and Shenzhen Stock Exchanges issued new regulations for optimizing refinancing, stating that "strict control should be exercised over the requirements for refinancing funds to be mainly invested in the main business. Listed companies must closely related their refinancing fundraising projects to their existing main business and have obvious synergy with their existing business after implementation. We urge listed companies to highlight their main business more, focus on improving the quality of their main business, and prevent blind cross-border and diversified investments."

　　After the introduction of new regulations, cross-border enterprises need to plan their financing and investment more reasonably, which obviously does not meet the requirements for some companies that come to ride the popularity of photovoltaics.

　　Industry integration is imminent

　　In the next two years, industrial integration under overcapacity will be the main theme. According to Bloomberg New Energy Finance's forecast, the global installed capacity of new photovoltaic units will be approximately 511GW in 2024, and approximately 727GW by 2030.

　　According to PVInfolink statistics, by 2024, the production capacity of silicon materials, silicon wafers, batteries, and modules in China's main photovoltaic industry chain will all exceed 1TW. In addition, the supply of main auxiliary materials such as glass and adhesive film backboards is relatively loose.

　　This means that competition between enterprises in the industrial chain will further intensify. Especially in the component sector, according to statistics, only the top 10 enterprises have a total component production capacity of nearly 800GW by 2024, which can fully meet the market demand of over 500GW. Enterprise competition will become increasingly fierce.

　　According to statistics, the difference in shipment volume between the top 4 companies and the fifth ranked companies last year was 18-25GW. According to this year's shipment target prediction, the gap will further expand to 30-40GW, and the more obvious difference is that the shipment volume between the first and tenth ranked companies may be nearly 60GW.

　　Under the constant strength of the strong, the test for second and third tier enterprises is even more severe, especially for enterprises that have not established integrated production capacity. According to media reports, in early November, Wood McKenzie reported that non integrated component manufacturers had almost equal market prices and manufacturing costs as of the third quarter of 2023, with no profit margin left.

　　On the other hand, the top companies in the integrated camp not only have industrial advantages in the silicon material silicon wafer battery component link, but also have layout in the auxiliary materials and equipment end, with obvious comprehensive advantages.

　　From the recent bidding results, it can be seen that since November, the winning companies in the large-scale component procurement of central enterprises have all been the top 10 enterprises. Even though some third tier companies offered low prices during the bid opening stage, considering factors such as actual supply capacity, the top companies ultimately won.

　　Under fierce competition, some second - and third tier enterprises have lowered their shipping targets, and it is expected that their shipments will still show a "polarization" situation this year.

　　Under this trend, large enterprises will integrate resources through acquisitions, mergers, and other means to form a scale advantage. To escape the fate of "big fish eating small fish", small and medium-sized enterprises also need differentiated products, differentiated market layout, and find their own survival space.