Tongwei's Yang Mou
Author | EastlandHead Picture | Vision China, Liu Hanyuan, Chairman of the Board of Directors of Tongwei Group, interviewed by the mediaWith the release of production capacity, the price of silicon materials is rapidly declining. In early June (2023), the price of single crystal dense materials dropped to the integer level of 100 yuan/kg
Author | Eastland
Head Picture | Vision China, Liu Hanyuan, Chairman of the Board of Directors of Tongwei Group, interviewed by the media
With the release of production capacity, the price of silicon materials is rapidly declining. In early June (2023), the price of single crystal dense materials dropped to the integer level of 100 yuan/kg.
The decline in silicon material prices is beneficial for most participants in the photovoltaic industry.
The first is the end user. From January to April 2023, the installed capacity of domestic photovoltaics increased by 186% year-on-year to 48GW; Component exports increased by 41% year-on-year to 69GW.
Next is downstream manufacturers. As the price reduction of silicon chips, batteries and components is less than that of silicon materials, the Gross profit rate of relevant manufacturers has increased.
Silicon material manufacturers will experience differentiation. Tongwei Co., Ltd. (600438. SH)'s silicon material sales profit has decreased, while the supply of technology that is not advanced enough, scale is not large enough, and cost is not low enough will be eliminated.
In 2022, Tongwei will "defy the world's great misconduct" and integrate downwards. In 2023, the Gross profit of component business may increase by an order of magnitude# Damage inside the embankment and compensation outside the embankment#
High difficulty diversification
In 2006, Tongwei Group entered the photovoltaic industry.
In 2015, Tongwei Shares acquired "Tongwei New Energy" and "Yongxiang Shares" (mainly engaged in silicon materials) for a total consideration of 2 billion yuan, to be paid for by issuing 230 million shares.
In 2016, Tongwei Shares issued 920 million shares and acquired 100% equity of "Hefei Tongwei" (mainly engaged in photovoltaic cells) for a consideration of 5 billion yuan. In addition, Tongwei Co., Ltd. also raised supporting funds of 3 billion yuan through targeted issuance. According to business commitments, Hefei Tongwei's net profit from 2016 to 2019 reached 390 million, 600 million, 770 million, and 820 million, respectively.
In 2017, the revenue of batteries/components was 6.4 billion yuan, high-purity silicon (polycrystalline silicon) 3.2 billion yuan, and photovoltaic power 800 million yuan, totaling 9.2 billion yuan, accounting for 35% of the total revenue (offsetting internal transactions in the photovoltaic sector of 1.07 billion yuan).
In 2019, the revenue of battery/component modules was 12.27 billion, high-purity silicon 5.18 billion, and photovoltaic power 1.1 billion, totaling 17.1 billion, accounting for 46% of the total revenue (offsetting 740 million internal transactions in the photovoltaic sector).
From 2021 to 2022, the photovoltaic business exploded significantly. In 2022, the revenue of batteries/components reached 53.5 billion yuan, high-purity silicon 61.8 billion yuan, and photovoltaic power 1.65 billion yuan, totaling 109 billion yuan, accounting for 77% of the total revenue (deducting 7.2 billion yuan from internal transactions in the photovoltaic sector).
In 2022, Tongwei's battery/module revenue and silicon material revenue increased by 13 times and 29 times respectively compared to 2016.
In its "Gree Experience Report" on May 30, 2023, Tiger Smell divided diversity into three difficulty levels:
Elementary level: Relying on existing equipment, technology, and channels to launch new categories, it is the least difficult diversification, known as "concentric diversification". For example, mobile phone manufacturers make tablets.
Intermediate: Utilizing scale and volume to expand business upstream or downstream of the industrial chain, known as "vertical integration". For example, Gree and Midea are both involved in businesses such as compressors and industrial robots.
Advanced: No technology/talent accumulation, no related production capacity, no brand/channel. It can be called "three no cross-border" diversification. Weitong, which started with feed, and BYD, which started with rechargeable batteries, are rare successful cases.
Production capacity "three shortages and one"
The photovoltaic industry is roughly divided into four major links: silicon materials, silicon wafers, batteries, and components. Tongwei starts with silicon materials and simultaneously lays out batteries. The component business did not begin to develop until the second half of 2022. Only in the silicon wafer segment, due to the dominance of TCL Central and Longji duopoly, Tongwei has not entered on a large scale for the time being.
Silicon material
In 2017, as soon as the production capacity of polycrystalline silicon increased to 20000 tons, Tongwei launched two "50000 ton crystalline silicon projects" in Leshan and Baotou. In 2020, Tongwei's single crystal silicon production capacity reached 80000 tons and projects such as Leshan Phase II and Baotou Phase II were launched (with a planned production capacity of 150000 tons).
At the end of 2022, the production capacity of crystalline silicon was 260000 tons, and 320000 tons were under construction;
By the end of 2023, the production capacity of crystalline silicon will reach 380000 tons (with a single crystal rate exceeding 99%). In addition, two 200000 ton projects in Inner Mongolia and Yunnan (with Longji participation) have been announced.
According to the plan,2026Silicon material80~100
Photovoltaic cells
2017Photovoltaic cells5.4GW50%~60%
2018Photovoltaic cells12GW
20212022Photovoltaic cells45GW70GW18295%
2023Photovoltaic cells80GW~100GWBy 2026, it will reach 130GW~150GW.
Tongwei is by no means a player who "buries his head in pulling cars, doesn't look up at the road", or blindly expands production capacity.
Photovoltaic cells182mm95%NPERCNPhotovoltaic cellsTOPConHJTTOPCon202325GWHJTXBC/IBCABC
assembly
2022H2assembly14GW7.94GW
assemblySilicon materialSilicon material
2023assembly80GW
2022assembly48GW2023assembly130GWIn 2023, Tongwei's shipments will exceed Longji's in 2022, with a production capacity of 60% at the end of the year.
The technology is slightly inferior to that of TCL Central, and the scale is closely pursued by Tongwei, putting a lot of pressure on Longji.
'Davis Double Click' is not an accident
2021Silicon material1022%CPIA
2022Silicon material138%25.799%30%
2022Silicon materialSilicon material
2022Silicon material240/24/202138.3%
202248GW37%assembly7.94GW226%55.9GW60%
2022/assembly0.96/34%Silicon material4assembly14%20217%assembly
2023'Davis Double Click' is not an accident20192020Silicon material2022
Gross profit rate in extreme cases
1Silicon material
2019Silicon material81/28%202075/735%
Silicon material202246575%
/assemblySilicon material20225510%202220194Silicon materialassembly
2023Silicon material61002020Silicon material7535%2023Silicon material2020487000 tons shipped in 2020Silicon material40%
2/assembly
/assemblySilicon material202135GW0.71/9%
2022/assembly0.96/10%
2022544Silicon material46585.5%/assembly5510%
/assemblySilicon materialSilicon material
Silicon material/assemblySilicon material
2023Silicon materialassemblyassembly400%
142023assembly202210
*The above analysis is for reference only and does not constitute any investment advice
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