Throw 46.5 billion! Jingao Technology is betting on the “vertical integration” of the whole PV industry chain

“The single-watt gross profit rate of silicon+cell+module integration is 43% and 118% higher than that of cell+module integration and module specialization, respectively.”
Author: Eric
Editor: tuya
Product: financial graffiti (ID: caijingtuya)
After a week, Jing’ao Technology again increased its PV integration.
According to the company’s intelligence expert “Financial Graffiti”, on the evening of November 23, Jingao Technology (002459. SZ) released an announcement that the company plans to invest 7.44 billion yuan in the construction of Yangzhou 10GW high-efficiency battery project (new), Qujing Phase IV 10GW battery and 5GW module project.
Source: company announcement
As of the close on November 23, Jingao Technology rose 7.49% to 58.68 yuan/share, with a total market value of 138.2 billion yuan.
The total output expansion for seven times in the year was 46.5 billion yuan
According to the statistics of Financial Graffiti, this is the seventh large-scale expansion of Jingao Technology since this year, involving up to 46.539 billion yuan of funds, including three single investments of more than 10 billion yuan. It is worth noting that the investment projects of Jingao Technology are all capacity expansion around “photovoltaic integration”.
Source: Financial graffiti
As of the third quarter of this year, Jingao Technology’s shipments reached 27.1 GW, ranking fourth among domestic photovoltaic enterprises, lower than 30 GW of Longji Green Energy (601012. SH), 28.79 GW of Trina Solar (688599. SH) and 28.5 GW of Jingke Energy (688223. SH). According to the company’s capacity planning, by the end of this year, the module capacity of Jingao Technology will reach 50 GW, and the capacity of silicon chip and battery will be about 80% of the module capacity; By the end of 2023, the company is expected to produce more than 75GW of silicon wafers and batteries.
The investment amount of 46.539 billion yuan since this year has exceeded the total revenue of Jingao Technology of 41.3 billion yuan last year. Where does such a large amount come from? The answer is to borrow money.
From the third quarter of 2022, the company’s notes and accounts payable amounted to 21.407 billion yuan, and the asset-liability ratio has reached 63.37%. At the same time, Jing’ao Technology also plans to publicly issue A-share convertible corporate bonds, raising no more than 10 billion yuan for projects such as crystal pulling, slicing, batteries, modules and supplementary working capital. The company has received the Notice on the First Feedback on the Review of Administrative Licensing Projects of the CSRC on November 4.
Of course, Jingao Technology is not the only one that has raised debt to expand production. Almost all the head photovoltaic enterprises are expanding production. In February this year, Tongwei Shares (600438. SH) issued 12 billion convertible bonds, of which 8.5 billion was used to expand production capacity; In the same month, Longji Green Energy issued 7 billion yuan of convertible bonds to expand production capacity; In September, Trina Solar revised its new convertible bond financing plan and raised 8.865 billion yuan for the 35GW/a Czochralski single crystal project.
Why do these photovoltaic enterprises focus on high liabilities and expand their capacity?
Bet on “integration” to achieve cost reduction and efficiency increase
In the past two years, there has been a “photovoltaic boom” in the world, and the track is becoming crowded gradually.
In order to reduce costs and increase efficiency, each photovoltaic enterprise has its own magic.
Is it to focus on “specialization” of a single product or to choose “vertical integration” of the whole industrial chain? Many enterprises gave the answer and bet on the latter.
The “integrated” industry can better balance profits and ensure supply, especially when the price of silicon continues to rise, the cost pressure continues to be transmitted to downstream battery and module manufacturers. Therefore, for front-line component enterprises, it is critical to have upstream and downstream capacity. Self-built capacity of battery chips, even silicon chips and silicon materials can enable the company to gain advantages in the profit distribution of the industrial chain, which is conducive to improving the profitability of terminal components.
According to the calculation of Anxin Securities, the gross profit per watt of silicon+battery+module integration is 43% and 118% higher than that of battery+module integration and module specialization respectively. Jingao Technology also chose to focus on the integrated construction of silicon chips, batteries and modules.
At present, photovoltaic cells are at a critical moment of technological transformation, and Jingao Technology focuses on the TOPcon technology route of N-type cells.
In the communication with institutions, Jingao Technology said that Topcon is relatively mature and is currently promoting large-scale mass production plans. At the same time, the heterojunction has the possibility of mass production in 2-3 years.
This year, the DeepBlue 4.0X, a new generation of N-type high-efficient components, launched by Jingao, has an average battery conversion rate of 25%.
According to the semi-annual report, Jingao Technology is expected to have an n-type capacity of more than 27GW in 2023, accounting for about 30% of its component shipments, and become one of the first enterprises in the field to put into production. GF Securities believes that the integrated enterprises are expected to fully benefit from the performance flexibility brought by the profit recovery and the shipment volume exceeding the expectation, and continue to expand their advantages in terms of cost, channel and brand. The concentration of the component industry will continue to increase, and the integrated leading enterprises in the industry will accelerate the monopoly.
In the first three quarters of this year, Jingao Technology achieved a revenue of 49.324 billion yuan, up 89% year on year; The net profit attributable to the parent company was 3.29 billion yuan, up 150.66% year on year. The net profit increased year on year, surpassing the component head companies such as Longji Green Energy and Trina Solar. According to the estimation of relevant people, the net profit per watt of Jingao Technology in 2022H1 was 0.109 yuan/W, an increase of 0.024 yuan/W over the whole year of 2021.