Photovoltaic industry may bottom out

On January 29, Shi Lishan, Deputy Director of the New Energy and Renewable Energy Division of the National Energy Administration, stated at the global launch of the WWF Carbon Reduction Pioneer Project that China's photovoltaic "12th Five-Year Plan" installation target will be 21GW from the previously announced installed capacity. , again raised to 35GW. When the news came out, the domestic photovoltaic industry was boiling. A share of solar energy power generation plate rose across the board on the 30th, highlighting the market's expectation of a full recovery of the industry.

However, the market sentiment is soaring that it is difficult to cover the ups and downs of bankruptcy. Following the dismissal of the joint venture's joint venture PV subsidiary announced in September last year, Jiangsu Sunshine also announced on January 30 that its subordinate polysilicon company has filed for bankruptcy. According to statistics, there have been more than 350 companies that have stopped the bankruptcy of the photovoltaic industry since last year. From the performance forecast announced by each company, the A-share photovoltaic panel continued to follow the “loss” of 2011 in 2012, and the PV industry has a long way to really get out of the shadows.

The dawn of the terminal market In 2012, the industry generally reflected the “cold” year of the global photovoltaic industry. Europe and the United States, "double anti-", the domestic market is limited start-up, excess capacity in manufacturing, companies often present a debt crisis, photovoltaic market is almost "dead" edge. However, near the end of the year, there was a slight loss of industry in the industry. The Chinese government proposed a new policy of photovoltaic "rescue" and a new wave of surge in overseas emerging markets such as Japan and the United Kingdom. Warren Buffett announced that it will spend 10 billion yuan to invest in photovoltaic power plant projects for the third time. The “positive energy” of the industry has caused many industry insiders to expect the worst of the PV industry may be nearing completion.

As a matter of fact, as the future market for the “vital fields” of the photovoltaic industry, the successive introduction of favorable policies has highlighted the government’s efforts to boost confidence in the industry. This can be seen from the several upward adjustments of the PV "12th Five-Year Plan" installation target. According to the China Securities Journal reporter, in the "Twelfth Five-Year Plan for Renewable Energy Planning and Development" (Draft for Solicitation) prepared by the National Energy Administration in 2011, the photovoltaic "12th Five-Year Plan" installation target was set at 10 million kilowatts. In less than a year, the target figure was raised to 15GW and 21GW twice. The number of 35 GW figures was raised by 14 GW on the previous basis, and it was increased by 2.5 times on the basis of the initial 10 GW. Taking the current total cost of photovoltaic power plants at 10,000 yuan/kWh, this increase will add about 250 billion yuan to the photovoltaic power generation market. If the follow-up tariff subsidies and tax incentives are introduced and implemented, the market is expected to accelerate its release.

The target figure only boosts long-term confidence. As far as the current situation is concerned, the terminal demand for photovoltaic domestic and foreign markets has gradually begun to pick up. The signal from the fundamentals of the industry is full of warmth: Since January of this year, the prices of all photovoltaic products have ended in continuous decline for nearly 9 months, and there has been a rebound. Single-crystal silicon wafers and single-crystal cell wafer products have seen larger increases, the most upstream. The price of polysilicon also rebounded slightly.

The relevant market analysis shows that the domestic first-line enterprises currently have at least 80% operating rate, some of the first-line enterprises are full of production and there is a shortage of urgent orders and employment.

Shi Dingyao, director of the China Renewable Energy Society, told the China Securities Journal that large-scale photovoltaic power plants and distributed photovoltaic power generation systems each account for half of the 35GW installed capacity. The state will also continue to introduce policies to support the photovoltaic industry in response to the existing problems in the photovoltaic industry.

The tide of bankruptcy and production suspension is still surging. Despite frequent "positive energy" emission at the industry level, at the corporate level, the "spring tide" of market recovery is no match for the "backflow" of the company's suspension of production and bankruptcy.

On September 29, 2012, Vosges shares, which has already formed a considerable scale of photovoltaic manufacturers, suddenly issued a notice. Due to the sluggish industry and the continuous dive of product prices, the company’s subsidiary, AvtoSolar, has been unable to maintain its operations and has decided to liquidate and disband. At this point, Vosges became the first company to officially announce the bankruptcy of the photovoltaic business in the A-share photovoltaic sector.

Less than six months, Jiangsu Sunshine repeated the same mistakes. Jiangsu Sunshine announced on the 30th that due to the serious inversion of the production cost of its subsidiary Ningxia Sunshine Silicon, the insolvency of its capital, and the inability of production and operation, Jiangsu Sunshine has applied for the liquidation of Ningxia Sunshine Bankruptcy. Affected by the sunshine in Ningxia, Jiangsu Sunshine expects that the net profit attributable to the shareholders of the listed company in 2012 will be a loss.

According to the announcement, as of December 31, 2012, Ningxia Sun's book value totaled 1.399 billion yuan, total liabilities 1.445 billion yuan, and net assets -46.16 million yuan; in 2012, it had a loss of about 250 million yuan in January-December 2012, which is currently insolvent. .

In fact, the closure of Sunny Silicon Industry in Ningxia is just the tip of the iceberg in the photovoltaic industry. ENF Business Consulting has released tracking data for China's PV market in 2012. Due to overcapacity and falling selling prices, companies in the entire photovoltaic industry chain, from equipment manufacturing, silicon materials production to processing of battery modules, have been bankrupted and discontinued in China. More than 350 homes. Among them, 80% of the upstream polysilicon companies are still in production and closed down.

In addition to the bankruptcy wave of suspension of production, various photovoltaic companies shouted in 2012 that their performance was "losing". According to statistics of wind data, as of January 30, of the companies whose A-share photovoltaic power generation units have released 2012 full-year performance forecasts, only a few companies, such as Zhongli Technology, Tuoxin Xinneng and Lida Optoelectronics, enjoyed positive growth in net profit last year. Most companies are still in a state of continuous loss. The recent solar crisis that exposed the debt crisis has caused a miraculous recovery in its third-quarter performance in the downturn of the industry. Before the outside world could understand why, the company’s latest forecast is that it will have a loss of 900 million yuan to 1.1 billion yuan in 2012, and the net profit has fallen by nearly 20 times.

The analysis pointed out that although the current market has recovered, the good will be the first-line enterprises that still have the technical and cost advantages. Taking Yingli Green Energy as an example, the company's global order volume in 2012 ranks first in the industry. Its current biggest advantage lies in its low cost, and then maintains its profit through price advantage.

However, most companies are still in the period of decapacity, especially the polysilicon link where production and demand are seriously imbalanced. At present, 90% of the polysilicon enterprises in China are still in the production phase. If the market recovery effect cannot be delivered in time, these discontinued enterprises may still enter bankruptcy channels one after another. The next Jiangsu Sunshine may not be far behind.

The good policy is still to be refined, "half of the seawater and half of the fire." This sentence may be used to describe the huge contrast between the current photovoltaic terminal and the upstream manufacturing industry. It is worth noting that if the recovery of the terminal market cannot be passed on to the upstream manufacturing industry for a certain period of time, the entire photovoltaic industry may not be able to fully recover. Judging from the current situation, the process of de-capacity of the manufacturing industry will continue to exist, which also means that this year's annual PV market conditions are still "look at the fog."

Dongxing Securities analysts believe that global PV module shipments in 2013 will reach 30GW, an increase of 8% year-on-year. Although the global PV market demand will continue to grow steadily, the global PV production capacity has exceeded 50 GW, still greatly exceeding the overall market demand. Digestion of excess capacity is still not possible overnight.

In addition, the large-scale start-up of the domestic market is considered to be the life-saving straw for photovoltaics. However, if the over-reliance on the policy-supported photovoltaic industry is to achieve a further leap, it still needs detailed refinement of the early-stage favorable policies.

Solarbuzz Photovoltaic Analyst Han Qiming told the China Securities Journal that the current clear-cut rule is how much the amount of distributed photovoltaic power subsidy is set, which directly affects the enthusiasm of companies to participate in the development of distributed power generation projects. In addition, although construction of the western power station was very hot, the operation of the power station was not economical due to the repeated arrears of the Ministry of Finance's renewable energy price surcharge. If the Ministry of Finance does not further clarify the future financial support, it may suppress the profits of the downstream power plant operators, and then lead to the upstream power station development until the equipment supplier orders.

Taken together, the trend of the PV market rebounding this year after a series of positive factors has gradually become clear. There are no shortages of phased market and industrial chain investment opportunities. However, the overall recovery of the industry may have to be postponed until 2014.