On the evening of April 29th, Tongwei Co., Ltd., a leading company in the photovoltaic industry, released its annual report for 2023. The report shows that the company's operating income was 139.104 billion yuan in 2023, a year-on-year decrease of 2.33%, and the net profit attributable to shareholders of the listed company was 13.574 billion yuan, a year-on-year decrease of 47.25%. Despite significant price adjustments in the photovoltaic industry chain in 2023 and increased competition, Tongwei Co. still demonstrated strong risk resistance and continued to be the most profitable enterprise in the photovoltaic industry.
Since the beginning of the first quarter, the photovoltaic industry has entered the traditional off-season, with industry chain prices continuing to bottom out. Affected by both supply-demand imbalance and low prices, the overall profitability of the photovoltaic industry in the first quarter has significantly declined compared to the same period last year. On the same day, Tongwei Co. disclosed its first-quarter report for 2024, with an operating income of 19.57 billion yuan, a year-on-year decrease of 41.13%, and a net loss attributable to shareholders of the listed company of -787 million yuan, a year-on-year decrease of 109.15%. Looking at the first-quarter reports disclosed by various photovoltaic industry leaders, it is evident that they are all currently facing pressure and adjustments, and the bottom of the industry chain profitability may rapidly approach.
The leading positions in "polysilicon + cell" are solid, and for the first time, the module have entered the top five globally.
Tongwei Shares continue to improve lean management level, expand cost advantages, and develop high-end production capacity layout, consolidating the company's global leading position in high-purity crystalline silicon and solar cell fields, dealing with the cyclical fluctuation risks of the industry, and demonstrating strong operational resilience. Over the past year, Tongwei Shares' photovoltaic business performance has been very impressive, further solidifying its leading position in "silicon materials + batteries." The annual report shows that the company's high-purity crystalline silicon production capacity achieved sales of 387,200 tons, a year-on-year increase of 50.79%, with a global market share of over 25%; cell sales reached 80.66GW (including self-use), a year-on-year increase of 68.11%; and module sales reached 31.11GW throughout the year, a breakthrough year-on-year increase of 292.08%.
Cost advantage is one of the key factors for Tongwei Shares' outstanding performance. In terms of silicon materials, the company has driven several consumption indicators to further decline, and the average production cost of high-purity crystalline silicon products has dropped to within 42,000 yuan/ton in 2023, significantly leading the industry average. Therefore, Tongwei Shares' high-purity crystalline silicon products still achieve a net profit of more than 45,000 yuan per ton even when the price is significantly reduced.
The improvement in production technology and processes has further expanded Tongwei Shares' cost advantage. In the field of solar cells, during the reporting period, Tongwei Shares' TNC cells, with the help of new technologies such as high square resistance dense grid and advanced metallization, have achieved the latest mass production average conversion efficiency of 26.26%. Combined with refined management experience, continuous optimization of production processes, and reduction of single consumption, the non-silicon cost has now dropped to about 0.16 yuan/W.
As the first full year of comprehensive layout of module business in 2023, Tongwei has achieved breakthrough growth in sales volume, reaching 31.11GW throughout the year, a year-on-year increase of 292.08%, and its shipment volume has entered the top five globally. The company's annual report shows that, relying on its own industrial chain quality, quantity, and supply assurance advantages, the company has successively won bids for several ground power station projects including China Resources Power, Three Gorges, and China Electric Construction, and has reached in-depth cooperation with major platform customers such as Skyworth, Rich Home, Aineng, and Sunshine in the distributed market. At the same time, in 2023, the company completed the signing of its first 100MW overseas ground power station project, realizing the "Tongwei Modules" brand to set sail across six continents.
Increase holdings, repurchase shares, and distribute dividends, attaching great importance to the interests of minority shareholders
Despite facing short-term adjustment pressures in the photovoltaic industry, Tongwei Shares has rolled out a series of strategic moves to demonstrate the company's confidence in the industry's future growth potential and its own comprehensive competitive advantages. These moves include a major shareholder increasing their holdings by 10-20 billion yuan, the listed company repurchasing shares worth 20-40 billion yuan, and announcing over 40 billion yuan in cash dividends for 2023. These actions form a 'combination punch' that actively responds to the call of the new 'National Nine Articles' while also providing a 'strong boost' for minority shareholders.
After years of rapid growth, the global photovoltaic installation capacity once again exceeded market expectations in the past year, reaching a total of 444GW. Since the beginning of this year, China's newly installed capacity has continued to grow strongly. According to data from the National Energy Administration, from January to March, China's photovoltaic new installations reached 45.74GW, a year-on-year increase of 35.89%. As the industry accelerates its consolidation, it is expected to show a trend where the strong continue to dominate. As a leading enterprise in high-purity polycrystalline silicon and solar cells globally, Tongwei Shares has a very distinct integrated competitive advantage. Its future performance in terms of operating results and valuation merits ongoing market attention.