May 19, 2024

Polysilicon project investment success or failure PV performance ice and fire two days

The success or failure of the investment in polysilicon projects is showing a double-day situation in the performance of photovoltaic power generation. On March 16, Yingli Green Energy (hereinafter referred to as “Yingli”) confirmed to the newspaper that the polysilicon project, which was placed in high hopes, was put into production for one year and has been treated as “long-term asset impairment project” with an impairment of 2.275 billion yuan. Renminbi. On the same day, GCL-Poly released its annual report that the company's annual net profit was HK$4.3 billion, a year-on-year growth of 6.2%. It was the “most profitable company” for photovoltaic power generation companies in the year and became the largest company in the global PV power generation market. More than 90% of GCL-Poly's revenue comes from polysilicon and wafer business. Subject to the plunge in polysilicon prices, 2011 was the coldest winter in the photovoltaic industry. Suntech Power is still the first to lose money, with a loss of up to $1 billion for the year. Liujiu Silicon is a polysilicon project owned by Yingli. It was once hoped by Yingli Chairman Miao Liansheng, but now it has become a corporate reputation. Yingli confirmed to this newspaper that Liujiu Silicon Industry was processed as a long-term asset impairment project, and the amount of impairment was as high as 2.275 billion yuan. In the same period, it was deducted and the goodwill was worth 273.4 million yuan. For a long time, Yingli’s strategy of extending upstream from photovoltaic power generation components has been optimistic for investors. According to the company's thinking, it can be free from the tightness of polysilicon and price fluctuations, self-produced and greatly reduced production costs. However, according to a person familiar with the matter, “In 2011, Yingli Polysilicon’s self-sufficiency rate was only around 10%”. In other words, Yingli prematurely promoted polysilicon investment projects, which did not directly benefit the business. The Liujiu Silicon Industry was put into production in August 2010, and the first phase of the project was 3,000 tons. It was once called “the most advanced factory and the most advanced production technology.” However, in 2011, the price of polysilicon plummeted from US$70/kg to 30 USD / kg. Yingli polysilicon was put into production for only one year, and it was announced that it would suspend production and report losses. Unfavorable investment also has an impact on Yingli's performance. In 2011, Yingli’s operating loss was US$428.2 million and its net loss was US$509.8 million. Even Yingli is still a very good producer of photovoltaic modules, and its shipments increased by 51.1% year-on-year to 1603.8MW. The above-mentioned insiders also revealed that in the new year, the production capacity of Yingli's photovoltaic power generation components will further expand. It is expected that the self-sufficiency ratio of silicon materials will be below 10%, and the self-produced silicon materials will be around 1,000 tons. For Yingli impairment, market analysts said that Yingli now has a market-to-book ratio of 0.412. Therefore, it is wise to make asset impairments for projects that are too costly and unprofitable. “Usually the company’s P/B ratio is less than 1, you need to consider making a depreciation.” When polysilicon products become a drag, Yingli may get a chance to take up the task, but investors are expecting “small” no longer. The company's net assets fell from $1.2 billion to $800 million. Yingli official also stressed that "the company believes that the future profitability of Liujiu Silicon Industry may be lower than originally expected, so the non-cash fixed assets impairment does not affect the actual operation and cash flow." "In the long run, six After the production capacity of the nine silicon industry is completely released, the production cost will be greatly reduced, which will bring huge cost advantages to the company." Yingli said. Many people in the photovoltaic industry believe that after the impairment, Yingli will either abandon polysilicon production in the next step, or will continue to intervene in upstream by way of acquisition. On March 15, UBS UBS released a research report that Yingli may establish a business relationship with GCL-Poly. According to the report, “UBS is investigating, and recently it has been released from Yingli to exit polysilicon production. It is expected that GCL-Poly will become a potential polysilicon supplier to Yingli.”

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