① Guosheng Technology told reporters that the chairman of the board is carrying out his duties normally and that the rumor is untrue. If an abnormal incident occurs, it will be announced on the official communication channel. ② Recently, the company has successively received regulatory work letters from the Shanghai Stock Exchange and warning letters from the Beijing Securities Regulatory Bureau. Moreover, the stock price dropped significantly. At one point, the cumulative decline in January was more than 30%. ③ After transforming photovoltaics, the company withheld non-net profit but did not achieve profit. From an industry perspective, the problem of heterogeneous commercial benefits has not been solved.
Finance Association, January 26 (Reporter Wu Chao) Guosheng Technology (603778.SH) has been transitioning from landscape to photovoltaics for some time, but the company's development has not always been smooth sailing. Since this year, the company has successively received regulatory work letters issued by the Shanghai Stock Exchange and warning letters issued by the Beijing Securities Regulatory Bureau due to illegal issues such as credit disclosure errors. Today, there are also rumors in the market that the chairman of the company has been suspended.
Regarding the rumor, Guosheng Technology said in the afternoon that the chairman of the board was carrying out his duties normally. The company's securities department told the Financial Federation reporter that the information currently obtained is true. The rumor is untrue. If an abnormal incident occurs, it will be announced on the official credit disclosure channel.
After the transformation, the photovoltaic business contributed nearly 90% of Guosheng Technology's revenue last year, surpassing gardens to become the number one main business, but after deducting non-net profit in the third quarter, it was not profitable. The company told the Financial Federation reporter that at present, the operation of photovoltaic and garden businesses is progressing steadily, but it is still unknown whether recent specific data and production can guarantee profits.
Internal control loopholes have been accused of large fluctuations in the secondary market
Guosheng Technology changed its name from Qianjing Garden in November last year. It was listed on the Shanghai Stock Exchange in 2015, becoming the first domestic listed company on the Ecological Garden Main Board. However, in recent years, the company's performance has been poor. From 2020 to 2022, it has accumulated losses of 450 million yuan over three years. This also caused the company's former actual controller to return to Quanfu and Yang Jing to develop the idea of selling the shell, planning to transfer control several times. The transfer targets include Shaanxi Water and Hainan Travel Investment.
After many unsuccessful transfers, actual controllers Wu Jun and Gao Fei officially took over the company in August of last year. Currently, Wu Jun is the chairman and Gao Fei is the general manager.
Recently, Guosheng Technology has declined significantly in the secondary market. Since January, compared to 5.66 yuan/share at the beginning of the month, the cumulative decline in the company's stock price once exceeded 30%, and hit 3.95 yuan/share on January 24, the lowest value since November 2022.
On January 26, news also spread in the market that Guosheng Technology's employees' wages were not paid in a timely manner and that the chairman of the board was suspended. In the afternoon, the company responded that the chairman is carrying out his duties normally, and the company can contact the chairman. As for employee wages, the company is divided into two major business segments. Wages in the garden sector are paid normally, and the wage situation of employees in the photovoltaic sector is currently unknown.
After that, along with the collective rise in the photovoltaic sector in the afternoon, Guosheng Technology also pulled up and stopped. By the close of trading on the 26th, the stock price closed at 4.61 yuan/share. According to reports, prices in the photovoltaic industry chain have recently bottomed out and rebounded, and the prices of silicon materials and silicon wafers all ushered in a slight increase this week.
It is worth noting that on January 3, the Shanghai Stock Exchange issued the “Decision on Supervisory Warning against Guosheng Shi'an Technology Co., Ltd. and those responsible”. The Shanghai Stock Exchange pointed out that after investigation, Guosheng Technology had problems such as inaccurate disclosure of multiple financial data and irregular financial accounting, and that the company's business management and internal control were inadequate.
The Shanghai Stock Exchange determined that the then-chairman and general manager Hui Quanfu and the then-financial director Zhang Yongsheng were not diligent and conscientious, were responsible for the company's irregularities, and supervised and warned Guosheng Technology and the then chairman and general manager of Guosheng Technology to return to Quanfu, and Zhang Yongsheng, then financial director.
Furthermore, the Beijing Securities Regulatory Bureau has issued warning letters to Guosheng Technology, HuiQuanfu, and Zhang Yongsheng regarding the above irregularities.
Guosheng Technology also responded to the regulatory work letter issued by the Shanghai Stock Exchange, stating that it will address these internal control loopholes from various aspects, such as “strengthening the business quality and ability of review and approval personnel, and strengthening financial personnel's understanding of procurement business.”
The Financial Services Association reporter also noticed that Guosheng Technology recently got involved in a large project payment dispute.
According to the announcement, the company filed a lawsuit with the Xining Intermediate People's Court of Qinghai Province over the construction contract dispute with Doba Xincheng and received a civil judgment from the Xining Intermediate People's Court of Qinghai Province. The defendant Doba Xincheng paid the plaintiff Qianjing Garden 110 million yuan in project settlement within 30 days after this judgment came into effect. Since then, Dopa Xincheng has filed an appeal and applied for revision of the judgment to pay the appellant Guosheng Technology about 676.766 million yuan for the project or send it back for retrial; the company has already accrued a cumulative asset impairment loss of about 42.2407 million yuan for the litigation project in accordance with corporate accounting standards.
The cost of the HJT route is high, and it is generally difficult for the industry to make a profit
Guosheng Technology's transformation into photovoltaics began in November 2022. The company plans to raise no more than 469 million yuan in capital from Guosheng Energy. The net capital is to be used entirely for the 1GW high-efficiency heterojunction battery production project and the 2GW high-efficiency heterojunction solar module production project.
There were changes after this fixed increase. In August 2023, the company issued an announcement stating that it decided to stop issuing shares to specific targets (fixed increase) and apply to the Shanghai Stock Exchange to withdraw the relevant application documents. As for the reason for the termination, the company stated that it was due to changes in the capital market and related policies and the actual situation of the company.
However, Guosheng Technology has not given up on the pace of transformation. It has successively carried out the development, operation and maintenance of large-scale high-efficiency heterojunction photovoltaic cells, modules, silicon wafers, and integrated wind and solar energy storage power plants through the acquisition of 7 photovoltaic industry subsidiaries including Jiangsu Guosheng Shi'an. At present, the products of two subsidiaries, including Jiangsu Guosheng Shi'an, have achieved mass production and contributed high revenue to the company. In the first half of 2023, the PV sector achieved revenue of 503 million yuan, accounting for 89.88% of total revenue.
Overall, however, Guosheng Technology's performance has not yet ushered in a turning point. In the first three quarters of 2023, its net attributable profit was 179.454 million yuan, and attributable deducted non-net profit was -11.581 million yuan.
Photovoltaic industry insiders told the Financial Federation reporter that Guosheng Technology chose the heterogeneous junction (HJT) technology route. This route was once favored by capital because of its high theoretical ultimate efficiency, but up to now, commercial efficiency issues are still difficult to completely solve. Production line investment costs and product production costs have declined less than expected. In the fierce competition for photovoltaic technology, development lags behind other N-type technology routes such as Topcon.
According to statistics, HJT's various costs do not have an advantage. Currently, TopCon's non-silicon cost is 0.26-0.27 yuan/watt, while HJT's non-silicon cost is 0.33 yuan/watt. The HJT cost is currently 0.12-0.13 yuan/w higher than Topcon, mainly on non-silicon aspects such as silver paste, equipment costs, and target materials.
In terms of investment costs, the investment cost of the TopCon battery production line has been reduced to 110 million yuan/GW in 2023, while the heterojunction is still as high as 300 million yuan/GW.
In addition to Guosheng Technology, other A-share heterojunction companies also have few profits. Companies that firmly choose heterogeneity, such as Baoxin Technology (002514.SZ), Elken Technology (002610.SZ), and King Kong Photovoltaics (300093.SZ), etc., all often fall into losses. Industry leader Huasheng New Energy only announced an official profit in September of last year.
Regarding Guosheng Technology's reserves on the HJT route, Guosheng Technology said on the investor interactive platform on January 9 that the company relies on the domestic heterojunction photovoltaic industry production management team headed by Dr. Zhang Zhongwei to carry out the photovoltaic business. The company and its holding subsidiary have many patents such as “nano fully passivated contact silicon heterojunction double-sided solar cells and their manufacturing methods”.
According to his resume, Zhang Zhongwei has a PhD in microelectronics and solid-state electronics from East China Normal University, and was the general manager of Aerospace Mechatronics (600151.SH) Shanghai Solar Technology Co., Ltd.; Chief Technical Officer of Aerospace Mechatronics and General Manager of Zhongzhi Taixing Electric Power Technology Co., Ltd.; currently a new energy high-tech review expert of the Ministry of Science and Technology, a core member of the China Photovoltaic Special Committee, director of the Shanghai Solar Energy Association, and vice chairman of the Shanghai Solar Energy Society.
Furthermore, the entry of Wu Jun, the current actual controller, is also seen as helping Guosheng Technology's transformation. The company also stated in the relevant announcement that Wu Jun's actual experience in the investment industry is closely related to the photovoltaic industry, including that the funds involved in management have invested in many photovoltaic industry companies, helping them to accumulate industry experience, opinions and related market resources in the photovoltaic industry.