① Follett's 2023 PV glass revenue increased by 43.82% over the previous year ② The gross margin of the photovoltaic glass business was 22.45%, at a low level between 2016 and 2023 ③ By the end of 2023, Follett's total production capacity was 20,600 tons/day, and the Anhui and Nantong projects are expected to operate this year
Financial Services Association, March 26 (Reporter Chen Kang) The increase in demand for PV installations in 2023 has driven Follett (601865.SH)'s annual photovoltaic glass sales to rise nearly 50% year on year. Revenue increased by 43.82% over the previous year. PV glass already accounts for 91.4% of revenue.
According to the 2023 financial report released by Follett tonight, the company achieved annual revenue of 21.524 billion yuan, an increase of 39.21% year on year, and net profit of 2,760 billion yuan, an increase of 30.00% year on year.
Among the four major products produced and sold by the company, with the exception of photovoltaic glass, float glass revenue increased 2.15% over the previous year, while the revenue of engineering glass and household glass decreased by 2.16% and 6.15%, respectively. In terms of gross margin, photovoltaic glass, household glass, and engineering glass decreased by 0.87 percentage points, 6.44 percentage points, and 3.29 percentage points respectively, while the gross margin of float glass was -3.61%.
In 2023, Follett Photovoltaic Glass's gross margin was 22.45%, which is an all-time low in the period 2016-2023. The gross margins for 2020-2022 were 49.4%, 35.7%, and 23.31%, respectively. In the photovoltaic glass sector, costs such as raw materials, energy, direct labor, and manufacturing costs account for more than 90% of the total cost, and this portion of the cost amount increased by 45.44% compared to 2022.
Follett's current customers include Longji Green Energy (601012.SH), Jinko Energy (688223.SH), Dongfang Risheng (300118.SZ), Jingao Energy, and Zhengtai New Energy. In April 2023, Follett signed an agreement with Zhengtai New Energy and its 16 subsidiaries, Jinko Energy and its subsidiaries to sell photovoltaic rolled glass. The agreement includes plans to purchase 378 million square meters of photovoltaic rolled glass from July 2023 to December 2025.
By the end of 2023, Follett's total production capacity was 20,600 tons/day, and the total daily melting volume of the Anhui Phase IV project and the Nantong project was 9,600 tons/day. It is expected to be started and operated this year. The company plans to invest in the construction of photovoltaic glass kilns in Indonesia to meet the demand for photovoltaic glass in different countries and regions.
The manufacturing cost of photovoltaic glass can be reduced through large-scale production. Follett mentioned in the financial report that in 2024, the company will further expand the scale effect of photovoltaic glass, improve the manufacturing process level, optimize furnace technology, reduce overall energy consumption per unit, and increase the yield of photovoltaic glass.
Since 2023, the domestic photovoltaic glass industry's production expansion has slowed. CITIC Securities expects the industry to expand production by about 20,000 to 25,000 tons/day in 2024, and the pace of expansion will remain steady. Currently, the daily melting volume of the industry has reached 108,800 tons/day, and the growth rate has fallen 20.6% to a low point in the past 3 years.