Financial Services Association, April 30 (Reporter Liu Mengran) - Longji Green Energy (601012.SH), which lost number one in the component shipment rankings, promoted major new products during today's results conference to boost investor confidence. Chairman Zhong Baoshen of the company said that the upcoming HPBC second-generation module will be the last time that crystalline silicon batteries have achieved an efficiency increase of more than 1%, and the conversion efficiency of module batteries has reached 24.4%, which is significantly higher than the current efficiency level of mainstream TopCon components in the market of around 23%.

According to reports, the second-generation product will be released in Europe on May 7, and mass supply will begin in June. However, in the early stages, the monthly volume is only 50 megawatts, and larger batches of production capacity will be completed in the first half of 2025. Zhong Baoshen said that starting at this point, the company has already begun to build the next generation of large-scale production capacity, and subsequent plans will focus on this.

Industry analysts believe that in the face of the market pattern of TopCon battery modules being almost the only one, Longji Green Energy needs a “breakaway” product to compete with it. Financial reports show that the revenue scale of Longji Green Energy has exceeded 120 billion yuan for 2 consecutive years, and the scale is still at the top of the industry. However, Longji Green Energy also experienced continuous quarterly losses. In the fourth quarter of last year and the first quarter of this year, the company lost 942 million yuan and 2.35 billion yuan respectively.

At the performance meeting, the company's management confessed that business performance was affected by the rapid decline in PV prices and the depreciation caused by the iterative upgrading of some production lines. However, Zhong Baoshen believes that there are some changes in the current logic of the photovoltaic industry, and module prices are no longer a key factor affecting market demand and customer decisions.

Zhong Baoshen told investors that the company's strategy is to develop core photovoltaic technology, that is, to improve efficiency and improve reliability; the second is to target customer scenarios and accurately solve pain points. Over the past year, Longji has mainly focused and prepared in these two directions.

During the exchange, Zhong Baoshen continued to emphasize the view that BC technology is the mainstream, and further proposed that composite passivated back contact batteries are the definitive direction. Depending on passivation technology and film structure, different technical routes have emerged. Heterojunction, Topcon, and even PERC can use BC technology, but HP (composite technology) is the better choice.

Zhong Baoshen said that the core of future battery expansion is HPBC's second generation, and there are no plans to expand TopCon's production capacity from the current one. The overall plan for HPBC (Generation 1) is to achieve 100GW within three years, but it will also be decided based on market conditions whether to accelerate or maintain the pace.

From 2020 to 2022, Longji Green Energy ranked first in the PV module shipment industry for three consecutive years. However, in this round of N-type technology iterations, represented by TopCon, the company chose to open up the market with differentiated BC technology. The company shipped 67.52 GW of monocrystalline modules last year. According to the plan at the beginning of last year, the company's target is 85GW, with a completion rate of about 80%.

A CFA reporter noticed that in the distributed scenario, the company had previously continuously launched new differentiated products such as anti-dust accumulation and moisture and heat resistance to open up the market. According to management, the first-generation HPBC shipped 5.95 GW last year. The monthly shipment volume in March and April this year exceeded 2 GW, and this year's shipping target was over 30 GW.

According to Zhong Baoshen, the company will launch products at different prices based on HPBC battery technology, and there are also different premium levels. The price of a single watt of the most conventional single-sided products is currently 3-6 cents more expensive than TopCon's double glass products. The highest-specification products can be 40% higher than conventional products, and the price difference of a single watt can reach 0.3-0.4 yuan.

On the one hand, the continuous launch of differentiated and efficient products is Longji Green Energy's response to value imbalances in the industrial chain; on the other hand, performance fluctuations are also closely related to the iterative transformation of old and new production capacity, and this is also an important reason for Longji Green Energy's profit loss in a single quarter. As a P-type production capacity leader, the company calculated fixed asset impairment reserves of 1,586 billion yuan in 2023; in the first quarter of this year, fixed asset impairment reserves were calculated at 152 million yuan.

In response to investors' concerns about whether the value will continue to be reduced by a large amount, Chung Po-sun said that part of PERC production capacity has been reduced, while others are still in operation without reduction. According to its report, PERC production capacity will be converted to HPBC's second generation. The main thing is that several key devices may be reused. In addition, there are also quite a few devices that can no longer be used and eliminated. Impairment is unavoidable, but the remaining impairment will not be significant, and overall remains within a manageable range.

The photovoltaic industry is experiencing a complex situation where the long-term development trend remains unchanged, but the elimination of backward companies is accelerated in the short term. Analysts believe that in 2024, due to the rapid decline in industrial chain prices and the tightening of market financing policies, enterprises with high debt and homogenized products will begin to withdraw from the market.

Will the new PV installation market be affected? When will prices in the industrial chain bottom out, and when will the supply relationship return to balance? At the results meeting, investors asked the company's management several times about expectations in the PV market from different perspectives. In terms of medium- to long-term development, Zhong Baoshen believes that the growth of the domestic market should be between 10% and 25%.

However, Zhong Baoshen also admits that according to the current market supply situation, without any special external factors, this problem may be difficult to solve in the short term. But at the same time, he said that this year will not get worse, because many areas are currently losing cash costs, and I believe that companies that are too poor will soon be eliminated.

He believes that the company has always believed that the long-term trend in the development of the photovoltaic industry has not changed, that there is still huge room for technological progress and application development in the industry, and that the photovoltaic industry will continue to move forward in the process of continuously solving problems.