On August 7th, Yongzhen Stock closed at 24.52 yuan/share. It has been less than a month and a half since Yongzhen Stock was listed as a 'photovoltaic concept stock', and the stock price has already fallen by almost half. Product portfolio 100-300 billion yuan products operating income of 401/1288/60 million yuan respectively.
Yongzhen Stock is mainly a manufacturer of aluminum alloy photovoltaic structural parts, with products including photovoltaic frame products, photovoltaic building integrated products (BIPV), and photovoltaic bracket structural parts. As of the 26th of June, at the time of listing, Yongzhen Stock had four major production bases in Changzhou of Jiangsu, Yingkou of Liaoning, Chuzhou and Wuhu of Anhui, with an annual output of 0.24 million tons of photovoltaic frames, and a production capacity of nearly 90 million sets of photovoltaic frames, with a market share of around 10.73%.
Riding on the boom of the photovoltaic industry chain, Yongzhen Stock officially listed on the Shanghai Stock Exchange on June 26th, with an issue price of 23.35 yuan/share. On the first day of listing, Yongzhen Stock had a maximum increase of 88.95%, with the highest stock price reaching 44.99 yuan/share, and the highest market capitalization reaching 10.663 billion yuan.
Subsequently, the stock price of Yongzhen Stock continued to decline. On July 18th, Yongzhen Stock fell below the issue price for the first time during intraday trading. As of the close on August 7th, Yongzhen Stock's latest stock price was 24.52 yuan, with a market capitalization of about 5.8 billion yuan, approximately half of the peak value.
Wang Xianli and Shao Dongfang are the controlling shareholders and actual controllers of Yongzhen Stock. After the company's listing, the two directly hold 37.14% and 2.11% of the shares of Yongzhen Stock, respectively, for a total shareholding ratio of 39.25%. On the first day of Yongzhen Stock's listing, the highest market value of the two was about 4.2 billion yuan, which has now fallen to around 2.3 billion yuan, a decrease of about 46%.
In fact, at the moment when the main links of the photovoltaic industry chain are undergoing technical transformation and production capacity adjustment, it is not easy for downstream material enterprises to survive.
On the one hand, photovoltaic frame products are the only pillar products of Yongzhen Stock, with revenue contribution rates of over 97% in recent years. In 2022, with the sharp increase in photovoltaic installations, Yongzhen Stock's revenue jumped to 5.181 billion yuan, an increase of 75.51%. In 2023, as the industry's production capacity structure is adjusted, Yongzhen Stock's growth rate will slow down to around 4%.
On the other hand, Yongzhen Stock's customers are mainly downstream leading component manufacturers in the photovoltaic industry, and it is relatively difficult for Yongzhen Stock to obtain higher pricing power. In 2021, nearly 99.73% of Yongzhen Stock's revenue came from its top five customers, including Trina Solar, JA Solar, Longi Green Energy, Artes and JinkoSolar. By 2023, this proportion will decrease to 85.73%, with Tongwei replacing JinkoSolar among the top five customers.
It is worth noting that according to research reports from Huajin Securities, Yongzhen Stock's big customer strategy began to show explicit results in 2021. Yongzhen Stock appeared in the supply chain list of top photovoltaic component manufacturers such as Trina Solar and Artes. In the same year, Trina Solar, JA Solar and Artes directly purchased shares, holding a total of 5.625% of Yongzhen Stock. In 2022, they entered Tongwei Co., Ltd. and Eging Photovoltaic Technology, and completed bulk supply; starting in 2023, they rapidly increased sales to Aiko Solar Energy, Jinneng Clean Energy and other companies. Behind the blessing of big customers, Yongzhen Stock's gross margin is lower than the average of comparable listed companies in the photovoltaic frame field. In other words, to a certain extent, Yongzhen Stock sacrificed part of its profit margin to obtain customer stability.
Beginning last year, when downstream customers were affected by the price impact of the photovoltaic industry chain, cost reduction and efficiency improvement became a common topic in the photovoltaic industry, and the cost reduction was also transmitted to Yongzhen Stock's gross margin, which continued to decline.
From the disclosed performance forecast, most of Yongzhen Stock's main customers had different degrees of profit decline in the first half of the year. Artes is expected to achieve a net profit of 1.2-1.4 billion yuan in the first half of the year, with a year-on-year decline of about 38%; Tongwei Co., Ltd. is expected to lose about 3-3.3 billion yuan in the first half of the year; JA Solar is expected to lose about 0.8-1.2 billion yuan; Longi Green Energy's loss range is between 4.8-5.5 billion yuan, and the year-on-year decline of the three companies exceeded 100%.
Although in the prospectus, Yongzhen Stock believed that the pressure of main industry chain prices had limited impact on the auxiliary material industry such as photovoltaic frames, the company is still inevitably affected by industry fluctuations, and at least investors have chosen to 'vote with their feet' in advance.
