LONGi Green Energy Technology has forecasted what would be its first annual loss
It expects to incur a net loss of RMB 8.2 billion to RMB 8.8 billion for the FY 2024
It cites intense competition in the industry due to overcapacity and lower output of its BC modules as the reasons
One of the leading solar PV manufacturers in the world, LONGi Green Energy Technology, has issued a profit warning for 2024 as it expects to report a net loss of RMB 8.2 billion to RMB 8.8 billion ($1.12 billion to $1.20 billion) for the year. This will be the company’s ‘1st annual loss’ in 12 years.
In 2023, the company’s net profit declined by 27.4% to RMB 10.75 billion after it set aside an impairment provision of RMB 7 billion. Its revenues of RMB 129.49 billion were at par with RMB 129 billion in 2022 (see Chinese Solar PV Giant Shipped 67.52 GW Modules In 2023).
In comparison, the company reported RMB 14.8 billion ($2.21 billion) in net profit in 2022, which was an increase of 63.02% year-on-year (YoY).
In a stock exchange announcement, LONGi explained that the company’s business suffered from the intense industry competition last year since module prices as well as other component prices tumbled. The prices for PERC as well as TOPCon modules declined in the industry and so did the gross profit margins of their producers.
Overcapacity in the market forced manufacturers to lower factory utilization as there was a significant imbalance between demand and supply. Technology iteration has led to an increase in asset impairment provisions. At the same time, companies invested in polysilicon saw periodic losses in operating performance.
Unlike its peers, LONGi did not go from PERC to now the industry’s mainstream technology TOPCon in its technology roadmap and chose BC instead, which should explain the slowdown in pace. It plans to completely shift to BC technology through its proprietary Hybrid Passivated Back Contact (HPBC) cell route.
Nevertheless, LONGi stressed that 'it is widely anticipated that the industry is generally falling into cyclical losses' meaning the industry dynamics impacted several other PV companies as well in 2024. The management says it had started preparing for the industry's 'cold winter' by strategically contracting since as long back as May 2023 when the company's Founder and President Li Zhenguo stated to the media that over the next two to three years, many photovoltaic manufacturers might be forced to exit the industry.
Meanwhile, LONGi's BC production capacity expansion plans are now keyed in for 2025. At present, its second-generation BC products are in the early stages of launch. LONGi Chairman Zhaong Baoshen shared, "The BC products of LONGi are expected to start ramping up production in 2025, and according to the plan, by the end of 2025, HPBC 2.0 will form a production capacity of about 50GW.”
Baoshen added, "The company's 'coldest days' are already over, and we are full of confidence for the future."
The story was updated with an official statement released by LONGi.
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