Photovoltaic Industry: Owning eggs under nest

In 2011, faced with the slow recovery of the global economy in the post-financial crisis era, China’s economy was also exhausted: CPI remained high, and before the stock market returned to 10 years ago, local business owners’ “rumbling” rumors continued, not even “every year” The “fell” property market also grew weak under the pressure of the policy. The complicated economic situation is even more so that the just-concluded Central Economic Work Conference set the tone for the “stability” in 2012.

The solar photovoltaic field is also not spared. In the international market, a large number of photovoltaic companies in the United States have gone bankrupt, and the demand for photovoltaic products in Europe has fallen dramatically. China's PV module companies, which have always been “two out of the box” and rely heavily on foreign markets, have suffered almost losses across the board. The winter of the photovoltaic industry is raging.

Under the background of such a downtrend channel, the new energy sector is not without its bright spots. A group of once-not-known companies has risen strongly at this time, presenting a wonderful scene of contrarian growth in the new energy field.

Jinggong Technology, Hanergy Silicon, Jiyang Xineng, Yuhua Photovoltaic, Yuanjing Energy, Zhenghai Magnetic Material... These sound-familiar companies may have gone against the market to expand, or have successfully entered the capital market, or achieved performance. With a huge increase, they do not seem to feel this winter, which is particularly cold for most new energy practitioners, with their individualized product advantages.

Under the nest, there are also eggs. For Solar Energy Chairman Cao Renxian, although he is also in the new energy camp, he does not have the troubles of Suntech CEO Shi Zhengrong. Shi Zhengrong's Suntech is experiencing tremendous impact from industry adjustments, sharp declines in profits, and troubled companies with bankruptcy and other rumors. Suntech's share price also plunged from the highest price of 90 US dollars to the current 2 US dollars, a drop of up to 97%.

“How bad is the current situation of new energy? If you look at the performance of their stock market, you know.” As Director of the Planning and Development Department of Xinli Energy Development Co., Ltd., Wang Xi’s words or represent the feelings of most people. However, things are not so absolute. Just as Shi Zhengrong was worried, the good life for Cao Renxian had only just begun.

Although the A-share market has been sluggish for more than half a year, the successful solar power supply that landed on the GEM on November 2 is still full of momentum. Its issuance price of 30.5 yuan is enough to make Cao Renxian a billionaire quickly. For Solar Power, the funds raised through the listing will enable it to successfully launch an annual output of 1 million kilowatts of solar photovoltaic inverter projects. The company’s prospects are still “sunny”.

In the solar photovoltaic industry chain, Zhejiang Jinggong Technology can also comfortably wear cotton-padded jackets for the winter. This equipment company, which used to dominate traditional business fields such as building materials machinery and textile machinery, has been developing photovoltaic equipment from polysilicon to chipping since 2005. In 2007, the company's polycrystalline silicon ingot furnace was brought to the market and became one of the mainstream manufacturers in 2008. By 2011, solar photovoltaic equipment revenue has accounted for 64.28% of the company's main business revenue. In 2011, with the reduction of subsidies in Europe and the weakness of the global photovoltaic market, Jinggong Technology achieved operating revenue of RMB 1.9 billion in the first three quarters of the year, an increase of 193.39% year-on-year, and net profit of RMB 337 million, a year-on-year increase of 1462.16%.

The company expects 2011 full-year net profit growth rate between 350% to 372%, and is expected to achieve a net profit of 410 million yuan***. According to the company, under the background of the downturn in the photovoltaic industry, the main reason for maintaining rapid growth was "the sales of solar photovoltaic equipment increased year-on-year."

When these enterprises in the solar photovoltaic industry chain set off waves in the depressed market, some companies in the wind power industry also achieved rapid expansion in the reverse market, such as the long-term energy source in Jiangyin City, Jiangsu Province. This company was founded in 2006 as a “small enterprise” and its main market is located in three types of wind districts. It has successfully avoided the frontal competition with the leading wind turbine companies. In recent years, it quietly climbed into the production of domestic wind turbines. The first echelon of the company, in 2009 the company completed sales of 1 billion yuan***, and according to industry analysts, in 2011 its sales will achieve steady development, reaching more than 2 billion yuan.

"Bulwark" has all the reasons for winning, so at a time when the industry is at a low tide, companies that can "conquer the trend" are not luck, and they must have their own competitive advantages.

"Whatever this advantage is, technology, experience, or policy, or even some unique qualifications in the industry chain, will become their barriers. The inevitable result of this barrier to entry is to reduce competition in the field. Therefore, the situation of such enterprises will be relatively good. This is in full compliance with the laws of economics.” Yang Lei, a partner of Aurora Capital Partners, interpreted the secrets of the company’s success against the market in the cold winter.

For creating "barriers," Jinggong Technology is clearly a winner. Before 2008, the domestic polysilicon casting furnace market had been monopolized by foreign companies such as GTSOLAR. The high prices and the lack of after-sales service have plagued domestic polysilicon manufacturers.

Jing Gong Technology intervenes in this industry, it is precisely this foreign company's short board, built its own in the price and service advantages of the "barrier." It is with this advantage that in the winter of this industry, Jinggong Technology has attracted many investors: from July 4th to September 30th, there were as many as 14 batches of investment institutions in more than two months. Attracted, "flocking" research.

"In many aspects of China's new energy industry chain, many domestic equipment companies are more inclined to import. In this adjustment period, due to the survival considerations, downstream manufacturers have to take the initiative to try some domestic alternative products because the cost reduction is It is now the most important goal. This will effectively promote the development of domestic equipment companies. "Yang Lei also explained another layer of reasons.

There are thousands of barriers and users need to be determined according to circumstances. Therefore, Jiangsu Vision Energy in the wind power industry chose a high “quality barrier” to isolate the homogenization competition from its peers and also resisted the severe winter. Due to the rapid expansion of domestic wind power capacity, frequent accidents occurred: According to incomplete statistics, from 2009 to April 2011, 16 units were burned or collapsed; blades were rejected due to material failure, and batch replacement was scrapped; the unit did not have low voltage ride through function. Hundreds of generators have escaped from the network. It is in this context that the long-term energy that has always insisted on independent research and development and refused to purchase drawings to be assembled has become the darling of the market. Although its price is higher than its counterparts, it is full of adaptive “custom” methods and high quality guarantees. , so that customers are still in an endless stream.

“I always think that there is nothing to get together. If we all get together, it will quickly result in excess capacity. The consequences are self-evident. The government, as an important driving force for the new energy industry, must not do anything that is hot. It is necessary to think differently and consider building a technical enterprise that is capable of building barriers,” Yang Lei emphasized.

Therefore, building barriers and seeking differentiated competition are common features of those who win in this industry in the winter. It is precisely because companies realize this point that they have accurately found their place in the industry and made barriers the best barrier against cold.

The policy is still king "For now, the government's support is still vital for photovoltaics. In the major photovoltaic market in Europe, due to the continuing debt crisis, the government's support for new energy has weakened, and the global photovoltaic installed capacity The capacity is greatly reduced," said Zhang Shuwei, who is currently in the PIK Energy Systems Analysis Group in Germany.

It is for this reason that under the circumstance that the domestic market has not been opened, China's photovoltaic industry, which relies heavily on foreign markets, will inevitably “cold together”. Take solar power for inverter production as an example. In 2010, two-thirds of its operating revenue would depend on the European market. In the first half of 2011, due to changes in the European PV market policy, the proportion of its overseas operating revenues was sharply reduced to one-fifth of the operating income of all products.

However, with the determination of the national PV power grid benchmark price in the second half of the year, driven by local governments, China's photovoltaic market has finally been activated. In order to catch up with the 1.15 yuan discount, the construction of photovoltaic power plants has entered a period of rapid growth. Under this background, Sunlight Power basically escaped the impact of the industry downturn. In the first three quarters of 2011, the company's operating income has reached 560 million yuan, roughly the same as last year's total revenue, and only the third quarter's revenue exceeded the entire first half of the year. .