The battle in the photovoltaic market is still fierce. Both LONGi Green Energy and Jinko Solar have reported a turnaround from profit to loss | Financial Report Insights

Faced with the challenges of intensifying competition and price fluctuations in the global photovoltaic industry, two photovoltaic giants, LONGi Green Energy and Jinko Solar, have both reported a turnaround from profit to loss. LONGi Green Energy's 2024 interim report shows that the company's performance in the first half of the year was poor, with revenue declining by over 40% year-on-year, and the company turning from profit to loss year-on-year. Jinko Solar's second-quarter revenue also fell by 22% year-on-year, similarly turning into a loss year-on-year.

LONGi Green Energy's 40% Revenue Decline in the First Half of the Year

Key Financial Data:

Operating Income: RMB 38.529 billion, down 40.41% year-on-year;

Loss: RMB 5.243 billion, while the company achieved a net profit of RMB 9.178 billion in the same period last year, turning into a loss year-on-year.

The loss in the first quarter was RMB 2.350 billion, and in the second quarter, it was RMB 2.893 billion.

According to media reports, this loss amount did not exceed the pre-loss range provided by the company last month. The company stated that the loss was due to the worsening mismatch between supply and demand in the photovoltaic industry, with prices in the main industry chain further declining and falling below the company's costs.

Media analysis also suggests that the company's year-on-year turnaround to a loss in the first half of the year was mainly affected by the continuous significant decline in industry chain prices and the provision for inventory impairment. According to the company's simultaneous disclosure of the "Announcement on the Provision for Asset Impairment in the 2024 Interim Report," LONGi Green Energy plans to make a provision for impairment of RMB 5.784 billion in the first half of the year, mainly including a provision for price decline of RMB 4.87 billion due to the continued drop in prices of main products, a provision for impairment of long-term assets such as fixed assets of RMB 0.859 billion, and a provision for impairment of contract assets of RMB 55.4489 million.

In terms of shipments, according to the company's financial report, LONGi Green Energy achieved silicon wafer shipments of 44.44GW in the first half of 2024 (21.96GW sold externally); battery sales to external parties were 2.66GW; component shipments were 31.34GW, with sales in the Asia-Pacific region increasing by over 140% year-on-year. The shipment volume of the company's BC components in the first half of the year was approximately 10GW.

Jinko Solar's Q2 Gross Profit Decline by 44%

Key Financial Data:

Revenue: RMB 24.05 billion (USD 3.31 billion), down 21.6% year-on-year.

Gross Profit: RMB 2.68 billion, down 44% year-on-year.

Gross Margin: 11.1%, lower than the first quarter's 11.9%.

Net Loss Attributable to Shareholders: RMB 100.7 million, compared to a net profit of RMB 1.31 billion in the same period last year.

Total Shipment Volume: Increased by 36%, with shipments of 23.8GW of solar modules and 1.49GW of solar cells and wafers in this quarter, totaling 25.3GW.

Like most major solar manufacturers, the year-on-year financial comparisons between 2024 and 2023 show significant declines despite increased shipments and market demand. Jinko Solar's CEO, Li Xiande, attributed this mainly to "increasingly irrational low prices in the supply chain."

Li Xiande stated, "By the end of the second quarter, we became the world's first solar company to achieve a cumulative module shipment volume of 260GW, covering nearly 200 countries and regions. This once again demonstrates the strength of our global strategy "Due to a slight decrease in prices in several links of the industry chain, we have adjusted our production planning strategy and the utilization rates of different processes. We have also optimized our supply chain strategy to control costs."

He continued, "Overall, the global demand in the first half of 2024 is showing a rapid growth momentum. China's newly added installed capacity reached 102.4GW, a year-on-year increase of 30.7%, while the total export volume of solar modules increased by about 20% year-on-year. Thanks to our global layout and competitive products, by the end of the second quarter, our order visibility for 2024 exceeds 80%, allowing us to maintain industry-leading utilization rates, especially in the n-type battery sector, which is almost close to 100%."

Looking ahead to the end of 2024, Jinko Solar expects its annual shipment volume to be between 100GW and 110GW. The company also announced plans to build a 10GW TOPCon battery and module production facility in Saudi Arabia