The world's highest market value photovoltaic enterprise is no longer a Chinese company.
As of the close on May 28th, First Solar, the largest photovoltaic company in the United States, rose another 1.24% to close at $280.16, with a total market value of $29.989 billion (approximately RMB 217.4 billion), temporarily holding the position of the world's highest market value photovoltaic company.
At the close of the same day, there were only two photovoltaic companies with a market value of 100 billion yuan left in the Chinese A-share market. Among them, Sunshine Power (300274. SZ) has the highest market value, reaching 148.03 billion yuan; Longji Green Energy (601012. SH) came in second at 140.18 billion yuan.
On May 18th, First Solar's market value has surpassed China's highest value photovoltaic company, Sungrow Power, for the first time. Within the next ten days, the company's stock price continued to show an upward trend. Within one month, The stock price of First Solar has risen by more than 50% cumulatively.
First Solar's stock price trend this year, Baidu Stock Connect
According to the official website, First Solar was founded in 1999 and is the only company among the top ten global solar energy manufacturers headquartered in the United States. It is also the only company that designs and develops advanced thin-film solar panels in the United States.
According to the 2023 global module shipment ranking compiled by InfoLink Consulting, last year, the top nine photovoltaic module manufacturers in the world were all Chinese companies, with Jingke Energy (688223. SH) ranking first in module shipments; First Solar, along with Chinese companies such as Xinxin Integrated (002506. SZ), Yingli Energy, and Hengdian Dongci (002056. SZ), tied for tenth place.
The rise in First Solar's stock price is closely related to the recent support policies for the new energy industry in the United States.
In 2022, US President Biden signed the Inflation Reduction Act, planning to invest $30 billion in production tax credits to promote the production of solar panels, wind turbines, and key mineral processing in the United States; Provide $10 billion in tax credits for the construction of clean technology manufacturing facilities, such as those for manufacturing electric vehicles and solar panels.
In this context, First Solar's performance has continued to grow in the past two years. The financial report shows that its net profit for 2023 was $831 million, with a net booking volume of 28.3 GW and a record sales volume of 11.4 GW. In 2022, First Solar is still in a loss making state.
First Solar's financial situation in recent years, Baidu Stock Connect
In the first quarter of this year, First Solar had a net profit of $240 million and produced 3.6 GW of components during the same period, breaking its component production record.
Mark Widmar, CEO of First Solar, stated that the company's production capacity can meet the demand of the US market, with more than half of its production capacity located within the US. In the first quarter of this year, The capacity utilization rate of the First Solar component factory is close to the design capacity and almost at full capacity.
At the same time, the Chinese photovoltaic industry is in a period of adjustment, with industry chain prices continuing to decline and corporate profit margins being compressed, which is reflected in corporate financial reports and stock market performance.
In the first quarter of this year, several domestic photovoltaic leaders suffered losses, with only Trina Solar (688599. SH) and Jingke Energy achieving profitability among the top five component factories. Among them, Longji Green Energy incurred a loss of 2.35 billion yuan, TCL Central (002129. SZ) incurred a loss of 880 million yuan; Tongwei Co., Ltd. (600438. SH) incurred a loss of 787 million yuan, while Jingao Technology (002459. SZ) also incurred a loss of nearly 500 million yuan.
In the downward cycle, the capital boom in China's new energy sector is no longer strong, and the overall stock prices of related companies are showing a downward trend. In 2021, when the domestic photovoltaic sector was at its peak, at least 12 companies with a market value of 100 billion yuan were generated. Longji Green Energy had a highest market value of 542.4 billion yuan, Sungrow Power had a highest market value of 256.3 billion yuan, and Tongwei Shares had a highest market value of 278.6 billion yuan.
Unlike the mainstream crystalline silicon battery technology of Chinese enterprises, First Solar is optimistic about thin-film photovoltaic technology. The company believes that compared to traditional solar panels, the manufacturing process of thin-film photovoltaic technology is more similar to that of flat panel TVs. It only takes four and a half hours to convert a piece of glass into a fully functional photovoltaic module, which can convert photons from sunlight into clean and reliable solar energy electricity.
First Solar also stated that due to its unique manufacturing process, its thin film technology has the lowest environmental footprint among currently available photovoltaic modules.
In 2019, First Solar has become the largest solar module manufacturer in the United States and the Western Hemisphere. As of now, it has invested $2.8 billion in three factories in Ohio, USA, and will invest an additional $1.2 billion. The latest investment is expected to add approximately $3.2 billion in economic value to the US economy. With continuous expansion, it is expected that by 2025, the company will hire over 3000 employees in four states in the United States, making it the largest employer in the US solar manufacturing industry.
Mark Widmar has stated that it is expected that First Solar's nominal production capacity will exceed 21 GW in 2024 and rise to over 25 GW in 2026. As of the end of 2023, the company's manufacturing capacity reached 16.6 GW. In 2022, its production capacity is 9.8 GW.
There is still a significant gap between this production capacity data and the rapidly developing Chinese enterprises in the past.
For example, as of the end of 2023, Longi Green Energy has built a silicon wafer production capacity of 170 GW, a battery production capacity of 80 GW, and a component production capacity of 120 GW; During the same period, Jingke Energy's production capacity in the three major sectors of silicon wafers, batteries, and components reached 85 GW, 90 GW, and 110 GW, respectively.
In terms of technology selection, current Chinese photovoltaic companies are focusing on high-efficiency N-type crystal silicon battery technology, including TOPCon, heterojunction IBC, etc. The share of thin-film battery technology in the global market is extremely low, and its advantages are not outstanding.
In the 1980s, thin-film batteries once held a 30% market share in the battery market. According to public information, in 2009, The global market share of FirstSolar batteries was once as high as 12%, ranking first in the world.
After 2010, with the breakthrough of crystalline silicon battery technology in photovoltaic enterprises, the cost of crystalline silicon rapidly decreased and the efficiency was significantly leading. Thin film batteries lost their low-cost advantage, and their market share was continuously compressed.
Minsheng Securities shows that due to the efficiency and cost of battery mass production, the global market share of thin-film batteries was about 4% in 2020. Cadmium telluride is the mainstream technology for thin film batteries. Based on low light intensity, color diversity, transmittance, and overall economy, thin-film batteries are more suitable for the photovoltaic building integration (BIPV) market.
As of now, the overall development of the thin-film battery industry has been relatively slow, mainly driven by First Solar. Former Chinese photovoltaic leader Hanergy also focused on thin-film battery technology, but the company has gone bankrupt.
The photovoltaic industry originated in Western countries such as Europe and America. In the 1970s, the "oil crisis" erupted, stimulating demand for new energy industries in countries such as Europe and America. China's photovoltaic industry started slightly later, but achieved rapid overtaking. In 2001, Shi Zhengrong, known as the "Godfather of China's Photovoltaics," founded Wuxi Shangde, opening the door to private photovoltaic enterprises in China.
Around 2010, the US financial crisis and the European debt crisis erupted one after another, and countries such as Europe and America significantly reduced photovoltaic subsidies, resulting in a sharp decline in downstream demand. However, although China's photovoltaic industry has also experienced impacts such as the "531 New Policy", it has developed rapidly due to policy support, technological breakthroughs, and other reasons, and the photovoltaic industry has entered the era of parity.
Around 2021-2022, due to the Russia-Ukraine conflict and other factors, the global energy transformation is imminent, and the demand for new energy bursts. Against this backdrop, China's photovoltaic industry has ushered in new growth opportunities, with a large amount of capital betting and enterprise entry, resulting in rapid production capacity growth.
This also prompts the global new energy industry to further shift its focus to China. At present, key components such as photovoltaic modules and wind turbines produced in China account for 70% of the global market share. China already has the most complete photovoltaic industry chain and advanced technology worldwide.
On May 29th, the Chinese A-share photovoltaic market rose slightly. As of the noon close, Sunshine Power rose 1.79% to 101.58 yuan/share, with a total market value of approximately 150.862 billion yuan; Longji Green Energy rose 3.35% to 19.11 yuan per share, with a total market value of approximately 144.816 billion yuan.