Source: Mustang Finance

if you have money in your account, you still need to "collect money". if the shareholders quit, will the company offer a "buyback" killer?

Author Liu Junqun

editor Wu Lijuan, Gao Yan

Jinko Energy is expected to "have a lot to eat" this time! On August 14, Jingke Energy (688223.SH) announced the launch of the 9.7 billion yuan fixed increase plan, ready to add more bricks to the expansion of production. However, it should be noted that Jingke Energy has just completed the fund-raising of 10 billion convertible bonds four months ago, and has also conducted a large financing of 10 billion yuan including IPO in 2022. This time, the total financing for two years is about 30 billion billion yuan.

More importantly, the giant, which has been listed on the-share market for only one and a half years, still has about 24.9 billion yuan in cash on its account.

There is money on the books and frequent financing, and investors vote with their feet. On August 15, JinkoSolar's share price suffered a limit, closing at 10.42 yuan per share, down 11.99 per cent, and its total market capitalization fell to 104.2 billion yuan, the lowest since April 26, 2022. That night, the company launched its first buyback plan since its listing, spending 3-0.6 billion yuan in advance to buy back shares, with a buyback price of no more than 18.85 yuan per share, which is more than 80% higher than the share price on August 15. On August 16, after the announcement, the stock price closed at 10.45 yuan/share, up 0.29 percent. As of August 18, the company's share price was 10.71 yuan/share, with a market value of 107.1 billion yuan. Stock prices and market capitalization are slowly recovering.

two years to raise 30 billion yuan to expand photovoltaic production

Although capital has given a clear attitude towards the large amount of financing of Jingke Energy, Jingke Energy, which is deep in the PV circuit, has not stopped financing, and 30 billion of the funds are planned to hit PV.

on January 26, 2022, jingke energy was officially listed on the board. the IPO planned to raise 6 billion yuan. as a result, it raised more than 4 billion yuan and actually raised 10 billion yuan. Funds are mainly used for the annual production of 11GW high-efficiency battery production line and other projects to build and supplement working capital.

six months and one day later, on July 28, jingke energy decided to issue convertible bonds to raise 10 billion yuan. Interestingly, the regulation requires that the interval between two financing of listed companies should be more than 6 months. This time Jingke stepped on the regulatory bottom line operation, we can also see the urgency of its financing. Ten months later, on April 19, 2023, Jingke Energy has completed the above-mentioned 10 billion yuan convertible bond fundraising. Three months later, on August 14, 2023, Jingke Energy again released a fixed increase plan of 9.7 billion yuan. Of course, the company also began to "scatter coins" after a large amount of financing. On March 18, 2022, the company announced an investment of 20.8 billion billion yuan to build a 24GW high-efficiency photovoltaic module and 100000 tons of photovoltaic module aluminum profile project, as well as a 30GW single crystal pull rod photovoltaic industry project. On May 25, 2023, it was announced again that 56 billion yuan (including working capital) would be used for the planning and construction of a large vertical integration base project with an annual output of 56GW in Shanxi's transformation and comprehensive reform demonstration zone.

the amount of investment is relatively large, and jingke energy, which was inquired by the Shanghai stock exchange, replied that it is reasonable to judge that n-type products are in short supply in the short term and seize the n-type market by expanding production.

Solar cells are classified into P-type and N-type according to wafer properties. P-type has low cost, short life and low conversion rate; N-type has long life, high conversion rate but high cost.

the fixed increase of 9.7 billion yuan this time is mainly for the above-mentioned 56 billion yuan investment project "blood transfusion". Many investors have questioned on platforms such as stock bars and snowballs that JinkoSolar's large financing is too frequent.

As a peer, Longji Green Energy (601012.SH) has been listed in A- shares for more than 11 years, and the amount of direct financing in 11 years is only 26.384 billion.

It is worth mentioning that the early layout of Jingke Energy has also gained an excellent report card under the background that the photovoltaic industry is booming again. According to the financial report for the first half of 2023, JinkoSolar achieved operating income of 53.624 billion billion yuan, an increase of 60.52 per cent over the same period last year, and net profit of 3.843 billion billion yuan, an increase of 324.58 per cent over the same period last year.

and one of the important factors for the performance growth is that after the expansion, the company's N-type TOPCon battery has entered the stage of mass production.

In fact, there are not a few photovoltaic companies that finance the expansion of production. According to Oriental Wealth Choice statistics, in the first half of 2023, 60 enterprises in the photovoltaic industry launched nearly 200 billion yuan of financing. However, due to the expansion of photovoltaic financing, the stock price fell and stopped, Jingke Energy is also the leader.

A New Round of PV Overcapacity

Is an elimination inevitable?

Investment is risky, financing needs to be cautious! The stock price drop also sounded a wake-up call for Jingke Energy's financing path. Under the intensified arms race in the photovoltaic industry, many home furnishing giants have crowded into the track. If the industry expands at the current speed, overcapacity may only be a matter of time.

It should be noted that from the perspective of the industrial chain, the photovoltaic industry chain includes upstream silicon materials, silicon wafers, midstream batteries, modules, downstream battery inverters, construction and operation. And the position of each enterprise in the industry chain is not exactly the same.

TCL Central mainly around the photovoltaic silicon wafers, photovoltaic cells and components and other upstream areas of the layout, while in recent years the company has also begun to have a strong correlation of photovoltaic power generation and other areas of expansion. TCL Central recently released the latest semi-annual report forecast shows that the first half of the net profit is expected to be 4.48 billion yuan to 4.68 billion yuan, an increase of 53.57 to 60.42.

compared with the layout of TCL's central and upper reaches, skyworth pays more attention to the terminal field in photovoltaic business. skyworth sells photovoltaic power station products to families. according to skyworth group's 2022 financial report, the company's total installed capacity of distributed photovoltaic power stations has leapt to the first camp in the industry. In the year when entering the photovoltaic industry, Skyworth's revenue was only 0.104 billion yuan. In just two years, Skyworth's new energy business revenue has reached 11.934 billion billion yuan in 2022, an increase of 191 percent over the same period last year.

however, although skyworth's model can quickly scale up and scale up by occupying the tuyere of the industry, its low competition threshold will make the enterprise's market dominance weak. it is not only subject to the upstream solar photovoltaic manufacturers, but also easy to be imitated and followed up and surpassed by peers in the downstream market.

Gree, Midea and Haier are committed to exploring the system solution of photovoltaic, household appliances and household energy storage integration, bringing new space for families to upgrade green new energy. However, the volume is not large. Take Gree as an example. In 2022, Gree's green energy sector revenue was 4.7 billion yuan, an increase of 62% year-on-year, but Gree's green energy business revenue accounted for 2.5 percent of total revenue, not to mention new energy in its green energy sector. Energy vehicles and other businesses.

in a word, skyworth has entered the top three in the household photovoltaic market by virtue of its first-mover advantage, while TCL and TCL have extended their business tentacles to the upstream photovoltaic production end, fighting in the photovoltaic glass and silicon wafer markets with higher technical barriers, and midea is the slowest among them.

According to the "Southern Metropolis Daily" report, as the head companies of the photovoltaic industry chain have successively disclosed their performance forecasts for the first half of 2023, the market is generally immersed in an optimistic atmosphere of performance. However, the photovoltaic industry is facing a period of overcapacity, and the risk of industry reshuffle should not be underestimated.

In the first half of 2023, the prices of the main material links of the photovoltaic industry chain showed a sharp downward trend, from upstream to downstream (silicon material-silicon wafer-module) in turn. Since the end of June, TCL Central and Longji Green Energy have been leading silicon wafers by a large margin.Lowering the quotation initially showed the hidden worries of "overcapacity.

At the 16th International Solar Photovoltaic and Smart Energy (Shanghai) Conference and Exhibition in 2023, Li Zhenguo, founder and president of Longji Green Energy, said: "there has been overcapacity in the photovoltaic industry. In the next two to three years, more than half of photovoltaic manufacturers may be forced to withdraw from the market." JinkoSolar also stated in its 2022 annual report that leading companies in the photovoltaic industry are actively expanding production capacity, making future market competition more intense. The company has the possibility of weak market development and poor marketing promotion, which leads to the risk of new capacity digestion.

will "photovoltaic marshal" repeat the mistakes of Li Hejun?

risks are great and opportunities are great. Li Xiande, chairman of Jingke Energy, said in his 2023 New Year's speech, "It's time to do some big things." Also let the outside world see this looks gentle photovoltaic big wolf side.

in 2006, Li xiande, who was only 31 years old, set up jingke energy, mainly to make raw materials for his eldest brother Li xianshou's yuhui sunshine.

However, affected by the global financial crisis in 2008, the acquisition and expansion of Yuhui Sunshine suffered heavy losses, causing the stock price to fall back to the edge of $1/share.

Although the eldest brother's Yu Hui sunshine is facing a delisting crisis, Li Xiande is still obsessed with photovoltaics. In 2011, he established Jingke Photovoltaic (now "Jingke Technology") in Shangrao, focusing on the development and operation of photovoltaic power stations. As Li Xiande can be regarded as the youngest "post -75" founder in the head echelon of the photovoltaic industry, he also has the title of "photovoltaic marshal" in the industry.

In 2015, Hanergy, the leader in the photovoltaic industry, suffered a short sale and its share price fell precipitously, and then the whole industry began to experience cold weather. In the same year, Yu Hui Sunshine also delisted from the New York Stock Exchange.

Big brother Li Xianshou's business failed. In contrast, Li Xiande's photovoltaic business is booming. From 2016 to 2019, JinkoSolar's PV module shipments ranked first in the world for four consecutive years.

Today, the market value of Jingke Energy and Jingke Technology is nearly 140 billion yuan.

"Jingke's two listed companies" made the Li Xiande family rank 93rd in the "2023 New Wealth 500 Rich List" with 35.3 billion wealth, and won the "Jiangxi Richest Man".

But at the same time, Li Xiande also felt the pressure. He once said with emotion, "At present, the difficulty of project financing is still the weakness of photovoltaic application scale development." On the other side of the coin, Jingke Energy seems to have entered a "strange circle" of financing-expansion-refinancing-re-expansion ".

More importantly, both of Li Xiande's listed companies are heavily indebted. As of the end of June 2023, the net cash flow generated by JinkoSolar's investment activities reached -7.159 billion yuan, compared with -6.298 billion yuan in the same period last year; the total liabilities were 89.983 billion yuan, and the asset-liability ratio was as high as 74.4.

and Jingke Technology, known as the "first share of private photovoltaic power plants", has also exceeded 25 billion in 2022, with an asset-liability ratio of 66.61 percent, reaching a record high.

it is worth mentioning that in jingke energy's 2022 annual report, Li xiande's annual salary dropped from 5.92 million yuan in 2021 to 0 yuan in 2022.

Also holding the script of expansion and high debt is Li Hejun, founder of Hanergy Group. At the beginning, he set up 9 thin film power generation production bases across the country to expand production, with a total investment of more than 200 billion yuan. In 2015, Li Hejun became China's richest man with a fortune of 160 billion yuan.

Just as Li Hejun was ready to show his skills, the crisis came quietly. Two overseas funds are eyeing Hanergy, one of which is Dialectical Capital, an overseas hedge fund that has been shorting Hanergy, and the other is Lakewood Capital. Subsequently, on May 20, 2015, Hanergy Thin Film Power was questioned about the existence of a large number of related transactions, suspected of manipulating the stock price, the stock price plummeted 47%, the market value of hundreds of billions of dollars.

The reality is that Hanergy's financial data does have a lot to do with related party transactions. In 2013, Hanergy Film's related transactions reached 100 percent. In 2014, related party transactions decreased slightly but still reached 62%, and the top five customers accounted for 98% of sales.

In addition, the stock price rise of Hanergy Film from 2014 to 2015 is also "strange". Some media have questioned that "after 25 months of observation, Hanergy can always see a sharp rise in the stock price ten minutes before the close, and Hanergy's stock has soared by 1048 in a year."

After such a crisis, Hanergy's liabilities for thin-film power generation totaled $14.828 billion at the end of 2018, compared to just $0.314 billion in book cash over the same period. In 2019, Hanergy Group has another large-scale wage arrears. With the bankruptcy announcement issued by the Beijing No. 1 Intermediate People's Court, nine core companies under the richest man Li Hejun, including Beijing Hanergy Film and Hanergy New Materials, entered the bankruptcy liquidation process.

success is also photovoltaic, failure is also photovoltaic, Li Hejun's lesson should arouse a new round of gambling photovoltaic capital vigilance, to avoid repeating the same mistakes.

What do you think of JinkoSolar's 9.7 billion with about 24.9 billion on its account and financing? Let's have a chat in the comments section!