the financial association on September 27 (reporter Liu mengran) under the background of "tightening" of refinancing stages, tongwei shares (600438.SH) voluntarily terminated the fixed increase plan of 16 billion yuan. The termination of the fixed increase is usually interpreted as a negative, but the company's move is considered by some market participants to have a certain positive significance.

the reporter of the financial association noted that since this year, the photovoltaic industry has launched more than 20 plans to increase and issue bonds, involving all aspects of main materials and auxiliary materials such as inverters, with a total financing amount of more than 100 billion yuan.

Active termination of fixed increase

yesterday evening, Tongwei shares announced that the termination of the 2023 year to issue shares to specific objects. For the follow-up funding needs of the project, the company said that it will make reasonable use of its own funds, loans from financial institutions and other financing methods to coordinate funding arrangements to ensure the smooth implementation of the project.

Regarding the termination of the fixed increase, Tongwei shares explained in this announcement that based on the changes in the current capital market environment, the company's value is obviously underestimated. In order to safeguard the interests of all shareholders, the company intends to terminate this issue to specific objects. Issue stock matters.

in April this year, Tongwei shares issued a plan to issue shares to specific targets in 2023, and planned to raise no more than 16 billion yuan for the 200000-ton high-purity crystalline silicon project and the Yunnan Tongwei hydropower high-purity crystalline silicon green energy project (phase II 200000-ton/year high-purity crystalline silicon project). The total investment of the two projects reached 20.188 billion yuan.

The Caixin News Agency reporter noted that these two projects are of great significance to Tongwei. Through the increase in high-purity crystalline silicon production capacity, its overall profitability may be further improved. In the first half of this year, the company's polysilicon production cost was less than 40000 yuan/ton, leading the industry. By virtue of the scale and cost advantages, Tongwei shares polysilicon basically achieve full production and full sales, products are in short supply.

The 2022 financial report was released at the same time as the fixed increase plan. The company achieved revenue of 142.422 billion yuan last year and net profit attributable to shareholders of listed companies of 25.726 billion yuan. It is one of the most "profitable" companies in the photovoltaic sector.

Tongwei shares, which are "not short of money", have been questioned after the release of the fixed increase plan.

As of September 26, the company's closing price was 31 yuan per share, with a total market value of 139.6 billion yuan and a price-earnings ratio (static) of 5.42 times. Choice data show that compared with the high of 67.86 yuan/share in July last year, the company's market value has shrunk by nearly 50%. In fact, the continued stock price downturn has also caused investor dissatisfaction. On the interactive platform, some investors believe that it is caused by the uncertainty of additional issuance.

It is worth mentioning that although the fixed increase project was terminated, the company previously disclosed an announcement that it plans to apply to the China Association of Interbank Market Dealers for the issuance of debt financing instruments (DFI) of no more than 10 billion yuan. The application was approved in August.

Over 20 PV companies have issued financing plans during the year

in the photovoltaic industry, "not to expand production will be beyond" has become a consensus. In order to take advantage of scale and seize the market, enterprises generally invest heavily, and the resulting financing needs are also obvious.

the reporter of the financial association news agency noted that since this year, more than 20 enterprises in the photovoltaic sector have announced financing plans such as fixed increase and debt issuance. among them, more than 10 billion enterprises have not only announced the termination of tongwei shares, but also tianhe solar energy (688599.SH) and TCL central (002129.SZ) (convertible bonds); more than 5 billion yuan include jingke energy (688223.SH), hongyuan green energy (603185.SH6) and sh6).

inverter is also a key area of financing expansion, Jinlang Technology (300763.SZ), Goodway (688390.SH), Shangneng Electric (300827.SZ), Deye shares (605117.SH), Kostada (002518.SZ) have disclosed a fixed increase plan to raise funds to expand the production line.

According to the disclosure plans of various companies, the total amount of funds raised has exceeded 100 billion yuan, and the enthusiasm of enterprises to expand production mainly comes from strong terminal demand. Only in the first eight months of this year, the domestic PV new installed 113.16GW, more than last year. Some agencies predict that China's new PV installed capacity will be raised to 170GW this year, while the global installed capacity is also up to 400GW.

At present, Tongwei shares continue to promote the expansion of production. According to the plan, the company's high-purity silicon production capacity will reach 800000-1 million tons in 2024-2026. After the termination of the fixed increase, the company said it would ensure the normal progress of the relevant projects.

In this regard, a capital market person told the Caixin News Agency that the termination of the fixed increase is usually interpreted as a negative, which is the narrowing of financing channels. But for some head companies, the move may be interpreted by the market as the company has enough internal funds to support development. Especially in view of the dilution of earnings per share due to the issuance of additional shares, or the possibility of harming the interests of small and medium-sized shareholders after the lifting of the ban on low-price fixed increases, the termination of fixed increases has positive significance.

But the reality is that listed companies usually do not easily give up financing opportunities to expand production. At the performance presentation meeting held by Hongyuan Green Energy yesterday, the company's management said in response to investors' questions that the fixed increase project is an important strategic plan for the company to deal with market risks. In the future, as the investment projects gradually reach production, the expected returns will be gradually realized, and the company's sustainable operation ability and profitability will be further enhanced.

(Caixin News Agency reporter Liu Mengran)