Although China's photovoltaic industry is in a pes

2022-09-21
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Although China's photovoltaic industry is in a pessimistic situation, it is not yet time to despair.

after being kicked out of the booming U.S. market by the U.S. government for the same reason, now hundreds of Chinese photovoltaic enterprises may be kicked out of the market again by the traditional large solar energy consumer Europe for the same reason. Under successive blows, Suntech Power and LDK, the two major photovoltaic enterprises in China, are on the verge of bankruptcy. Their market value has fallen by more than 95% compared with the peak, and is currently only $130million and $170million respectively

therefore, pessimism and even despair arose spontaneously: this industry, which was once high hopes for industrial transformation and upgrading by the Chinese government, seemed to be on the brink of bankruptcy as a whole. Yes, the situation is indeed pessimistic enough, but it may not be the time of despair, especially when we compare it with the rise mode of other emerging industries

looking at the development history of China's photovoltaic industry for more than ten years, it is not difficult to see that this industry has been labeled as a model of China's industrial structure transformation since its birth. From all aspects, it is an ideal target: China's economy needs energy security, and solar energy is an inexhaustible renewable energy; China needs to bid farewell to simple low value-added manufacturing, and the photovoltaic industry is in line with the characteristics of "from scratch, from less to more, high scientific and technological content", and in line with the characteristics of high value-added industries

more importantly, the photovoltaic industry requires higher initial investment capital, and the difficulty of the production process has been greatly reduced by high-tech equipment, and these two are exactly the appetite of China's past government driven and investment driven economic growth model, and are guaranteed by the assessment of government officials

the advantage of this mode is that it can artificially reduce the entry threshold of this industry, so that the industry can prosper rapidly. It's true that this will inevitably lead to trouble, but as the health and complexity of the Internet industry today, the formnext demonstration shows how FDM printers can deposit silicone layers and use heat energy to enhance cross-linking prosperity when equipped with syringes. It is inseparable from the madness and foam splashing around 2000. It is foam that attracts the attention of first-class technicians, entrepreneurs and capital, thus accumulating strength for the take-off of the industry

in just a decade, a group of leaders such as Suntech, LDK and Yingli have emerged in China, ranking among the top in the world in terms of asset size and income size. You can't say that China's policies in this industry are ineffective or even failed. Yes, now many of these companies are at risk of bankruptcy, but taking the development history of the Internet industry as an example, there may be new ideas: the Internet has also experienced many times of squeezing the foam before moving towards healthy and rational growth, and who can say that this is not the process of squeezing the foam in the photovoltaic industry

what we need to learn from the Internet industry is the way the government plays a role in the rise of the Internet industry: the key to the rise of the Internet is that the government establishes an environment suitable for entrepreneurship through a large amount of investment in infrastructure such as telecommunications, rather than directly intervening in the market. Even in China, this principle has been miraculously implemented most of the time, which has led to China's great Internet achievements today - the world's largest number of Internet users, Tencent, Alibaba, Baidu and other global capital market leaders

compared with the Internet, the Chinese government's intervention in the photovoltaic industry is slightly direct: in order to compete for the inflow of entrepreneurial talents and capital in the photovoltaic industry, and even improve the scientific and technological content of the local economy, local governments have provided a series of support to enterprises in good faith (many support is also common in European and American countries, which is not an shameful thing), These supports temporarily artificially reduce the entry threshold of the industry and the operating costs of enterprises, which is conducive to the rapid start-up of the industry

in a sense, the government's support for the photovoltaic industry is more effective than in the Internet industry, because the photovoltaic industry is an industry with a very high demand for fixed assets. Once these assets are invested in place, the scale of the industry can also expand in a predictable way

take the top three companies in the global photovoltaic industry as an example by the end of 2011. The total assets of LDK were $6.85 billion, first solar was $5.78 billion, and Suntech Power was $4.54 billion. The property, plant and equipment of the three companies accounted for 56.5%, 31.5% and 34.6% of the total assets respectively, and the asset income ratio (the total assets required to generate a dollar of income) was 3.17, 2.1 and 1.44 respectively. From these data, we can see two points:

? Photovoltaic enterprises must invest a large amount of money in the purchase of fixed assets, but this may also imply that many technologies in this industry have been condensed into equipment, and the technical threshold has actually been reduced, especially in the upstream silicon wafer production link (servic LDK is a typical example), which means that the biggest difficulty is the capital of equipment investment, which is not difficult in China

? Equipment investment accounts for a high proportion of assets, which in turn will increase the fixed cost of its products, which leads to the fact that once overcapacity occurs, enterprises will spare no effort to use it as a method to reduce the weight of space systems and improve performance (theoretically as long as it is higher than the variable cost)

and these data cannot prove that Chinese enterprises are necessarily inferior to Western companies. In terms of the ability to convert assets into income, Suntech Power even far exceeds first solar. In other indicators, Suntech Power also performs much better than other Chinese companies, although not as well as first solar. Such as gross profit margin

in the past five years, Suntech's gross profit margin fell to 0.6% in the leading quarter of this year, except that it fell to 13% in 2011 and was affected by the double reaction in the United States. At other times, it was around 20%, which made the company still profitable. However, Savi was not so lucky. Although its gross profit margin was as high as 32.5% in 2007, mechanical foaming method: mechanical foaming method is with the help of strong mixing of machines. Then, with a large number of enterprises across China entering the upstream silicon wafer manufacturing sector, the price fell sharply, and its gross profit margin was even negative in 2009 and 2011

in comparison, the gross profit margin of first solar in 2011 was still as high as 35.1%, while in the previous years, it was basically between 40% and 55%. Although this is partly due to the adoption of more advanced thin-film photovoltaic manufacturing technology, which gives it a certain advantage in the overall cost, this is not all

compared with Chinese companies, first solar pays more attention to R & D investment. From 2009 to 2011, its R & D investment accounted for 3.8%, 3.7% and 5.1% of revenue respectively, while Suntech was 1.71%, 1.39% and 1.23% respectively, and Savi was 0.76%, 0.43% and 2.16% respectively

therefore, it seems that the current dilemma of China's photovoltaic industry can be explained in this way: due to the support of the government regardless of cost and the formation of the misunderstanding that investors think the future will be better, the market valuation principle of capital cannot be maintained here, and there is no possibility to adjust the market through the management of return on investment. As a result, a large number of small and medium-sized enterprises are involved, making the whole industry just rise, It has been trapped in overcapacity

according to IMS data, the production capacity of crystalline silicon photovoltaic modules in China has reached about 32.6gw in only one year, which is very close to the global demand in one year. The asset liability ratio of several companies also reveals how much the industry depends on external capital from another aspect: the debt ratio of Savills was 47% in 2007, which was as high as 87.7% in 2011; the debt ratio of Suntech was 58% in 2007, which has risen to 79% in 2011; In contrast, first solar's debt ratio was 20% in 2007 and only 37% after a sharp rise in 2011

on the one hand, this mode makes Chinese enterprises extremely vulnerable to anti-dumping investigations in foreign markets, and also plays a role in driving out good money for some potential high-quality companies. In the photovoltaic industry, enterprises have two main ways to improve the rate of return: one is to improve the efficiency of photovoltaic conversion through investment in research and development, so as to obtain returns; the other is to continuously invest in scale, so as to reduce costs through scale effect

compared with the former, the latter is more direct in the short term, but it is easy to fall into overcapacity and price war. Once the price war begins, companies that take the former approach will not be spared. In fact, they face a sad situation in which they cannot earn short-term and long-term profits. In order to compete with local small and medium-sized enterprises rather than powerful foreign competitors, potential good companies have to reduce their investment in R & D and invest in scale to earn short-term shares and returns

now that the problem is found, the next rescue measures are relatively clear:

first of all, the urgent task is to establish a set of incentives and support measures that link the support strength to the technical level (such as conversion rate), and completely abandon the past incentive policies based solely on scale; Secondly, choose two or three companies with certain competitiveness, and let China's state-owned traditional energy giants come forward, or encourage powerful private enterprises interested in participating in the market to participate in its privatization, and leave the retention of other enterprises to the market

then, gradually start China's photovoltaic market, and always look at the policies of the European and American markets for Chinese enterprises, and adopt equal opening policies. In this way, even if the European and American markets are completely lost, Chinese enterprises can have a period of accumulated strength by excluding European and American enterprises from China

finally, the most important thing is that the government should retreat behind the scenes and become a simple game rule maker, so that the market pricing principle of capital can take effect again here. Recently, it is rumored that a local government is trying to help a troubled company through financial allocation. Although this can solve the urgent need, it is the next choice. Zhonghua glass () Department

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