Who Is The Leader In Photovoltaic Industry?

The cover character of the latest issue of Forbes in Chinese is Li Zhenguo. On the cover there is a sentence: Li Zhenguo, President of Longji, is leading the global growth of China's photovoltaic industry.

Many Chinese entrepreneurs have been on the cover of the magazine, including Ding Lei of Netease, Zhang Ruimin of Haier, Guo Guangchang of Fosun, and Gao Dekang of bosden Elites from all walks of life turn up. Li Zhenguo has been promoted to the position of representative of China's photovoltaic industry.

This is not a misrepresentation. In the past year, the market value of Longji shares under its control has increased several times, and the highest point has exceeded 460 billion yuan. Li Zhenguo's wealth also went up.

Under the management of Li Zhenguo's team, the labels on Longji shares have also increased. In addition to the "photovoltaic enterprise with the highest market value", the industry has not spared no effort to give its "king of single crystal" and "the most profitable photovoltaic company" with positive colors. But at the same time, negative definitions such as "production expansion maniac" and "price killer" are also changing.

Where there are people, there are rivers and lakes. In the decades of development of China's photovoltaic industry, there are many heroes: Shi Zhengrong, Miao Liansheng, Peng Xiaofeng, Li Hejun, Jin Baofang, Gao Jifan, Qu Xiaohua, Cao Renxian, Liu Hanyuan, Zhu Gongshan and Li Zhenguo All of them have left a strong mark in the history of photovoltaic industry in China. Some of them have fallen into the altar, some are evergreen, and some are in the prime of their lives.

And in the fierce battle among photovoltaic giants, "close combat" and "joint vertical and horizontal" are common things. But it is undeniable that their decision-making and confrontation have brought great influence on the current pattern of photovoltaic industry.

Among them, the competition and cooperation relationship between GCL group and Longji shares is a typical competitive epitome of domestic photovoltaic industry. From the early single polycrystalline dispute, to the alliance of the industrial chain, and to today's Bingshi progress. The two new and old photovoltaic leaders vividly explained that "there is no eternal enemy, only permanent interests".

The dispute of monocrystal and polycrystalline

For Zhu Gongshan and Li Zhenguo, 2006 is the key year for them to enter the photovoltaic industry. In this year, GCL group formally laid out the field of photovoltaic materials with silicon materials as the starting point; after in-depth study and judgment of various technical routes in the photovoltaic industry, Longji Co., Ltd. chose the single crystal line as the technical development direction, and also exerted its skills in the field of photovoltaic materials.

But no one would have thought that in ten years' time, their enterprises would become the leading role in the most famous "single polycrystalline technology route dispute" in the history of China's photovoltaic industry.

The so-called single crystal and polycrystalline technology route mainly refers to whether the photovoltaic silicon wafer is made of single crystal or polycrystalline material. As silicon wafer is in the forefront of the photovoltaic industry chain manufacturing, the selection of single crystal and polycrystalline technology route will directly affect the selection of subsequent manufacturing process of the whole industry chain.

The reporter of 21st century economic report has noticed that as early as 2006, there was a situation of single and polycrystalline products parallel in photovoltaic industry. However, at that time, the single crystal technology did not have advantages in terms of cost and other aspects, and the cost performance ratio was far behind the polycrystalline technology products, which led to the situation that polycrystalline technology products dominated the world for nearly a decade.

Five years from 2016, China's photovoltaic industry belongs to the "GCL era" of Zhu Gongshan. He started his career in thermoelectricity and photovoltaic. After entering the field of photovoltaic materials, Zhu Gongshan became the "Silicon king of the world" in less than ten years. This name not only recognized the new energy ship he created, but also showed that the photovoltaic assets of GCL group had absolute advantages in terms of scale and profitability.

According to the public information, GCL group is one of the few enterprises in China that has formed a complete closed-loop photovoltaic industrial chain and has been active in the front-line so far. It is a vertical integrated industrial chain covering silicon materials, silicon wafers, batteries, modules, system integration, and development and operation of photovoltaic power stations. It has four A-share and H-share listed companies. With this, GCL group has been ranked first in the global top 500 new energy enterprises for many times.

Zhu Gongshan once landed safely in two industrial crises.

For the first time, the financial crisis swept the world in 2008, and the negative impact of the collapse of European and American photovoltaic market led to the first reshuffle of China's photovoltaic industry. However, during this period, GCL group of Zhu Gongshan went against the trend and successfully injected its silicon material assets into poly GCL energy, a Hong Kong listed company, to realize asset securitization.

For the second time, the "double anti" strategy implemented by Europe and the United States for China's photovoltaic products in 2012 has brought the domestic photovoltaic industry into a new round of shuffling. During this period, the giants in front of Zhu Gongshan collapsed one after another, and Wuxi Suntech, Jiangxi Saiwei and Yingli energy entered the stage of bankruptcy and reorganization. However, GCL group decided to "copy the bottom" silicon material with its prior expansion decision. In 2014 and 2015, Zhu Gongshan sent its power station and component businesses to the capital market successively, and GCL new energy and GCL integrated were listed, and their capital territory was expanding.

However, Zhu Gongshan, who grasped the industrial opportunities, failed to keep up with the industrial reform.

During SNEC 2016 [international solar photovoltaic and smart energy (Shanghai) exhibition and forum, one of the largest photovoltaic exhibitions in the world], Longji shares put forward the promise that "the price difference between single crystal and polycrystalline silicon sources will be maintained within 0.6 yuan per chip, so as to ensure that the price difference between single crystal and polycrystalline silicon at the module end can be maintained within 0.1 yuan per watt", if Zhu Gongshan does not follow With price pressure alone, but with the elephant turning around in time, GCL group may not be so passive in the industrial competition pattern in the next few years.

The fierce battle of monocrystal and polycrystalline technology is triggered by the policy inclination of domestic photovoltaic "leader" plan.

Since 2015, in order to speed up the speed of photovoltaic affordable access, China plans to implement the photovoltaic "leader" plan every year, that is, through the formulation of incentive policies, to encourage the photovoltaic products, enterprises or units with the highest energy efficiency in the same comparable range to carry out the technology research and development, publicity and promotion. However, most of the bids for the "leader" project are inclined to single crystal components, which has caused controversy. At that time, GCL group was at the forefront of questioning.

Price, efficiency, technology, market share and other indicators are the focus of the debate in the debate over single polycrystalline. When GCL group first faced the challenge of Longji shares, it mostly used the product "price difference" to deal with it. However, the price difference can not match the industry's demand for the improvement of conversion efficiency. In addition, the monocrystal technology camp led by Longji Co., Ltd. has also rapidly reduced the production cost by virtue of domestic diamond wire cutting technology and other factors. The price performance ratio of single crystal products is rising.

In 2019, the proportion of single crystal and polycrystalline products ushered in the year of switching, and the share of single crystal products exceeded that of polycrystalline products for the first time. The dispute over the technical route of single crystal and polycrystal also came to a conclusion with the launch of the product like single crystal module which combines the production technology of single crystal battery and the technology of polycrystalline ingot in that year.

A strong enemy becomes a partner

However, it is the internal pressure of GCL group that makes Zhu Gongshan realize the life and death crisis.

GCL group, which has opened up the whole industrial chain, has become more and more significant in terms of heavy assets, high asset liability ratio and great test of liquidity. The "531 photovoltaic policy" in 2018 seems to be the last straw to crush this new energy giant ship - the debt situation of GCL group fell into a freezing point in 2018. According to the statistics of 21st century economic report, the total liabilities of three photovoltaic listed companies of the group, namely poly GCL energy, GCL new energy and GCL integration, amounted to 100 billion yuan, with an overall asset liability ratio of about 77%.

Financial data show that 2017 seems to be a turning year for the handover of the leading position between GCL group and Longji. In this year, poly GCL energy, the main asset of photovoltaic materials that GCL group relies on most, has made outstanding profits, but its net profit is 1.974 billion yuan, only half of that of Longji. Since then, poly GCL energy fell into a loss. In this year, Longji became the most profitable photovoltaic company in China, and continued to expand profits. "Longji era" comes with the rising stock price.

Walking on the edge of the capital chain fracture, GCL group needs to save itself, and Zhu Gongshan starts subtraction. At this time, the Longji shares under Li Zhenguo's administration were added.

"The first morning we wake up in 2018, the most important thing we need to do is to return our achievements to zero and return the glory to the past." After Zhu Gongshan's 2018 New Year's message was published, many people said that the photovoltaic giant had changed.

Zhu Gongshan began to keep a low profile and humility as he had been fierce and sharp during his glorious period. This year, GCL group also once had an important personnel change, which triggered speculation about whether Zhu Gongshan would hand over his son. Half a year after the promulgation of "531 photovoltaic policy", the legal representative of GCL Group Co., Ltd. (hereinafter referred to as GCL Co., Ltd.) changed, and Zhu Yufeng took over the post of chairman. In terms of the huge and complex organizational relationship of GCL group, the limited change of GCL's commander-in-chief was not the same as that of the whole group, which caused confusion at that time. So, is Zhu Gongshan tired?

Under the pressure of debt, asset light transformation has become the safest way for GCL group. Compared with before, Zhu Gongshan seems to be busier. He needs to rely on his rich contacts to find cash buyers for GCL's photovoltaic assets. During this period, two key roles emerged: Shanghai Electric and China Huaneng. The former intends to acquire nearly half of the equity of Zhongneng silicon, a subsidiary of poly GCL energy, at a price of 10 billion; the latter intends to take half of the equity of GCL new energy.

One is one of the most valuable assets of GCL group, and the other is the one with the most serious liabilities. Some insiders of GCL group once commented on the reporter of 21st century economic report that if the above equity acquisition could be carried out smoothly, GCL group would have extricated itself from the liquidity crisis.

The plan can't keep up with the change. The "531 photovoltaic policy" in 2018 brings "cold winter" to the industry. For buyers, photovoltaic assets are less attractive. The plan of GCL group failed.

On the other hand, in 2018, Longji began to embark on the road of radical expansion of production. With the single polycrystalline dispute becoming increasingly clear, Longji shares through the expansion of production to consolidate the scale advantage. Subsequently, the company plans to take a big step in the component link. In 2020, Longji invested 1.78 billion yuan to acquire 100% equity of Ningbo Yize, a photovoltaic cell and module manufacturing enterprise. The target company has a production base in Vietnam with an annual production capacity of more than 3gw of photovoltaic cells and an annual production capacity of photovoltaic modules of more than 7gw in Vietnam, which shows the ambition of Longji's global layout.

The different development momentum of the two enterprises makes it difficult for GCL group and Longji to have a large-scale cooperation intersection.

As a matter of fact, when the two enterprises were fighting for each other's single polycrystalline in the early years, their alliance friends were tit for tat, which made the relationship between the two companies rather tense in the outside world. In 2019, GCL abandoned the single polycrystalline dispute and reached a deep supply chain cooperation with Zhonghuan, another representative of single crystal technology. In the same year, Longji and Tongwei reached cooperation intention on the cooperation of high-purity crystalline silicon and silicon wafer, forming a distinct competition pattern between "GCL + central" and "Longji + Tongwei". Some industry insiders told reporters of the 21st century economic report that GCL and Longji have opened the door for the alliance of giants in the process of competition.

Today, when the size dispute between 182 and 210 has intensified since November 2020, the "joint vertical and horizontal" of photovoltaic giants has been common. However, Tongwei shares, which used to be allied with Longji, stood in the 210 camp. Its competitor, GCL group, weakened its standing and returned to the starting point of silicon material, and became the silicon material supplier of Longji.

In February this year, poly GCL Energy announced that it had reached a long-term sales agreement with Longji with a contract amount of 7.3 billion yuan. "Polycrystalline silicon sales is not the first cooperation, but granular silicon is the first time." In an interview with the 21st century economic reporter, the insiders of GCL group said that in this long list, GCL will provide granular silicon products to Longji.

At present, the improved Siemens process is the main process of polysilicon production. However, under this process, power, raw materials and depreciation are the main production costs, so the exploration space is limited. It is expected that the process cost can be greatly reduced and the utilization rate of raw materials can be improved by using FBR.

Although there are some disputes about granular silicon technology, the large purchase of Longji is expected to help GCL regain its market share of silicon materials to a certain extent.

Giant new chess game

In fact, since the end of the single polycrystalline dispute, there is almost no direct conflict of interests between GCL and Longji. GCL group restructures its competitiveness around the silicon material end, while Longji continues to build its own vertical integration industrial model.

Of course, two new and old photovoltaic leading enterprises also have their own new plans. Zhu Gongshan has found a new strategic development direction for GCL group: focusing on granular silicon technology and laying out mobile energy circuit; Li Zhenguo's latest action is to lead Longji, a "catfish" with a market value of 100 billion, to stir up the trillion hydrogen energy market.

On the last day of March, GCL held a press conference in Beijing concerning the strategic transformation of its listed company, GCL energy technology. Many enterprises came to support, including Geely Automobile, XCMG new energy vehicle and capital ally CICC. This is the new positioning that Zhu Gongshan has found for GCL energy technology, breaking the stereotype of the public that it is only a power generation enterprise, and reshaping the potential value of GCL energy technology.

Since the fourth quarter of 2020, Zhu Gongshan has been working on granular silicon projects. The price change of poly GCL energy makes the industry pay more attention to granular silicon technology. Zhu Gongshan also confirmed to the 21st century economic reporter that the core of GCL group's intensive cultivation of photovoltaic materials is granular silicon technology.

What Zhu Gongshan wants to do is to strike while the iron is hot, and accelerate the commercialization process of poly silicon technology of poly GCL energy.

But obviously, he is not satisfied with it. The mobile energy strategy of GCL energy technology has become another important content of its re entrepreneurship. In the eyes of the outside world, Zhu Gongshan's choice of cross-border opportunity is quite opportune. The goal of "carbon neutral" and "carbon peak" provides new entrants with greater market opportunities. GCL's granular silicon technology is also closely linked with the goal of "double carbon".

In his new year's address in 2021, Zhu Gongshan jokingly called himself a "carbon neutral worker".

The new strategic direction makes the outside world look forward to whether GCL can rebuild its former glory.

Unlike Zhu Gongshan, Li Zhenguo wants to continue to be a "worker" in the photovoltaic industry chain.

Also on the last day of March, Longji and Zhuque jointly established Xi'an Longji Hydrogen Energy Technology Co., Ltd., with a registered capital of 300 million yuan. "In the context of carbon neutral, Longji will increase R & D investment in the industrial chain, in addition to studying application scenarios and path innovation." In an interview with the media, Li Zhenguo responded to Longji's idea of entering the hydrogen energy field. Wang Yingge, brand general manager of Longji Co., Ltd., also said in an interview with 21st century economic reporter that Longji began to pay attention to and lay out electrolytic hydrogen production from renewable energy as early as 2018, and has formed technical accumulation in the fields of electrolytic hydrogen production equipment, photovoltaic hydrogen production and other fields, and will carry out hydrogen energy industrial layout in the next step.

It has realized the coverage of photovoltaic industry chain from silicon wafer, battery to module, and Longji has gone further and further on the road of vertical integration of photovoltaic industry chain. Before entering the hydrogen energy field, the company's biggest move was to enter the BIPV (photovoltaic building integration) link, and for this reason, it acquired A-share architectural design company Cente shares, which triggered a burst of speculation for BIPV concept in the market.

It is not difficult to find that from the manufacturing end to the application end, the two new and old faucets have new blood.

Photovoltaic giant has ups and downs, the story of the river and the lake never stops.

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