LONGi reports Q1 2020 and full year 2019 results; shows strong revenue growth led by top-notch technology leadership and substantial global shipments

Global News

On April 23, 2020, LONGi, the global leading solar technology company headquartered in Chinese city of Xi'an, Shaanxi Province, China, released its 2019 annual report and Q1 2020 report to shareholders worldwide, reporting strong revenue growth led by top-notch technology leadership and significant increase in global shipments.

Higher revenue from operations reflects strong bankability

LONGi’s revenue from operations has increased by 49.62% over 2018 to reach 32.897 billion yuan ($4756.7 million)1 in 2019. Net profit attributable to shareholders of the listed company has increased by 106.41% year-on-year (YoY) to 5.28 billion yuan ($763.45 million)1 in 2019. Basic earnings per share for the reporting year is 1.47 yuan (21 US-cents)1 and weighted average return on equity is 23.93%. The company’s net cash flow for the year is 8.16 billion yuan ($1179.8 million)1, reflecting a YoY increase of 595.48%.

In Q1 2020, revenue from operations is reported at 8.599 billion yuan ($1233.6 million)2, a 50.60% increase compared to the corresponding quarter in 2019. Net profit attributable to shareholders of the listed company during the reporting quarter is 1.864 billion yuan ($267.4 million)2, 205.07% higher than that in the corresponding quarter in 2019.

As of March 2020, LONGi's total assets have reached 63.151 billion yuan ($8913.21 million)3. Its asset-liability ratio stands at 52.29%, down from 2018. Compared to Q1 2019, days of accounts receivable decreased by 23 days in Q1 2020. LONGi’s revenue from operations is expected to reach 49.6 billion yuan ($7116 million)2 in 2020.

LONGi has successfully maintained its ability to handle risk and cope with market changes, giving priority to its financial health and operational strength. At the same time, LONGi’s asset-liability ratio has been among the lowest across global photovoltaic manufacturers.

In the Q1 2020 PV ModuleTech Bankability Ratings report, LONGi became the first and, so far, the only module supplier to receive the highest AAA rating. The most recent BloombergNEF’s Global PV Outlook also rated LONGi the highest Altman-Z score amongst all pureplay PV manufacturers worldwide. LONGi’s bankability is recognized by financial institutions across the world.

Significant gains in the overseas market and worldwide shipments

LONGi has been actively enhancing its overseas market share and brand influence; and has achieved significant breakthroughs in its global business expansion journey. In 2019, it sold 4.702 billion pieces of monocrystalline silicon wafers, which is an impressive 139.17% increase over the sales registered in 2018. The shipment of cells & modules reached 9.08 GW in 2019, an increase of 28.39 per cent over the past year. The overseas shipments reached 4.991 GW, accounting for 67% of the total sales and reflecting an increase of 154.59% YoY.

LONGi started promoting bifacial technology very early in the industry and its reliability has been verified by various applications around the world. At the end of Q1 2020, LONGi’s bifacial module shipment has reached 5 GW, ranked first in the world.

According to PV InfoLink, market share of LONGi’s monocrystalline products has increased to about 62% in 2019 and is further set to increase to over 85% by 2021. For several years in a row, LONGi has accounted for the world's largest monocrystalline module shipments, ranking No. 1 in terms of these shipments, while also promoting the transformation and upgradation of the global energy structure.

Growing production capacity and increasing efficiency to meet global demand

In 2019, the company’s production capacity for monocrystalline silicon wafers reached 42 GW, while that monocrystalline modules reached 14 GW. In 2020, LONGi aims to reach a monocrystalline silicon wafer production capacity of 75 GW, and monocrystalline module production capacity of 30 GW.

The newly built production line at LONGi facility is currently the highest in the industry, and the per capita output of this facility will also be at the forefront of the industry in future. According to estimates, its efficiency will ultimately increase by about 35%. By end-2020, LONGi’s production capacity of larger size modules with M6 wafers (166 mm) will exceed 20 GW.

With a higher scale of production and continuous improvement of PERC technology, LONGi's manufacturing capacity will continue to expand gradually, providing high-efficiency monocrystalline products to global customers and developing a stronger guarantee for the global market.

Breakthrough innovation leads to efficiency improvement and product evolution

As of December 31, 2019, LONGi invested 1.677 billion yuan ($242.48 million)1 in R&D, accounting for 5.1% of revenue from operations. The sustained R&D investments have brought strong support for making breakthrough innovations. During the year, LONGi formed a professional team of 630 R&D personnel; established R&D centers for silicon, cells and modules; and built an R&D system with global competitiveness. LONGi has accumulated 702 patents at the end of the reporting period.

LONGi has made positive progress in the aspects of process optimization and improvement, energy consumption control, fine wire application, thin slice cutting, domestic substitution of auxiliary materials and intelligent manufacturing. The non-silicon cost of the product has further reduced – the non-silicon cost of monocrystalline ingots has decreased by 25.46% YoY, while the non-silicon cost of wafers has decreased by 26.5% YoY.

In terms of cells and modules, LONGi has achieved continuous technological breakthroughs. The product conversion efficiency has been increasing consistently to reach a world record of 22.38%; and large-scale mass production technical solutions have been continuously helping in increasing output and improving product performance.

LONGi has entered into a global, non-exclusive, a pattern of cross-licensing agreement with Shin-Etsu Chemical Co., Ltd on March 25, 2020. Any application of LONGi’s products that relates to Gallium-doped technologies will be legitimate globally.

During the reporting period, LONGi launched the new products of M6 silicon wafers and Hi-MO4 module, which further led to and promoted a continuous reduction of the comprehensive cost of the industrial chain and LCOE, and helped meet the market demand for efficient products. By end-2019, the global intended order of Hi-MO4 module exceeded 10 GW.

Joining global initiatives and responding to global crisis, LONGi assumed increasing responsibility for the sustainable future

On March 12th, 2020, LONGi joined a global corporate leadership initiative, RE100 which is led by The Climate Group in partnership with CDP, committing to 100% renewable power across its entire global operations by 2028. By joining the RE100 initiative, LONGi has assumed greater responsibility for global development of the low-carbon economy and achievement of climate goals.

The sudden outbreak of the COVID-19 has impacted the world, and as a socially responsible company, LONGi also actively participated in the nation’s public welfare activities and donated 15 million yuan ($ 2.16 million)1 through the LONGi One Percent Foundation of the Red Cross Society of China to fight against the “invisible war”.

During the pandemic, while ensuring production, LONGi has thoroughly protected personal health and safety of employees, and implemented strict prevention and control measures by providing masks to employees, undertaking strict disinfection of office areas, conducting multiple body temperature tests every day, rotating work shifts and separating dining among other measures. None of LONGi’s nearly 40,000 employees around the world have been diagnosed or suspected of COVID-19.

The pandemic would inevitably have an impact on the global market, but it is controllable, and China’s photovoltaic market has been gradually overcoming its impact. Based on the vertically integrated global industrial chain, LONGi has flexibly adjusted the production capacity plan, and controlled the overall impact.

From 2009 to 2019, the global cost of photovoltaic power has dropped by 81%, which also means that photovoltaic has gradually become the most competitive electricity product/technology in the world. According to predictions, photovoltaics will have more than 1,000 GW of new market space in the next 10 years, and as technology upgrades continue to accelerate, the cost of solar power generation will drop rapidly and photovoltaics will emerge as clean energy with the best price-performance ratio.

LONGi’s follow-up production capacity is still in accordance with the plan to advance steadily. LONGi is willing to work with global partners to promote continuous optimization of the energy structure and smooth realization of the goal to achieve 100% renewable energy worldwide by 2050.

Notes: The financial figures in the FY2019 and Q1-2020 reports are denominated in Chinese Yuan (CNY). The converted USD amount is for reference only.

1 USD-Chinese Yuan exchange rate of 1:6.9159 is used in the 2019 Annual Report

2.USD-Chinese Yuan exchange rate of 1:6.9702 is used in the Q1 2020 report

3 USD-Chinese Yuan exchange rate used in the Q1 2020 report to calculate the total assets is 1:7.0851