协鑫科技(03800) - 2024 - 中期财报

Financial Summary Financial Summary In the first half of 2024, the company faced significant performance pressure, with revenue sharply declining by 57.7% year-on-year, turning from profit to a loss attributable to owners of RMB 1.48 billion, while financial leverage increased and liquidity ratios decreased Six-Month Performance Summary as of June 30 | Indicator | H1 2024 (RMB Thousand) | H1 2023 (RMB Thousand) | Change | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 8,862,876 | 20,945,903 | (12,083,027) | (57.7%) | | Wafer Sales | 2,342,084 | 7,201,320 | (4,859,236) | (67.5%) | | Polysilicon Sales | 4,861,805 | 11,118,475 | (6,256,670) | (56.3%) | | Profit Attributable to Owners of the Company | (1,479,603) | 5,518,278 | (6,997,881) | (126.8%) | | Basic (Loss)/Earnings Per Share (RMB Cents) | (5.60) | 20.79 | (26.39) | (126.9%) | Summary of Consolidated Financial Position and Key Financial Ratios | Indicator | June 30, 2024 | December 31, 2023 | Change | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Assets (RMB Thousand) | 79,002,291 | 82,768,172 | (3,765,881) | (4.5%) | | Total Debt (RMB Thousand)* | 17,950,896 | 15,939,071 | 2,011,825 | 12.6% | | Current Ratio | 1.36 | 1.57 | (0.21) | (13.4%) | | Quick Ratio | 1.23 | 1.44 | (0.21) | (14.6%) | | Net Debt-to-Equity Ratio | 24.6% | 15.9% | 8.7% | 54.7% | Chairman's Report and CEO's Business Review and Outlook Business Review and Strategic Outlook Despite widespread losses in the photovoltaic industry chain in H1 2024, the company maintained a relatively stable operational foundation by focusing on FBR granular silicon core technology, improving quality, reducing costs, and optimizing management, while also increasing R&D investment and pursuing vertical and horizontal expansion - Despite fierce competition and widespread industry losses, the company maintained a relatively stable operational foundation by focusing on FBR granular silicon technology, optimizing business structure, and implementing strict cost controls, with administrative expenses decreasing by 40% year-on-year[9] - FBR granular silicon technology achieved significant progress, with N-type ratio exceeding 96%, cash cost projected to drop below RMB 30/KG, increased market recognition, full coverage of top-tier clients, and long-term contracts signed until 2027[10] - The company's R&D investment as a percentage of revenue increased, with the cumulative R&D expense ratio exceeding 8% in the first half, a 3.8 percentage point year-on-year increase, to strengthen its technological moat[12] - Strategically, the company centers on FBR granular silicon, extending vertically to upstream industrial silicon and downstream integrated solutions for PV, storage, charging, hydrogen, and computing; simultaneously, it combines granular silicon with perovskite technology, aiming to lead the industry into the perovskite tandem era[16][17] - Silane gas business emerged as a new profit growth driver, with external sales accounting for nearly one-third of the national market. Additionally, 2024 is positioned as a breakthrough year for the company's internationalization, prioritizing the Middle East market[19] Management Discussion and Analysis (MD&A) Performance Overview Affected by severe supply-demand mismatch in the photovoltaic industry, the company's performance turned from profit to loss in H1 2024, with revenue decreasing by 57.7% and a gross loss of RMB 553 million H1 2024 Performance Overview | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | RMB 8,863 Million | RMB 20,946 Million | | Gross (Loss)/Profit | RMB (553) Million | RMB 8,778 Million | | (Loss)/Profit Attributable to Owners of the Company | RMB (1,480) Million | RMB 5,518 Million | Business Review During the reporting period, the company's main businesses were divided into photovoltaic materials and photovoltaic power stations, with photovoltaic materials revenue sharply decreasing by 57.9% and gross margin turning negative due to falling prices, while the power station business remained relatively stable Photovoltaic Materials Business The photovoltaic materials business faced severe challenges in H1 2024, with polysilicon production increasing but revenue decreasing by 57.9% to RMB 8.77 billion and gross margin plummeting to -6.6% due to significantly lower selling prices, despite continuous quality improvements in granular silicon Photovoltaic Materials Business Production and Sales Volume | Indicator | H1 2024 | H1 2023 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Polysilicon Production | 136,359 Metric Tons | 111,054 Metric Tons | +22.8% | | Wafer Production | 20,414 MW | 25,376 MW | -19.6% | | Polysilicon Shipments | 126,358 Metric Tons | 101,095 Metric Tons | +25.0% | | Wafer Sales | 19,451 MW | 25,701 MW | -24.3% | - Due to a significant decrease in polysilicon selling prices, photovoltaic materials business revenue decreased by 57.9% year-on-year to RMB 8.768 billion, with gross margin turning from 41.9% to -6.6%[29][32] Granular Silicon Quality Improvement (Proportion of 18-Element Metal Impurity Content ≤1ppbw) | Period | 2023 Q2 | 2023 Q4 | 2024 Q2 | July 2024 | | :--- | :--- | :--- | :--- | :--- | | Proportion | 23% | 43% | 64.3% | 77.8% | Photovoltaic Power Station Business As of June 30, 2024, the company operated 151 MW of photovoltaic power stations in the United States and China, with total electricity sales in the first half decreasing year-on-year, resulting in business revenue of approximately RMB 95 million Photovoltaic Power Station Business Operational Data | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Total Installed Capacity | 151.0 MW | - | | Total Electricity Sales | 96,587 MWh | 109,735 MWh | | Business Revenue | RMB 95 Million | RMB 110 Million | Financial Review The company's overall financial performance was severely impacted by the sharp decline in photovoltaic materials market prices, leading to a 57.7% decrease in total revenue, a negative gross margin of -6.2%, and a loss attributable to owners of RMB 1.48 billion, despite a 40% reduction in administrative expenses - Total revenue was approximately RMB 8.86 billion, a 57.7% year-on-year decrease, primarily due to a significant drop in polysilicon selling prices[48] - Overall gross margin turned from 41.9% in the prior period to a negative gross margin of -6.2%, recording a gross loss of RMB 553 million[49] - Administrative expenses were approximately RMB 683 million, a 40% year-on-year decrease, mainly attributable to reduced staff costs and cost control policies[54] - Finance costs were approximately RMB 305 million, a 41.9% year-on-year increase, primarily due to an increase in average interest-bearing debt during the period[59] - Loss attributable to owners of the company was approximately RMB 1.48 billion, compared to a profit of approximately RMB 5.52 billion in the prior period[61] Liquidity, Financial Resources, and Risk Management As of June 30, 2024, the company's total assets were approximately RMB 79 billion, with net debt of RMB 10.1 billion and a net debt-to-equity ratio increasing to 24.6%, indicating weakened short-term solvency and exposure to policy, credit, interest rate, and foreign currency risks, alongside significant capital commitments Debt Structure (RMB Million) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Debt | 17,951 | 15,938 | | Less: Bank Balances and Cash Equivalents | (7,847) | (9,174) | | Net Debt | 10,104 | 6,764 | Key Financial Ratios | Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 1.36 | 1.57 | | Quick Ratio | 1.23 | 1.44 | | Net Debt-to-Equity Ratio | 24.6% | 15.9% | - The company faces key risks including changes in government policies, customer credit risk, fluctuations in bank loan interest rates, and RMB exchange rate volatility[78][79][80][81] - As of period-end, the Group's contracted but unprovided capital commitments were approximately RMB 3.017 billion, primarily for the acquisition of property, plant, and equipment[85] - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2024[93] Unaudited Condensed Interim Consolidated Financial Statements Review Report The auditor, Crowe (HK) CPA Limited, reviewed these interim financial statements in accordance with Hong Kong Review Engagements Standards, concluding that nothing came to their attention suggesting the statements were not prepared in all material respects according to International Accounting Standard 34 - The auditor's review concluded that nothing has come to their attention that causes them to believe the unaudited condensed interim consolidated financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34[100] Consolidated Statement of Profit or Loss and Other Comprehensive Income The statement details the company's operating results for H1 2024, showing revenue of RMB 8.86 billion, a gross loss of RMB 550 million, and a total loss for the period of RMB 2.02 billion, with RMB 1.48 billion attributable to owners Key Items from Consolidated Statement of Profit or Loss (RMB Thousand) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 8,862,876 | 20,945,903 | | Gross (Loss)/Profit | (552,647) | 8,777,934 | | (Loss)/Profit Before Tax | (2,213,300) | 7,420,270 | | (Loss)/Profit for the Period | (2,021,415) | 6,245,135 | | (Loss)/Profit Attributable to Owners of the Company | (1,479,603) | 5,518,278 | Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets were RMB 79.0 billion, total liabilities RMB 32.62 billion, and net assets RMB 46.38 billion, with non-current assets, primarily property, plant, and equipment, constituting a larger portion Summary of Statement of Financial Position (RMB Thousand) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 79,002,291 | 82,768,172 | | Non-current Assets | 49,732,299 | 48,076,892 | | Current Assets | 29,269,992 | 34,691,280 | | Total Liabilities | 32,621,874 | 34,450,463 | | Current Liabilities | 21,568,059 | 22,138,926 | | Non-current Liabilities | 11,053,815 | 12,311,537 | | Total Equity | 46,380,417 | 48,317,709 | | Equity Attributable to Owners of the Company | 41,140,394 | 42,587,016 | Consolidated Statement of Cash Flows In H1 2024, the company experienced net cash outflows of RMB 3.80 billion from operating activities and RMB 3.54 billion from investing activities, primarily relying on a net cash inflow of RMB 4.50 billion from financing activities to support operations and investments, resulting in a net decrease of RMB 2.84 billion in cash and cash equivalents Summary of Statement of Cash Flows (RMB Thousand) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (3,799,337) | (4,466,664) | | Net Cash Used in Investing Activities | (3,539,676) | (5,936,290) | | Net Cash From Financing Activities | 4,499,884 | 11,657,904 | | Net (Decrease)/Increase in Cash and Cash Equivalents | (2,839,129) | 1,254,950 | | Cash and Cash Equivalents at End of Period | 3,985,280 | 7,906,730 | Notes to the Financial Statements The notes to the financial statements provide detailed explanations and supplementary information for various items, including basis of preparation, significant accounting policies, segment information, revenue breakdown, expense details, fair value of financial instruments, related party transactions, commitments, and contingent liabilities - Segment information indicates that the photovoltaic materials business is the Group's primary revenue source, but recorded a loss of RMB 2.03 billion during the period; the photovoltaic power station business is smaller in scale, recording a profit of RMB 12.32 million[140] - Net write-down of inventories during the period was approximately RMB 825 million, primarily due to a significant decrease in the average selling prices of polysilicon and wafers, resulting in inventory costs exceeding their net realizable value[197] - As of period-end, total bank and other borrowings amounted to RMB 17.26 billion, of which RMB 11.36 billion were secured borrowings[203] Directors' and Shareholders' Interests Directors' and Chief Executive's Interests This section discloses the company shares and related interests held by the company's directors and chief executive, with Chairman Mr. Zhu Gongshan and his family being the primary controlling shareholders through a trust, holding approximately 23.81% of the shares - Chairman Mr. Zhu Gongshan and his family (including his son Mr. Zhu Yufeng), through a discretionary trust, collectively hold a long position of 6,405,332,156 shares, representing approximately 23.81% of the issued share capital[266][269] - Mr. Zhu Gongshan and Mr. Zhu Yufeng also hold a short position of 240,000,000 shares, representing approximately 0.89% of the issued share capital, derived from derivative agreements[266][269] Share Schemes The company operates three main share incentive schemes: the 2007 Share Option Scheme (expired but with outstanding options), the 2022 Share Option Scheme (no grants yet), and the 2017 Share Award Scheme, with 36.65 million options unexercised and 243 million awarded shares unvested as of June 30, 2024 - The 2007 Share Option Scheme expired in 2017, with no new options granted, but as of June 30, 2024, 36,646,844 share options remained unexercised[270][271] - A new share option scheme was adopted in 2022, but no share options have been granted under this scheme as of the end of the reporting period[277][278] - Under the 2017 Share Award Scheme, as of June 30, 2024, a total of 242,946,000 awarded shares remained unvested. Due to market uncertainties, the vesting dates for some awarded shares have been postponed for re-evaluation after April 2025[305][309] Major Shareholders' Interests Beyond directors, this section discloses major shareholders holding more than 5% of the company's equity, with Asia Pacific Energy Fund Limited listed as a major shareholder, holding 6,405,332,156 shares, representing approximately 23.79%, ultimately controlled by Mr. Zhu Gongshan and his family's trust - Asia Pacific Energy Fund Limited holds 6,405,332,156 shares, representing 23.79% of the issued share capital, with this interest ultimately attributable to Mr. Zhu Gongshan and his family's trust[311][312] Corporate Governance and Other Information Corporate Governance and Other Information The company complied with the Listing Rules' Corporate Governance Code during the reporting period, with the Board confirming effective risk management and internal control systems, while also repurchasing and cancelling 18,112,000 shares, and having its interim financial information reviewed by the Audit Committee and external auditor - The Board believes that the Group's risk management and internal control systems were effective during the reporting period[318] - For the six months ended June 30, 2024, the company repurchased and cancelled 18,112,000 of its own shares on the Stock Exchange, at a total consideration of approximately HKD 24 million[320] - The financial information in this interim report has been reviewed by the company's Audit Committee and external auditor, Crowe (HK) CPA Limited[321] Company Information Company Information This section provides basic company information, including Board members, committee compositions, company secretary, auditor, registered office, principal place of business, share registrar, legal advisors, and company website, among other contact and legal details