Investment Rating - Stock Rating: Overweight [4] - Industry View: Attractive [4] - Price Target: Rmb28.94 [4] Core Insights - LONGi expects a 10% global demand growth in 2025 under an optimistic scenario, with uncertain domestic demand in the second half of 2025 [2][7] - The company anticipates single-digit increases in Europe and the US, while robust demand is expected from emerging markets in the Middle East and India [2] - Oversupply may persist until a turning point, potentially in 4Q25 or 1Q26, as industry players navigate around profit break-even levels [2][7] - Despite mild demand and large supply, significant fluctuations in average selling prices (ASP) are not expected, indicating a more rational industry environment [2][7] - Financing channels are tightening, leading to rising financing costs across the industry [2] Summary by Sections Demand and Supply Dynamics - LONGi's cell production facility in Malaysia is capable of supplying the US market, which currently lacks solar cell supply, with anti-dumping and countervailing duty (AD/CVD) tariff rates at approximately 41% [2][7] - As of the end of 2024, LONGi acknowledged a valid cell capacity of 60GW (TOPCon and BC), with BC Gen II capacity projected to reach 50GW by the end of 2025 following capacity upgrades [2] Shipment Performance - In 1Q25, BC module shipments reached 4.3GW, driven by a rush in installations, particularly in the distributed solar sector, comprising 1.2GW of BC Gen II and 3.1GW of BC Gen I [3]

Summary of LONGi Green Energy Technology Co. Conference Call Company Overview - **Company**: LONGi Green Energy Technology Co. Ltd - **Industry**: China Utilities - **Market Cap**: Rmb112.61 billion - **Stock Rating**: Overweight - **Price Target**: Rmb28.94, representing a 95% upside from the current price of Rmb14.86 as of April 29, 2025 Key Financial Highlights - **2024 Financial Performance**: - **Net Loss**: Rmb8.6 billion, compared to a net profit of Rmb10.8 billion in 2023 [3] - **Gross Profit Margin (GPM)**: Narrowed by 11.1 percentage points to 7.4% [3] - **Inventory Impairments**: Rmb6.1 billion, up from Rmb5.2 billion in 2023 [3] - **Revenue Breakdown**: - Domestic revenue: ~56% (down from ~63% in 2023) - Europe: ~14% - Asia: ~14% - Americas: ~11% - Middle East: ~6% [3] - **1Q25 Financial Performance**: - **Net Loss**: Rmb1.4 billion, improved from Rmb2.4 billion in 1Q24 and Rmb2.1 billion in 4Q24 [4] - **Revenue**: Rmb13.7 billion, a 23% year-over-year decline [4] - **GPM**: -4.2%, down 13.1 percentage points year-over-year [4] Shipment Data - **2024 Shipments**: - Wafer shipments: 108.46 GW (46.55 GW for external), down 14% year-over-year - Cell and module shipments: 82.32 GW, up 22% year-over-year [5] - **1Q25 Shipments**: - Wafer shipments: 23.46 GW (11.26 GW for external) - Cell and module shipments: 16.93 GW, with BC module sales accounting for 26% (4.32 GW) [5][9] Regional Performance - **Middle East**: Highest GPM at 18.4% in 2024, with only a 1.7 percentage point decline year-over-year, compared to 11-13 percentage points deterioration in other regions [9] Revenue by Segment (1Q25) - **Module and Cell**: Revenue of Rmb66.3 billion, down 33% year-over-year; GPM at 6.3%, down 12.1 percentage points year-over-year - **Wafer**: Revenue of Rmb8.2 billion, down 67% year-over-year; GPM at -14.3%, down 30.2 percentage points year-over-year - **Power Station**: Revenue of Rmb6.3 billion, up 67% year-over-year; GPM at 35.11%, up 15.7 percentage points year-over-year [9] Risks and Opportunities - **Upside Risks**: - Higher-than-expected global solar demand - Increased market share for new products - Alleviated trade tensions for China's solar products [13] - **Downside Risks**: - Lower-than-expected global solar demand due to infrastructure challenges - Tighter trade protection policies on China's solar products - Intensified competition leading to significant margin contraction [13] Conclusion LONGi Green Energy Technology Co. is navigating a challenging financial landscape with significant losses and declining margins. However, the company shows potential for recovery through increased shipments and market share in the solar industry, particularly in the Middle East. The outlook remains cautiously optimistic, with a focus on mitigating risks associated with global demand and trade policies.