Longi(SH:601012)2025-11-01 13:47Summary of Longi Green Energy Technology Co. (601012.SS) 3Q25 Earnings Call Company Overview - Company: Longi Green Energy Technology Co. - Industry: Solar Energy Key Financial Results - EBITDA: Reported at Rmb439 million, down 5% quarter-over-quarter (qoq) and 68% year-over-year (yoy), but above Goldman Sachs estimates (GSe) of Rmb271 million due to lower poly cost and a Rmb700 million inventory provision reversal [1][4] - Revenue: Declined by 6% qoq to Rmb18.1 billion, with Wafer and Module segment revenue also down by 6% qoq to Rmb17.3 billion [2][8] - Sales Volume: Wafer sales volume remained flat at 13.43GW (+0% qoq), while Module sales volume increased by 5% qoq to 23.86GW [2] - Gross Profit Margin (GPM): Improved by 3 percentage points (pp) qoq to 5%, with Wafer GPM increasing by 9pp to 5% and Module GPM rising by 2pp to 3% [3][8] - EBITDA Margin: Largely flat at 2% in 3Q25, impacted by higher selling, general and administrative expenses (SG&A) [3] Shipment and Product Mix - HPBC Module Shipment Mix: Increased significantly to 23% in 3Q25 from 10% in 1H25, with expectations to exceed 40% in 4Q25 based on management's guidance [2] Earnings Revision and Valuation - Earnings Revision: 2025E EBITDA revised down by 16% to reflect a 9% lower revenue from non-Wafer/Module business and higher selling costs [4] - Target Price: Adjusted to Rmb19.1 from Rmb19.0, based on an 11X 2027E EV/EBITDA discounted back to 2026E at 11.3% [4][11] Investment Thesis - Thesis: Longi is positioned as a leading integrated module player in the solar PV market, with potential EBITDA inflection expected in 2H25 and a favorable revenue mix from Back Contact (BC) Modules, which have higher gross profit margins [10] Risks - Key Risks: 1. Potential rebound in Poly/Glass prices due to demand exceeding expectations [11] 2. Weaker-than-expected demand in overseas markets or Eastern China [11] 3. Slower development of BC technology impacting margin potential [11] Additional Insights - Management Guidance: Management indicated a full-year BC shipment guidance of over 20GW for 2025E, suggesting a strategic focus on higher-margin products [2] - Cost Management: The improvement in GPM is attributed to lower recognized poly costs and inventory provision reversals, indicating effective cost management strategies [3] This summary encapsulates the critical financial metrics, strategic insights, and potential risks associated with Longi Green Energy Technology Co. as discussed in the 3Q25 earnings call.