Longi Green Energy Reports First Loss in a Decade Amidst Photovoltaic Industry Adjustment Phase

The photovoltaic (PV) industry is currently undergoing a painful adjustment period, with LONGi Green Energy experiencing its first annual loss in nearly a decade. According to statistics from Southern Metropolis Daily, during this adjustment phase, the overall industry is facing significant challenges, with many companies in the supply chain reporting losses. Among the top ten PV firms ranked by revenue, approximately 70% of publicly listed companies have seen a decline in revenue, and 40% are operating at a loss. Notably, LONGi Green Energy reported a staggering loss of over 8.6 billion yuan in 2024, marking its first annual loss in ten years.

At a recent shareholders’ meeting, an executive from a PV company stated, “During this painful adjustment period, companies are primarily competing on cash flow and technology fundamentals; however, no industry can sustain a prolonged period of unprofitability. By next spring, companies that possess core technologies and stronger cost control capabilities may start to see improvement.”

The current phase of overcapacity has led to LONGi Green Energy’s unprecedented loss. The company’s financial statements reveal that its gross profit margin plummeted to 7.44% in 2024, a decrease of over 10 percentage points year-over-year. The gross margin for the silicon wafer and rod segment even turned negative at -14.31%, down by 30.19 percentage points compared to the previous year. Additionally, the gross margin for the module and battery segment has also seen a significant decline, dropping to 6.27%, down 12.11% percentage points year-on-year.

Despite these challenges, LONGi Green Energy’s performance in the first quarter of 2025 still showed a loss exceeding 1.4 billion yuan. This loss is an improvement compared to the over 2.3 billion yuan loss reported in the same quarter last year. Other PV companies, such as Trina Solar (688599.SH) and JA Solar (002459.SZ), are also facing significant losses, primarily due to the issue of overcapacity. Trina Solar noted that the industry is experiencing a phase of oversupply due to large-scale expansions in previous years, leading to imbalances across the supply chain.

In contrast to the struggles of upstream silicon material suppliers, the so-called “PV equipment suppliers” have fared relatively better. These companies, which include suppliers of silicon materials, solar cells, and modules, have been less affected during this downturn. Among the ten publicly listed “PV equipment suppliers” assessed by Southern Metropolis Daily, all reported profits. For instance, leading company JA Solar achieved over 18.8 billion yuan in revenue in 2024, marking a year-on-year increase of over 116%, with net profits reaching 2.764 billion yuan, a nearly 70% growth compared to the previous year.

In the first quarter of this year, JA Solar and other PV equipment manufacturers continued to see growth, with JA Solar’s revenue increasing by over 58% and net profits rising by over 20%. Additionally, battery equipment supplier Laplace (688726.SH) also maintained strong growth in the same period.

Laplace emphasized in a recent earnings presentation that “solar power has become economically viable compared to traditional energy sources. The growth in installation demand and ongoing technological advancements in PV cells will present more market opportunities for equipment manufacturers.” The company has established competitive advantages in new high-efficiency PV cell technologies and has fostered good relationships with major clients while actively expanding into overseas markets.

However, even “PV equipment suppliers” face challenges during this adjustment period. For instance, JA Solar reported a decline of over 60% in both production and shipment volumes in 2024. The company indicated that the increase in sales of solar cell production equipment was mainly due to prior deliveries being recognized as revenue this period, while the overall production and shipment volumes decreased due to the industry’s overall condition and a slowdown in order placements from downstream customers.

Despite the current challenges during this adjustment phase, industry experts generally anticipate that companies with core technological reserves and superior cost management capabilities will emerge more resilient and be well-positioned to seize recovery opportunities in the near future.