Solar Energy Company Hosts Performance Briefing on May 12, 2025, Discusses Future Strategies and Challenges

Solar Energy: On May 12, 2025, Solar Energy (000591) held a performance briefing, with participants discussing the company’s operations and future plans. The details are as follows:

Question: What are the company’s plans for market capitalization management? When will the buyback plan be implemented?

Answer: The company places great importance on market capitalization management by enhancing intrinsic value, optimizing information disclosure, strengthening investor relations, and maintaining stable annual dividends to achieve a dynamic balance between company value and market capitalization. We are actively responding to industry changes to promote steady improvement in our fundamentals. Rigorous assessment of photovoltaic power station investment returns and strict control over new project costs are in place to ensure project quality. We are advancing intelligent operations management to enhance automation and efficiency, ensuring quality in operational projects. We are also establishing a specialized team for power sales, maintaining good resource channels, and improving analysis and forecasting strategies to secure project energy consumption and sales prices. Additionally, we are accelerating the launch of new sales and commercial energy storage businesses, researching the feasibility of virtual power plants, and striving to identify new performance growth points.

Question: What progress has the company made in expanding overseas projects, and what are the future plans?

Answer: In light of carbon neutrality goals and global climate change agreements, photovoltaic power generation, with its low Levelized Cost of Energy (LCOE), has become a major force in the global energy transition. Emerging markets in Southeast Asia, Latin America, and the Middle East have rapidly developed. Many countries still have untapped potential in the photovoltaic sector, supported by relatively lenient land policies. These favorable factors create significant opportunities for overseas expansion. The company is leveraging China’s complete photovoltaic industry chain and cost advantages to enter overseas markets. In 2024, we established an overseas business department and engaged in discussions with relevant agencies in Sri Lanka, Indonesia, and Uzbekistan. We have signed a memorandum for a 600MW project with the Kyrgyzstan National Investment Agency, marking our first step towards international development. Over the next two years, we will accelerate investments in overseas photovoltaic projects, focusing on countries along the “Belt and Road,” particularly in regions along the “Maritime Silk Road.” We will also establish overseas financing platforms as necessary to enhance investment efficiency.

Question: Will the company have new developments in its energy storage business?

Answer: The company is actively promoting energy storage related to its core business, focusing on two main aspects: expanding the types of energy storage projects, including photovoltaic paired storage, commercial storage, and independent storage projects; and enhancing technological exploration in energy storage by researching grid-type storage technologies and the feasibility of long-duration storage technologies like flow batteries and compressed air. We will collaborate with upstream and downstream enterprises and research institutions to promote various energy storage technologies and applications, achieving resource sharing and complementary advantages.

Question: What were the main reasons for the decline in the company’s performance in 2024? Will this continue into 2025?

Answer: The company’s revenue and net profit attributable to shareholders decreased in 2024 due to several factors: First, in manufacturing, the expansion of capacity, technological advancements, and fluctuations in raw material prices led to a decline in product prices, despite rising market demand and intense competition. Second, the expansion of market-based electricity trading increased the proportion of traded volume compared to 2023, resulting in lower average prices. Third, new projects that came online in 2024 mainly contributed limited revenue as they were concentrated in the fourth quarter. Fourth, regional power restrictions and adverse weather conditions reduced electricity generation and impacted revenue. Despite these challenges, the company maintained a steady financial performance, achieving revenue of CNY 6.039 billion and a net profit of CNY 1.225 billion by the end of 2024, with total assets of CNY 48.984 billion. In 2025, while the photovoltaic industry continues to face policy adjustments and manufacturing challenges, we also see opportunities. The electricity market’s operation and price formation mechanisms will become increasingly mature, and the company will leverage its market development experience and the resources of its major shareholder, China Energy Conservation, to acquire more project resources. We aim to enhance our core power generation capacity through self-development and acquisitions, while also improving our human resource management to boost our competitiveness in electricity market transactions. We anticipate achieving revenue of CNY 5.26 billion and net profits of no less than CNY 1.318 billion in 2025, with total installed capacity exceeding 13.6GW from operational, under-construction, and planned projects.

Question: What is the company’s perspective on the Notice on Deepening Market Reform of Renewable Energy Grid Connection Prices and its impact on the industry and the company?

Answer: Earlier this year, the government released document 136, which stipulates that renewable energy power generation should generally enter the electricity market, with prices determined through market transactions. This marks a fundamental shift from policy-driven to market-driven development. This change is expected to invigorate market participants, prompting companies to focus more on cost control, technological innovation, and enhancing market competitiveness, leading to an upgrade from scale expansion to quality and efficiency-based development. Additionally, the document emphasizes the need for renewable energy to compete in the market and optimize energy storage configurations, supporting sustainable development in energy storage and other sectors. In the long run, this will encourage continuous technological advancements in the photovoltaic sector, further reducing the cost of photovoltaic electricity. However, the incomplete implementation of pricing mechanisms and trading rules at the provincial level poses challenges for calculating project returns and requires operators to maintain strong cost control and operational quality. In this market pricing environment, the company must continue to innovate to reduce the cost of photovoltaic electricity and enhance competitiveness. We will focus on regions with active electricity markets and strong renewable energy absorption capabilities, assessing local pricing levels, trading rules, and consumption risks to optimize project layouts.

Question: With significant declines in revenue and net profit from the photovoltaic sector, what measures will the company take to expand its business in 2025?

Answer: In 2024, the prices of key products like silicon, wafers, cells, and modules dropped due to capacity expansion, technological progress, and raw material price fluctuations, despite increasing market demand and fierce competition. The company has adequately accounted for obsolete capacity and is poised for a “lighter” operation. In 2025 and beyond, we expect the supply-demand dynamics in the photovoltaic manufacturing sector to improve due to market corrections, industry self-discipline, and technological advancements. Our strategy to enhance competitiveness and profitability includes: upgrading the photovoltaic manufacturing segment into a technology-driven enterprise, creating a flexible combination of “product series + application scenarios + business models + intelligent operations”; expanding overseas markets with differentiated products; continually innovating light-asset cooperative business models through technology and management outputs; strictly selecting manufacturing orders to secure favorable marketing strategies; and enhancing brand development to increase influence.

Question: How does the company plan to maintain stable profit growth?

Answer: The company’s profits primarily stem from photovoltaic power generation. We will continue to expand the scale of photovoltaic power stations and strengthen our core business. Leveraging our extensive market development experience, along with the resources and support from our major shareholder, China Energy Conservation, we will actively acquire project resources and enhance our core generation capacity through a dual approach of self-development and acquisitions. We will deepen research on intelligent operations and effectively utilize existing power station benefits while improving human resource management to enhance our ability in electricity market transactions. Furthermore, we will extend our business models in renewable energy and explore new avenues, such as initiating sales business and researching energy storage collaborations, which we believe will become new economic growth points.

Question: What is the company’s profit level for the current period?

Answer: For the fiscal year 2024, the company reported revenue of CNY 6.039 billion and a net profit attributable to shareholders of CNY 1.225 billion, operating approximately 6.076GW of power stations and having about 2.081GW under construction. The company’s operational capacity increased by 1.402GW compared to 2023. The total electricity sold for the year was approximately 6.966 billion kWh, a growth of 6.83%, with market-based transactions accounting for 3.283 billion kWh, representing 47.07% of total sales, at an average transaction price of approximately CNY 0.2172 per kWh (excluding subsidies).

Question: What are the potential growth points for the company’s profits in the future?

Answer: The company will continue to expand its photovoltaic power station scale and enhance operational efficiency. We aim to optimize investment models for photovoltaic power stations by conducting thorough research, risk assessments, and project selection, controlling construction costs, and improving operational management efficiency to achieve cost-effectiveness and maximize value creation. We will also align with policies to ensure stable future revenues from electricity sales. Leveraging our team’s rich operational experience and intelligent information systems, we will establish more effective electricity trading strategies. In addition to strengthening our core photovoltaic power generation business, we are assembling teams and gathering resources from large-scale electricity consumers to initiate sales ventures and explore collaborative developments in energy storage, while actively expanding into overseas photovoltaic markets to identify new performance growth points.

Question: What are the industry’s future development prospects?

Answer: Against the backdrop of the global transition to green energy, the global installed capacity of photovoltaic systems will continue to grow. According to the International Energy Agency (IEA), to achieve the “1.5°C target,” global photovoltaic installations must exceed 500GW-700GW annually from 2024 to 2030. The photovoltaic industry association predicts that in 2025, global installations will reach 531-583GW, with domestic installations ranging from 215-255GW. The National Development and Reform Commission and the National Energy Administration issued a joint notice on February 9, 2025, marking the end of the “fixed electricity price” era, ushering in a period of market-driven price development, which will promote the construction of a new power system and encourage healthy development within the renewable energy sector. The introduction of document 136 will also facilitate continuous technological advancements in the photovoltaic sector, further lowering electricity generation costs, enhancing the cost advantages of photovoltaic energy, and enabling photovoltaic power to compete more effectively in the market, positioning it as a crucial component in the overall energy supply.

Solar Energy (000591) focuses on the investment and operation of photovoltaic power stations and the manufacture and sale of photovoltaic cells and modules. The company’s Q1 2025 report indicated a primary revenue of CNY 1.3 billion, a year-on-year decrease of 7.8%; net profit attributable to shareholders of CNY 289 million, down 17.62%; and a non-recurring net profit of CNY 278 million, down 16.45%. The debt ratio is 52.22%, with financial expenses of CNY 141 million and a gross profit margin of 44.79%. In the past 90 days, one institution has given a rating, with one buy recommendation. The detailed profit forecast shows a net outflow of CNY 57.6524 million in financing over the last three months, with a decrease in financing balance; a net inflow of CNY 669,800 in securities lending, with an increase in the borrowing balance.