Longji said its profits had been adversely affected
Since the second half of last year, many places in China have introduced policies to double control energy consumption, targeting industries with high energy consumption.Among them, Yunnan province has issued a Notice on The Related work of Double Control of Energy Consumption to strengthen the control of key industries. Among them, the order of power and production restriction involves industrial silicon and yellow phosphorus enterprises.On the evening of April 5th, Longji Co., LTD. (601012) announced that the company had received a letter from Yunnan Development and Reform Commission on clarifying the electricity price of Longji Green Energy Technology Co., LTD.In accordance with the requirements of clearing preferential electricity price policies of relevant state departments, the preferential electricity price policies and measures enjoyed by the company in Yunnan Province will be cancelled. From September 1, 2021, all electricity prices of the company will be settled directly with power grid enterprises through electricity market transaction.Yunnan, Sichuan and other places are rich in hydropower resources, and photovoltaic upstream industrial silicon, polysilicon, silicon chip and other manufacturing links consume a lot of electricity. Therefore, in the past, many photovoltaic upstream enterprises will invest in here.From the industrial map of Longji shares, Yunnan province is also its investment.As early as in March 2016, longji stake signed a strategic cooperation framework agreement with the government of yunnan province, is the company in yunnan investment construction of monocrystalline silicon rods silicon photovoltaic power station, efficient battery components, characteristic agriculture industry chain, drive level billions of single crystal photovoltaic industry cluster and give relevant preferential policies of yunnan province support cooperation strategic cooperation intention.Since 2016, Longji Has successively signed project investment agreements with yunnan Provincial Development and Reform Commission, Yunnan Energy Bureau, Yunnan Baoshan Municipal Government, Lijiang Municipal Government, Chuxiong Yi Autonomous Prefecture Government, Tengchong Municipal Government, Qujing Municipal Government and many other places in Yunnan province to promote the effective implementation of the above strategic agreements.Data show that by the end of 2021, Longji Has formed about 67GW of crystal drawing capacity and 57GW of chip capacity in Yunnan Province. Lijiang Phase III 10GW monocrystalline silicon rod construction project, Qujing Phase II 20GW monocrystalline silicon rod and 30GW monocrystalline silicon wafer project and Qujing 30GW monocrystalline battery project have not been started or put into operation.In addition, by the end of 2021, Longji’s slicing capacity in Yunnan accounted for about 54% of the company’s total capacity.Reporters refer to longji Stock 2021 report, which mentioned that the company’s monocrystalline silicon rod, silicon wafer production base is mainly concentrated in Shaanxi (Xi ‘an), Ningxia (Yinchuan, Zhongning), Yunnan (Lijiang, Baoshan, Qujing, Chuxiong) and Malaysia (Kuching).Longji said that since the company’s investment projects in Yunnan province can no longer implement the electricity price agreed by both parties in the original cooperation agreement, the production cost of the invested enterprises in Yunnan Province will be increased to a certain extent. The electricity cost accounts for about 15% of the whole process processing cost of silicon wafers, which will have a certain adverse impact on the company’s profits.Reporters did not find from the public information about the adjustment before and after the longji share price level of specific data, so it is difficult to clarify the adjustment of the company’s impact on the specific how much.However, it is clear that in 2021, in yunnan Province, Baoshan Longji, Chuxiong Longji and other silicon rod, silicon wafer subsidiaries are an important source of profits of Longji shares.It is worth mentioning that in view of the fact that the company no longer enjoys the preferential electricity price policy of Yunnan Province, Longji Shares specifically mentioned that the unfinished part of the investment project in Yunnan of the above company exists the risk of change.Reporters noted that last month, Longji shares disclosed an investment plan in Inner Mongolia, involving annual output of 20GW monocrystallide silicon rods and slices and other projects, a total investment of about 19.5 billion yuan, while looking at the investment map of Longji shares, rarely before investment in Inner Mongolia.