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On January 4, 2021, Longji shares (601012.SH) announced that Li Chunan (The concerted action of the actual controller) During the period from December 7th to 31st, 2020, they reduced their holdings of 37.717 million shares through centralized bidding, and cashed out 3.43 billion yuan. In the meantime, Li Chunan also sold 9.81 million shares through block trades, cashing out about 830 million (the transaction price is calculated at 85 yuan).

According to an agreement signed on December 19, 2020, Li Chun’an will transfer 226 million shares (accounting for 6% of Longji’s total share capital) to Hillhouse Capital, it is reported that the consideration is 15.84 billion.

Calculated, Li Chunan cashed out more than 20 billion intensively. After the transaction is completed, its shareholding ratio in Longji shares will drop from 10.55 to 2.17%. It is widely believed that Li Chunan’s reduction of holdings is related to the transfer of Liancheng CNC, which is the chairman of the board. In addition, the market’s confidence in Longi has increased instead of falling. After the reduction was completed, the stock price hit a new high and the market value once climbed to 440 billion.

In 2020, Longji shares rose by 277%, and important shareholders cashed out 20 billion at a high level. What is the trend of business and shares?

“Six sections of sugarcane” eat five sections

Liu Qiangdong attributed vertical integration to the “sugarcane theory”-all links in the industrial chain have profits, just like sugarcane. In order to obtain more profits and “right to speak”, you must gnaw as many verses as possible.

There are roughly six sections of “sugar cane” in the photovoltaic industry (taking monocrystalline silicon and non-casting solutions as examples), and the upstream includes Polycrystalline silicon material production, single crystal furnace pulling crystal, Cutting, polishing and slicing and other three sections, the midstream includes monocrystalline silicon cell, photovoltaic module two sections, the downstream is photovoltaic power generation system >.

The global photovoltaic industry is in a pyramid shape-the upstream concentration is high, and the middle and downstream players are relatively large. In the polysilicon segment, Tongwei, Xinjiang Daquan, GCL-Poly, and Xinte Energy accounted for 60% of the total global sales; in the monocrystalline silicon ingot segment, the capacities of Longji and Zhonghuan were 42GW and 33GW respectively, which is equivalent to the global new photovoltaic installations. 63% of the capacity (2019 data); the silicon wafer link is still the duopoly of Longji and Zhonghuan (In 2019, the silicon wafer output of the two companies was 6.47 billion and 5.05 billion respectively).

According to Tiger Sniffing Miaotou App, the global market shares of Chinese companies’ polysilicon, silicon wafers, cells, and photovoltaic modules in 2019 were 67.3%, 97.4%, 78.7% and 71.3%, respectively.

Longi Green Energy starts with monocrystalline silicon ingots and silicon wafers. Silicon ingots are mainly used for self-use, and silicon wafers are sold. In 2013, it began to eat photovoltaic cells and photovoltaic modules, which are mainly for self-use and module sales; Endless monocrystalline silicon rods and solar cells are sold externally, but they account for a relatively small proportion. In addition, Longi is also involved in photovoltaic power generation systems.

Longi’s revenue in 2019 reached 32.9 billion, a year-on-year increase of 49.6%.

Although eating five of the six sugarcane, LONGi’s income mainly comes from upstream silicon wafers and midstream components. In 2019, silicon wafer and component revenues were 12.9 billion and 14.6 billion respectively, accounting for 39.3% and 44.3% of revenue respectively, and accounting for 83.6% of revenue in total. In 2017, this proportion was as high as 91.2%.