The "Secret" Behind The 7 Billion Yuan Convertible Bond Fund Raising: Longji Shares' Low Cost Entry Into The Next Generation Photovoltaic Battery Competition

On May 18, Longji shares sold the largest convertible bond financing in recent years.

According to the announcement, the company plans to issue A-share convertible corporate bonds of no more than 7 billion yuan (including 7 billion yuan). After deducting the issuance costs, the net amount of fund-raising will be used for Xixian Leye annual output of 15gw single crystal high-efficiency battery project, Ningxia Leye annual output of 5GW single-crystal high-efficiency battery project (phase I, 3gw) and supplement working capital. According to the fund utilization plan, of the 7 billion yuan raised, 5.85 billion yuan will be invested in the above two projects.

"The company has the resources and ability to expand the production capacity of high-efficiency single crystal products, which has laid a solid foundation for the implementation of this project." When talking about the fund-raising plan, Longji said that it has made long-term research and development preparation around the n-type high-efficiency single-crystal battery technology, and has reserved a large number of mature research and development achievements. 24 patents have been applied for the main core technology, 14 of which have been authorized. Moreover, the pilot scale production efficiency has exceeded 24%, It has the ability of mass production.

21st century economic reporter noted that this is the third time since 2017 that Longji shares has raised funds through convertible bonds. In 2017 and 2020, the company raised 2.8 billion yuan and 5 billion yuan respectively for the expansion of its photovoltaic product capacity.

Why choose convertible bonds again?

In the case of continuous growth in performance, the share price of Longji shares in the secondary market rose rapidly, with a market value of more than 460 billion yuan at one time, becoming a veritable "photovoltaic grass".

Good stock price performance has also opened a financing channel for Longji shares in the A-share market. According to the statistics of 21st century economic report, since its listing, Longji has raised 16.615 billion yuan in equity refinancing. Among them, fixed increase of RMB 4.940 billion, rights issue of RMB 3.875 billion, convertible bonds of RMB 7.8 billion and short-term financing bonds of RMB 1.5 billion. In the equity refinancing over the years, fixed increase and convertible bonds have brought the main source of funds for Longji shares.

In fact, Longji shares once again choose convertible bond financing method is not unexpected, the previous two convertible bonds have been sought after by the capital market.

On June 15, 2020, the China Securities Regulatory Commission issued a securities regulatory license, and Longji shares 5 billion yuan convertible bonds were approved (hereinafter referred to as "long 20 convertible bonds") for a period of six years. This fund raising is used for the project of annual output of 5GW single crystal battery in Jingwei new town of Xi'an and 15gw of single crystal silicon rod and wafer project of Yinchuan. Up to now, the annual output of 5GW single crystal battery project in Jingwei new town of Xi'an has reached the expected serviceable state in December 2020, while the annual output of 15gw single crystal silicon rod and wafer project in Yinchuan is still in the construction period.

21st century economic reporter noted that the long 20 convertible bond is a progressive interest rate, paying interest once a year: from July 31, 2020 to July 30, 2021, the coupon rate is 0.3%; From July 31, 2021 to July 30, 2022, the coupon rate is 0.4%; From July 31, 2022 to July 30, 2023, the coupon rate is 0.8%. Progressive to 2026, the coupon rate will rise to 2.0%.

"Compared with the interest rate of ordinary bonds, the interest rate of convertible bonds is relatively low." An institutional source told the 21st century economic report that low interest cost is the main feature of this financing method. In addition, compared with fixed increase financing, convertible bond financing can also reduce the dilution of equity and expand the company's equity.

However, the person further pointed out that the conditions for mandatory redemption of convertible bonds are as follows: the closing price of the company's A-share shares in at least 15 consecutive trading days is not lower than 130% (including 130%) of the current conversion price; The outstanding balance of convertible corporate bonds issued this time is less than RMB 30 million. When the company can not carry out mandatory debt to equity swap, it means that the company's share price is relatively bad.

However, since its listing on September 8 last year, the face price of long 20 convertible bonds has been rising, reaching 239.77 yuan per piece. At the same time, Longji shares also performed well in the secondary market, hitting 125.68 yuan / share on February 18 this year.

This means that in less than one year, long 20 convertible bonds triggered the mandatory redemption clause that "the closing price of the company's A-share shares in at least 15 trading days is not lower than 130% (including 130%) of the current conversion price" in 30 consecutive trading days. Finally, on March 31, this year, Longji shares spent 24 million yuan to redeem only 0.47% of the convertible bonds at the price of 100.20 yuan per piece, and almost all other bonds were converted into shares.

Based on previous performance and company fundamentals, the new issue of convertible bonds is likely to be hot again“ This is also an important reason why Longji dares to expand the scale of financing. "

Can "photovoltaic grass" lead the next generation of battery technology?

In the feasibility analysis of the implementation of the project, Longji said that it had the capacity of large-scale mass production for n-type technology.

As for the specific n-type technology route, Longji shares related people told the reporter of the 21st century economic report that it is not convenient to disclose at present.

The specific path of n-type technology can be divided into IBC, PERT, TOPCON, hjt, etc. From the current market forecast, hjt and TOPCON are the most popular.

At the end of April this year, Longji announced that the conversion efficiency of single crystal double-sided n-type TOPCON battery of its Longji battery research and development center reached 25.09%, which set a new world record. The reporter of 21st century economic report noted that on May 11 this year, Longji Co., Ltd. applied for and announced two important patents: "a perovskite battery" and a "laminated photovoltaic device". This leads to Lenovo's R & D reserves of perovskite laminated battery technology.

The so-called perovskite stack battery technology refers to perovskite superimposed hjt, perc, IBC, TOPCON, etc. Among them, perovskite superimposed TOPCON has already participated in the research of photovoltaic companies in China, such as Zhonglai shares; Perovskite superimposed hjt has led to a research upsurge in major enterprises because the laboratory efficiency has exceeded 29%.

Although it is not known whether the two projects of Xixian Leye and Ningxia Leye all adopt n-type TOPCON technology, it is certain that Longji shares intends to "catch up later" after deeply arranging vertical integration, especially in its relatively weak battery link.

By the end of 2020, Longji's single crystal battery capacity is 30GW. Combined with the project progress calculation, by the end of this year, the company's single crystal battery capacity will reach 38gw“ From the perspective of industry history, the competition in the battery sector is highly dependent on the technological progress of equipment, and its long-term advantages are obvious. " According to the analysis of Guojin securities, in the process of the current battery technology route switching from p-type to n-type, taking the lead in providing stable and large-scale production capacity means that more sufficient terminal empirical operation data can be obtained faster, which is conducive to the promotion and application of the company led new product route in the terminal market.

The 21st century economic reporter has observed that the division on the technical route of the next generation battery in the industry has evolved into TOPCON and hjt. On the technical path of TOPCON, Tianhe solar, Zhonglai, Longji and Jingke energy have been deployed; In terms of hjt technology path, Tongwei Co., Ltd., Shandong Coal International Co., Ltd., and Dongfang Risheng have made progress in R & D.

Among them, the investment and construction of hjt production capacity has appeared frequently in recent years. The latest work is that Mingyang intelligent, a wind power enterprise, announced an investment on May 12: the company plans to invest 3 billion yuan in the construction of 5GW photovoltaic high efficiency battery and 5GW photovoltaic high efficiency module project. In this investment, Mingyang smart made it clear that it was investing in heterojunction (hjt) batteries.

Recently, China Securities Construction Investment Corporation (CSCI) released the view that in the near future, domestic hjt technology has made new progress, and equipment enterprises reserve upgraded technology, and hjt is expected to increase efficiency and reduce cost throughout the year.

The 21st century economic reporter noted that as one of the domestic enterprises that lay out hjt equipment, Jiejia Weichuang recently said on the investor interaction platform: "at present, it has the whole line manufacturing capacity of hjt battery production equipment, and all kinds of equipment are sold."