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【Introduction】 Competition in the photovoltaic industry intensifies, Almaden plans to terminate the acquisition of 100% equity of Fengyang Silicon Valley for the second time

China Fund News reporter heard

On the evening of August 18, Almaden announced that the company plans to terminate the acquisition of 100% equity of Fengyang Silicon Valley Intelligent Co., Ltd. (hereinafter referred to as Fengyang Silicon Valley).

Previously, Almaden twice planned to acquire 100% equity of Fengyang Silicon Valley, and the transaction price of the latter was reduced from 2.5 billion yuan to 1.25 billion yuan. Now, Almaden's second acquisition plan will fail again.

Upstream and downstream companies in the photovoltaic industry chain are slowing down their pace of industrial expansion. In early August, Huadong Heavy Machinery planned to terminate the Bozhou 10GW N-type high-efficiency solar cell production base project with a total investment of 6 billion yuan.

Industry insiders analyzed that the recent actions of listed companies such as Almaden and East China Heavy Machinery have confirmed the intensified competition in the photovoltaic industry from the corporate side.

Second acquisition plan still to be terminated

The transaction plan that Almaden currently intends to terminate has been planned for more than 9 months.

On November 7, 2023, the board of directors of Almaden passed a resolution stating that the company intends to purchase 100% of the equity of Fengyang Silicon Valley held by Shanghai Lingda Information Technology Consulting Co., Ltd. (hereinafter referred to as Shanghai Lingda) and other shareholders through the issuance of shares and payment of cash.

At the same time, Almaden plans to issue shares to no more than 35 specific investors to raise matching funds to pay the cash consideration for the acquisition of 100% of the equity of Fengyang Silicon Valley, invest in the construction of Fengyang Silicon Valley's ongoing projects, etc.

From the perspective of industrial development, Almaden's acquisition of 100% equity of Fengyang Silicon Valley will help it achieve its strategic goal of integrated development of photovoltaic glass production.

Public data shows that Almaden is mainly engaged in photovoltaic glass deep processing business, and previously mainly obtained upstream photovoltaic glass raw sheets through outsourcing. Fengyang Silicon Valley is mainly engaged in glass raw sheet production, research and development, and sales.

However, the above-mentioned transaction, which would help extend the industrial chain, has been terminated by Almaden's second plan.

In December 2021, Almaden first planned to acquire 100% of the equity of Fengyang Silicon Valley, but announced in December 2022 that it planned to terminate the acquisition.

In comparison, the first time Almaden planned to terminate the acquisition of 100% equity of Fengyang Silicon Valley, it was proposed by shareholders such as Shanghai Lingda; the second time Almaden planned to terminate the planning of the transaction was mainly because it comprehensively considered the current status of the photovoltaic industry, the capital market and related policy changes.

Affected by the intensified competition in the photovoltaic industry

The reasons why Biomaden proposed to terminate the acquisition twice both times mentioned changes in the photovoltaic industry.

Recently, Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, stated that in the first half of 2024, the photovoltaic industry showed the characteristics of "ice and fire". The "fire" was reflected in the continued expansion of the scale of the manufacturing and application ends, while the market conditions such as the industrial chain prices and manufacturing output value fell to the "ice" point.

Before Almaden planned to terminate the acquisition, it had mentioned the intensified competition in the photovoltaic industry in its performance forecast.

On July 13, Almaden released its performance forecast, saying, "In the first half of 2024, the photovoltaic industry will see a rapid increase in production capacity in various links of the industrial chain, resulting in a periodic and structural mismatch between supply and demand, leading to intensified market competition and a continuous decline in product prices."

Almaden is engaged in the deep processing of photovoltaic glass, which is the raw material link of downstream components in the photovoltaic industry. Almaden announced that "the profit margin of photovoltaic glass has been further squeezed".

In response to this, in accordance with the principle of prudence, Almaden made large provisions for impairment of its inventory in the first half of 2024, which had a significant impact on its operating performance.

Almaden expects its net profit attributable to shareholders of the parent company in the first half of 2024 to be between RMB 13 million and RMB 16 million, a year-on-year decrease of 59% to 66.69%; the net profit after deducting non-recurring items to be between RMB 2 million and RMB 5 million, a year-on-year decrease of 84.58% to 93.83%.

Judging from the performance of the secondary market, Almaden has fallen by more than 40% since the beginning of this year. As of the close of August 16, Almaden's share price was 15.66 yuan per share, with a total market value of 3.117 billion yuan.

Editor: Xiaomo

Audit: Wooden Fish

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