Shares of solar-panel maker Longi tumble as price war, glut stoke losses

Prices of most popular solar modules have fallen to a level that renders most producers unprofitable, Citigroup says

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Egrets fly over solar panels at a farm in Jinhu County in eastern Jiangsu province on December 16, 2024. Photo: AFP

Published: 12:46pm, 17 Jan 2025Updated: 4:35pm, 17 Jan 2025

Shares of Longi Green Energy Technology fell by the most in a week after the Chinese solar-panel components producer warned of bigger than expected losses amid a prolonged domestic price war and chronic oversupply in the industry.

The world’s largest maker of solar silicon wafers expects to report a loss of 8.2 billion yuan (US$1.1 billion) to 8.9 billion yuan for 2024, according to a Shanghai Stock Exchange filing on Friday. The firm was expected to lose 7.1 billion yuan, according to forecasts compiled by Bloomberg, versus a 10.7 billion yuan profit in 2023.

The stock declined 1.6 per cent to 15.16 yuan on Friday, the worst drop since January 10. Longi shares slumped 30 per cent over the past 12 months, while the Shanghai Composite Index advanced 12 per cent.

“Affected by stiffening industry competition, the company’s output of second-generation products remained low,” the firm said in the filing. “Prices and gross margins of mature products continued to fall, resulting in operating losses and provisions for asset impairment.”

An employee works in an unnamed solar-panel factory in eastern Jiangsu province in December 2024. Photo: Getty Images

Beijing imposed curbs on new production facilities by raising the minimum capital requirements and limiting their energy and water consumption, among other measures to stem the glut. More than 30 of the biggest players have agreed to cut production and end a price war, with little success. China has about 1,200 gigawatts (GW) of solar photovoltaic manufacturing capacity, or twice the market demand, UBS said.