LONGi Reports Q1 2020 and Full Year 2019 Results: Revenue Increased by 49.62%

PVTIME - On April 23, 2020, LONGi, the global leading solar technology company headquartered in Chinese city of Xi'an, Shaanxi Province, China, released its 2019 annual report and Q1 2020 report to shareholders worldwide, reporting strong revenue growth led by top-notch technology leadership and significant increase in global shipments.

Higher revenue from operations reflects strong bankability

LONGi’s revenue from operations has increased by 49.62% over 2018 to reach
32.897 billion yuan ($4756.7 million)1 in 2019. Net profit
attributable to shareholders of the listed company has increased by 106.41%
year-on-year (YoY) to 5.28 billion yuan ($763.45 million)1 in 2019.
Basic earnings per share for the reporting year is 1.47 yuan (21 US-cents)1
and weighted average return on equity is 23.93%. The company’s net cash
flow for the year is 8.16 billion yuan ($1179.8 million)1,
reflecting a YoY increase of 595.48%.

In Q1 2020, revenue from operations is reported at 8.599 billion yuan
($1233.6 million)2, a 50.60% increase compared to the corresponding
quarter in 2019. Net profit attributable to shareholders of the listed company
during the reporting quarter is 1.864 billion yuan ($267.4 million)2,
205.07% higher than that in the corresponding quarter in 2019.

As of March 2020, LONGi's total assets have reached 63.151 billion yuan
($8913.21 million)3. Its asset-liability ratio stands at 52.29%,
down from 2018. Compared to Q1 2019, days of accounts receivable decreased by
23 days in Q1 2020. LONGi’s revenue from operations is expected to reach 49.6
billion yuan ($7116 million)2 in 2020.

LONGi has successfully maintained its ability to handle risk and cope with
market changes, giving priority to its financial health and operational
strength. At the same time, LONGi’s asset-liability ratio has been among the
lowest across global photovoltaic manufacturers.

In the Q1 2020 PV ModuleTech Bankability Ratings report, LONGi became the
first and, so far, the only module supplier to receive the highest AAA rating.
The most recent BloombergNEF’s Global PV Outlook also rated LONGi the highest
Altman-Z score amongst all pureplay PV manufacturers worldwide. LONGi’s
bankability is recognized by financial institutions across the world.

Significant gains in the overseas market and worldwide shipments

LONGi has been actively enhancing its overseas market share and brand influence; and has achieved significant breakthroughs in its global business expansion journey. In 2019, it sold 4.702 billion pieces of monocrystalline silicon wafers, which is an impressive 139.17% increase over the sales registered in 2018. The shipment of cells & modules reached 9.080 GW in 2019, an increase of 28.39% over the past year. The overseas shipments reached 4.991 GW, accounting for 67% of the total sales and reflecting an increase of 154.59% YoY.

LONGi started promoting bifacial technology very early in the industry and
its reliability has been verified by various applications around the world. At
the end of Q1 2020, LONGi’s bifacial module shipment has reached 5 GW, ranked
first in the world.

According to PV InfoLink, market share of LONGi’s monocrystalline products
has increased to about 62% in 2019 and is further set to increase to over 85%
by 2021. For several years in a row, LONGi has accounted for the world's
largest monocrystalline module shipments, ranking No. 1 in terms of these
shipments, while also promoting the transformation and upgradation of the global
energy structure.

Growing production capacity and increasing efficiency to meet global
demand

In 2019, the company’s production capacity for monocrystalline silicon
wafers reached 42 GW, while that monocrystalline modules reached 14 GW. In
2020, LONGi aims to reach a monocrystalline silicon wafer production capacity
of 75 GW, and monocrystalline module production capacity of 30 GW.

The newly built production line at LONGi facility is currently the highest
in the industry, and the per capita output of this facility will also be at the
forefront of the industry in future. According to estimates, its efficiency
will ultimately increase by about 35%. By end-2020, LONGi’s production capacity
of larger size modules with M6 wafers (166 mm) will exceed 20 GW.

With a higher scale of production and continuous improvement of PERC
technology, LONGi's manufacturing capacity will continue to expand gradually,
providing high-efficiency monocrystalline products to global customers and
developing a stronger guarantee for the global market.

Breakthrough innovation leads to efficiency improvement and product
evolution

As of December 31, 2019, LONGi invested 1.677 billion yuan ($242.48
million)1 in R&D, accounting for 5.1% of revenue from operations.
The sustained R&D investments have brought strong support for making
breakthrough innovations. During the year, LONGi formed a professional team of
630 R&D personnel; established R&D centers for silicon, cells and
modules; and built an R&D system with global competitiveness. LONGi has
accumulated 702 patents at the end of the reporting period.

LONGi has made positive progress in the aspects of process optimization
and improvement, energy consumption control, fine wire application, thin slice
cutting, domestic substitution of auxiliary materials and intelligent
manufacturing. The non-silicon cost of the product has further reduced – the
non-silicon cost of monocrystalline ingots has decreased by 25.46% YoY, while
the non-silicon cost of wafers has decreased by 26.5% YoY.

In terms of cells and modules, LONGi has achieved continuous technological
breakthroughs. The product conversion efficiency has been increasing
consistently to reach a world record of 22.38%; and large-scale mass production
technical solutions have been continuously helping in increasing output and
improving product performance.

LONGi has entered into a global, non-exclusive, a pattern of
cross-licensing agreement with Shin-Etsu Chemical Co., Ltd on March 25, 2020.
Any application of LONGi’s products that relates to Gallium-doped technologies
will be legitimate globally.

During the reporting period, LONGi launched the new products of M6 silicon
wafers and Hi-MO4 module, which further led to and promoted a continuous
reduction of the comprehensive cost of the industrial chain and LCOE, and
helped meet the market demand for efficient products. By end-2019, the global
intended order of Hi-MO4 module exceeded 10 GW.

Joining global initiatives and responding to global crisis, LONGi assumed
increasing responsibility for the sustainable future

On March 12th, 2020, LONGi joined a global corporate leadership
initiative, RE100 which is led by The Climate Group in partnership with CDP,
committing to 100% renewable power across its entire global operations by 2028.
By joining the RE100 initiative, LONGi has assumed greater responsibility for
global development of the low-carbon economy and achievement of climate goals.

The sudden outbreak of the COVID-19 has impacted the world, and as a
socially responsible company, LONGi also actively participated in the nation’s
public welfare activities and donated 15 million yuan ($ 2.16 million)1
through the LONGi One Percent Foundation of the Red Cross Society of China to
fight against the “invisible war”.

During the pandemic, while ensuring production, LONGi has thoroughly
protected personal health and safety of employees, and implemented strict
prevention and control measures by providing masks to employees, undertaking
strict disinfection of office areas, conducting multiple body temperature tests
every day, rotating work shifts and separating dining among other measures.
None of LONGi’s nearly 40,000 employees around the world have been diagnosed or
suspected of COVID-19.

The pandemic would inevitably have an impact on the global market, but it
is controllable, and China’s photovoltaic market has been gradually overcoming
its impact. Based on the vertically integrated global industrial chain, LONGi
has flexibly adjusted the production capacity plan, and controlled the overall
impact.

From 2009 to 2019, the global cost of photovoltaic power has dropped by
81%, which also means that photovoltaic has gradually become the most
competitive electricity product/technology in the world. According to
predictions, photovoltaics will have more than 1,000 GW of new market space in
the next 10 years, and as technology upgrades continue to accelerate, the cost
of solar power generation will drop rapidly and photovoltaics will emerge as
clean energy with the best price-performance ratio.

LONGi’s follow-up production capacity is still in accordance with the plan
to advance steadily. LONGi is willing to work with global partners to promote
continuous optimization of the energy structure and smooth realization of the
goal to achieve 100% renewable energy worldwide by 2050.

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