Lingda Solar Plant Temporarily Shut Down Due to Safety Concerns

PVTIME – Lingda Group Co., Ltd. (Lingda, 300125.SZ), a leading engineering technology company specialising in new energy development, environmental improvement and energy conservation has recently announced the temporary shutdown of Phase II of a solar power plant initiated by one of its wholly owned subsidiaries. The plant was shut down on 13 June 2024 due to a safety issue and there is currently no confirmed restoration time.

The plant was previously warned to be rectified by the local government in a spot check of production safety on 16 May 2024. Following the discovery of multiple safety issues, the site was shut down. Operations will resume once the necessary rectifications have been completed.

The temporary shutdown of the solar plant will have an impact on Lingda’s operating income in 2024, as it represents a significant source of revenue. This wholly owned subsidiary, with total assets of 468 million yuan and net assets of 117 million yuan, achieved operating income of 6.94 million yuan and net profit of -1.49 million yuan in the first quarter of 2024. This compares to an operating income of 33.256 million yuan in the first quarter of 2023.

Furthermore, on 5 June 2024, Lingda announced that it will cease construction of the initial phase of a solar cell production facility in Anhui Province, China. The project was initiated on 15 June 2023, with Lingda investing 9.15 billion yuan, representing 80% of the joint venture, to establish a solar cell production base with a production capacity of 20GW. The first phase of the project is on track to achieve a production capacity of 10GW of TOPCon solar cells, which will be operational in June 2024. The second phase will aim to achieve 5GW of TOPCon cells and 5GW of HJT cells. However, the first phase of the project has not met the company’s expectations due to a number of factors affecting construction progress. Lingda has stated that the required investment of 4.1 billion yuan for the first phase exceeds the company’s current funds, and the timing of the financing is uncertain due to the company’s current operational challenges, particularly the recent decline in the price of high-efficiency photovoltaic solar cells.

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