Zhongmin cast: finance does not equal capacity

Polaris solar PV net news: with a combination of model investment in photovoltaic project in Ningxia, zhongmin on PV industry investment and without doubt this is a very good drive, but said success was clearly premature. Because choosing to build power station in Ningxia, zhongmin vote still pointing to a policy dividend.

On August 28, the highly anticipated private investment company “China Minsheng Investment Corporation” (hereinafter “voted”) announced the first of billions of investment plans, in which considerable–of the new energy investment construction in Ningxia 3GW~5GW photovoltaic power generation project, with a total investment of 30 billion ~500 billion.

It is well known that today’s photovoltaic industry is policy favors, but there are still many uncertainties. Only in early 2014 14GW machine targets, for example, according to Zou Xuyuan, Galaxy securities analyst reports, first half of grid-connected PV system annual installed capacity of only 3.3GW, which includes 2.3GW utility and 1GW distributed. This suggests that real market pattern has yet to appear in the industry. As an investment company, zhongmin invest a great deal of input, can bring the expected benefits?

Combination of first test the water

In fact, investment in Ningxia power plant, have not voted in first-contact photovoltaic industry. As early as in May 2014, that is, people voted only after registration in 10th, GCL Group announced that will work with zhongmin voted to establish the scale of 10 billion dollar fund for the development of PV and PV industry consolidation.

Combination, zhongmin cast want to set foot in the franchise area. Under the law on commercial banks, People’s Republic of China domestic commercial banks are not allowed to invest in non-personal use property or to non-bank financial institutions and companies to invest. In our country, in industry and finance are to some extent separated and zhongmin as a private investment group, are not affected by this Ordinance, which were submitted to the State Council Finance platform solution, not only for corporate financing, but also conducive to reasonable control risk by financial institutions.

In addition, zhongmin voted to raise financing mode, with each holding an average of 59 participating enterprises less than 2%, that is 1 billion yuan, a minimum of not less than 0.6%, which is 300 million dollars. Participation of industry bigwigs, collection of all talents, help to look for suitable investment opportunities in industry-wide. Zhongmin voted Chairman Dong wenbiao has publicly stated that the zhongmin investment and business models, to United States Morgan close, covering industry and finance. More precise descriptions, just as its founder Dong wenbiao said “a combination of the financial holding group. ”

People voted in the early days, to defuse domestic over-capacity as it represents an important direction, and lead in the selected industries such as steel, PV, ships, respectively, under the Corporation plans to set up new energy, Republic steel, navigation and mining in logistics and other nine subsidiaries, which, in the new energy business was first started.

Dong wenbiao has publicly said, “people vote in two steps, the first step in major industrial investment, the second step is based on industrial investment, to invest in financial assets. “The photovoltaic project in Ningxia, is Dong wenbiao has promised” excess industrial investment, “the first step.

Fame and fortune in Ningxia project

But in fact, zhongmin cast “focus on PV overcapacity” claim is not accurate.

As we all know, China PV industry oversupply in the manufacturing sector, instead of the Terminal power plate. In 2013, introduced many policies in energy consumption in China in order to encourage the reduction of coal-fired power, which brings great space for new energy generation. In addition, the PV industry support policies enacted by the Government only just over 10, and focused on the benefit of downstream PV field, that is, people voted in the investment sector. Zhongmin cast the injection, both for the domestic renewable energy industry to bring new blood, made enough goodwill from the Government, and can get subsidies, can be said to serve multiple purposes.

Investment in Ningxia, on avoiding distributed PV crowd, eluded a photovoltaic power station in the eastern part of Gansu and Inner Mongolia, with traditional investment, you can see that the people voted for the benefit of careful consideration.

Regarded as power in Western Province of Ningxia, not only has an average of more than 2000 hours of sunshine, 168 days of frost-free period advantages, its power transmission also has a unique advantage. At present, Ningxia has built power transmission projects mainly include Ning ± 660,000 kV HVDC demonstration project in Shandong province in the East, new key projects this year, a spirit of Shao ± 800,000 volts DC works, this means that power delivery capacity or to a new peak in the near future.

In addition, Ningxia new energy power grid active 2013 PV installed capacity growth rate as high as 627%. As of August 20, Ningxia power grid, grid-connected photovoltaic power stations up to 64, installed capacity reached 1.63 million-kilowatt, accounting for 7.2% of the total installed capacity of the whole network, new energy generation has become the second largest in Ningxia power supply. In order to meet the demand for new energy development, State grid electric power construction in Ningxia 5, 330,000 volts, 1 new 220,000-volt energy central access power transmission and transformation project to ensure that all went according to plan approved new energy grid.

According to Ningxia concentrated photovoltaic purchase price will be 0.9 Yuan/kWh, distributed PV subsidies for 0.42 Yuan/kWh calculations, zhongmin of Ningxia 3GW~5GW centralized PV investment will bring 6 billion ~105 billion to its annual cash flow, zhongmin investment Ningxia project is expected to cost-recovery in the 6-8.

Long-term returns still questioned

In the day announces investment in Ningxia, Dong wenbiao said in a media interview “with photovoltaic technology to improve later, photovoltaic power generation costs will be significantly reduced, while coal-fired power in addressing issues such as carbon emissions, desulfurize, costs will rise. “Language, it is easy to see their confidence in the future recovery of the photovoltaic industry.

If from a digital point of view, recovery does show promise. According to official statistics, in first half of 2014, our PV exports totalled US $ 8.23 billion, an increase of 15.9%, compared with last year’s total, PV product exports is only about $ 10 billion. In terms of business in the second quarter, Canadian solar solar power, renesola, JA Solar and other mainstream manufacturers have achieved a gross profit increase, some margin above 10%, investment also grew more active, zhongmin voted against this background building or buying power, timing is more mature.

Review the course of nearly three years of the domestic photovoltaic industry development, “recovery” argument seems rather far-fetched, this is also a lot of operators suspected zhongmin important aspects of investing and investment.

As we all know, photovoltaic power stations in China has yet to achieve independent profitability, maintain normal operations of enterprises mainly relying on Government subsidies. Our distributed PV subsidies amount to 0.42 Yuan/kWh, this is better than 0.419 Yuan/kWh of coal acquisition prices still high, such a large subsidy, photovoltaic industry if it is not present “recovery” signs, it is somehow justified. With the continuous improvement of technology, photovoltaic power generation costs are declining, but costs about 0.2 Yuan/kWh of coal power generation, photovoltaic power generation wanted to “force” talk, there is still a long way to go.

Similarly, zhongmin PV investment projects can achieve long-term sustainable profitability, after all, still rely on at any time could sway Government policies.

From March 2013, the global PV production capacity Suntech announced bankruptcy reorganization for the top ten China PV industry into a full-blown crisis. Since then, the Government enacted a series of hefty PV subsidy policy in China, but these policies are more like “emergency” or difficult to guarantee its sustainability.

By the end of 2013, China’s total installed capacity of photovoltaic industry in the 18GW, in accordance with the centralized and distributed PV PV half count, needs all year round in State funding has reached more than 19 billion yuan. During the same period, Europe, Japan and other countries already have cut subsidies for PV. The future, subsidies for PV development is sustainable, or will affect investment returns.

Combination model of investment in Ningxia, zhongmin vote for apparently, this is a good attempt of the photovoltaic industry, but said success was clearly premature. Because of its choice in Ningxia to build power stations, still pointing to a policy dividend. Therefore, looking at how in a short time to achieve cost reductions, autonomous profit, will be cast in the next step the biggest challenge. And whether the company or the industry, only from inside breaking predicament, to suit your business model, is the capacity release, new beginning.

Original title: people voted: finance does not equal capacity

Posted in News.