Longi has grown from humble beginnings to become the undisputed global leader in the solar industry, and there’s still a long way to go
601012 Longi Green Energy Technology
Market Cap: CNY406 billion (US$60 billion)
Note: Longi shares split 1.4:1 today, so information in financial databases may not be accurate.
Longi Green Energy Technology is the world’s largest solar module producer, shipping 50% more GW than its nearest competitors in 2021 to hold approximately 20% market share. This is a fairly recent development, as Longi only first entered the module market in 2014 through the acquisition of a relatively minor player and gradually rose through the ranks to take the top spot in 2020. Over the last five years, the Company has grown revenue and earnings at a 40%+ CAGR, driving 55% annualized returns for shareholders.
In 2021, Longi recorded twice as much revenue as its nearest competitors at significantly higher operating margins (14% vs. 5-8%) and ROIC (20% vs. 5-10%). Longi generated roughly as much operating income in 2021 as the rest of the top ten module manufacturers combined. In a hyper-competitive industry with a history of financial instability, Longi has emerged as the only AAA-rated module supplier according to PV-Tech. Longi achieved this by first dominating the monocrystalline silicon wafer market, where it has captured a 45% share, and then moving downstream into cells (cut wafers) and modules (assembled cells). As a result, Longi’s module competitors are often reliant on Longi for their key inputs, which constrains their growth and margins while Longi is in a better position to scale their downstream operations, especially during periods of turbulence across the supply chain. After increasing module shipments by 55% to 38GW in 2021, the Company has planned for another year of strong growth to deliver up to 60GW of modules in 2022:
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