Xinyi Solar Announces 2023 Annual Results
Consolidated Revenue Hits Another Record High
Up 29.6% to HK$26,628.8 Million

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Solar Glass Business Revenue Surges 33.3% Driven by Sale Volume Up 49.3%
Installation Cost Down Booms the Annual Newly-added Installations First Exceed 1GW

Highlights

(HK$ Million, unless otherwise stated)	For the Year Ended 31 December		Year-on-Year Change
	FY2023	FY2022
Revenue	26,628.8	20,544.0	+29.6%
Gross Profit	7,089.7	6,158.5	+15.1%
Gross Profit Margin (%)	26.6%	30.0%	-3.4ppts
Net Profit Attributable to Equity Holders	4,187.1	3,820.1	+9.6%
Net Profit Margin (%)	15.7%	18.6%	-2.9ppts
Full-year Dividend per share(HK cents)	22.5	20.0	+12.5%
Full-year Dividend Payout Ratio (%)	47.8	46.6%	+1.2ppts
Basic Earnings per Share(HK cents)	47.04	42.95	+9.5%

(Hong Kong, 28 February 2024) — Xinyi Solar Holdings Limited (the "Company", together with its subsidiaries, "Xinyi Solar" or the "Group"; Stock Code: 00968), the world's largest solar glass manufacturer, today announced its annual results for the year ended 31 December 2023. During the year, the Group successfully capitalised on the surge in PV installation demand by expanding its solar glass production capacity and driving up sales volume, leading to a substantial increase in revenue. Dual growth in both gross profit and net profit was also achieved, as the Group experienced a significant improvement in the gross profit margin of the solar glass segment in the second half amid better supply and demand dynamics.

In 2023, the Group's consolidated revenue increased 29.6% year-on-year ("YoY") to HK$26,628.8 million. Gross profit rose 15.1% to HK$7,089.7 million, with a gross profit margin of 26.6% (2022: 30.0%). Meanwhile, profit attributable to equity holders of the Company increased by 9.6% to HK$4,187.1 million.

As of 31 December 2023, the Group maintained a healthy financial position, with cash and bank balances at HK$3,877.0 million (31 December 2022: HK$5,370.4 million). The Board of Directors proposed the payment of a final dividend of 15.0 HK cents per share (2022: 10.0 HK cents). Together with the interim dividend of 7.5 HK cents, the full-year dividend is 22.5 HK cents, with a dividend payout ratio for the year of 47.8% (2022: 46.6%).

Business Review

Solar Glass Business –

Rapid Revenue Growth Driven by Capacity Expansion and Strong Market Demand

Significant Improvement in Solar Glass Gross Margins in the Second Half to 26.4%

The Group's revenue from sales of solar glass surged by 33.3% YoY to HK$23,532.9 million, mainly attributable to the increase in sales volume and sales mix optimisation, partially offset by the lower average selling prices and the depreciation of the Renminbi ("RMB") against the Hong Kong dollar ("HKD"). The increase in production capacity, coupled with the accelerated growth of downstream PV demand and increased sales of thin glass products, contributed to the rapid increase in the Group's total solar glass sales volume (in terms of tonnage) in 2023, which rose 49.3% YoY.

Timely capacity expansion not only enabled the Group to capture global market growth, but also reinforced its market-leading position. By the end of 2023, the Group's daily melting capacity of solar glass reached 25,800 tonnes, an increase of 6,000 tonnes compared to the beginning of the year.

Thanks to higher average selling prices, reduced cost pressure, and improved operational efficiency, the gross profit margin of the solar glass segment significantly improved to 26.4% in the second half from 15.2% in the first half. The supply-demand dynamics for the solar glass market improved steadily in the second half of 2023 amid a rapid increase in downstream installation demand and a gradual slowdown in industry capacity growth. On the sales front, the Group adopted a flexible marketing strategy to accelerate inventory turnover, created product differentiation and further improved product quality. In terms of cost control, the Group upgraded capacity and facilities, improved technology, increased yield rates, reduced energy consumption, and optimised production and logistics processes.

Regarding the sales mix, with the gradual transition of solar cell technology from P-type to N-type and the construction of more utility-scale PV power projects, the percentage of thin glass sales increased sharply in the second half of 2023, thereby driving up the share of thin glass in total sales volume substantially compared to last year.

Solar Farm Business –

Annual Grid-connected Capacity Reaches Record High, Exceeds 1GW for the First Time

Concerning the solar farm business, following the sharp decline in solar module prices in mid-2023, the Group accelerated the installation and construction of solar farm projects in the second half of the year, achieving a record-high annual grid-connected capacity in 2023. For self-developed solar farm projects, the Group completed the grid connection of projects with an aggregate approved grid-connected capacity of 1,094MW in 2023, of which 974MW was utility-scale ground-mounted projects and 120MW was self-used distributed generation projects. The Group also acquired a solar farm project with a capacity of 10MW from a third party during the year.

Revenue from the solar farm segment increased steadily by 8.2% to HK$2,970.5 million in 2023. The increase was mainly attributable to the new capacity added in 2023 and the full-year contribution from the capacity added in 2022, partially offset by the lower weighted average FiT and the depreciation of RMB against HKD.

Meanwhile, the Group completed the sale of four solar farm projects with an aggregate capacity of 636.5MW to Xinyi Energy Holdings Limited ("Xinyi Energy") in 2023.

Driven by the continuous increase of its solar farm capacity, the Group's total power generation increased steadily in 2023. As at 31 December 2023, the cumulative approved grid-connected capacity of the Group's solar farm projects was 5,944MW, of which 5,541MW was for utility-scale ground-mounted projects and 403MW was for distributed generation projects. In terms of ownership, solar farm projects with a capacity of 3,695MW were held through Xinyi Energy; solar farm projects with a capacity of 2,149MW were held through wholly-owned subsidiaries of the Company; and a solar farm project with a capacity of 100MW was held by an entity owned as to 50% by the Group.

Prospects

Benefiting from the sharp decline in solar module prices, overall solar installation costs have fallen rapidly, which is expected to trigger further growth in downstream installation demand. The projected annual growth rate of global PV installations in 2024 is still more likely to be higher than the long-term historical average, and the actual demand for solar glass typically grows even faster than global PV installations. Supply and demand dynamics in the solar glass market are expected to improve in 2024, given the slowdown in new capacity additions in the industry and continued growth in downstream installation demand.

In view of the continued growth in market demand, the Group will expand its solar glass production capacity in an orderly manner in order to support further growth and consolidate its leading market position. The Group targets to add 6 new production lines with a total daily melting capacity of 6,400 tonnes in 2024, thereby increasing its total solar glass daily melting capacity from 25,800 tonnes at the end of 2023 to 32,200 tonnes at the end of 2024. In addition, the Group has started preparations for establishing new production bases in the PRC and overseas, including projects in Yunnan and Jiangxi provinces in the PRC and in Indonesia. The commissioning date of these new production sites is expected to be in 2025 or later.

To better cope with the uncertainty of global economic development and increasingly fierce market competition, the Group will adopt a prudent financial management strategy to control risk. In addition, the Group will continue to pursue excellence in production processes, product differentiation and innovation by expanding, upgrading and improving its solar glass production facilities, enhancing production efficiency and maintaining its high sensitivity to market changes, as well as focusing on the further development of the thin glass market, thus strengthening its competitive edge and effectively mitigating the pressure of rising procurement costs from time to time.

As for the solar farm business, the Group expects that the development of new solar foarm projects may face more challenges in 2024 as some provinces have delayed or even suspended the issuance of new solar farm project quotas in 2023. In view of various risk factors hindering project development, the Group has decided to adopt a more prudent installation target of 300 MW of grid-connected capacity in 2024.

With regard to the Group's polysilicon production facility in Yunnan Province, the construction of the project is now nearing completion, and trial production is expected to commence in the second quarter of 2024.

Dr. LEE Yin Yee, S.B.S., Chairman of Xinyi Solar, concluded, "The Group remains confident about the future development of the solar industry. Amidst the competitive market, the Group will continue to improve operational efficiency, strengthen cost control and implement product differentiation strategies to enhance competitive advantages. By promoting the parallel development of its solar glass and solar farm business, the Group will continue contributing to the global green energy translation and exemplifying our corporate mission of 'Leading Green New Energy'."