Welcome to RealTime Mandarin—a multimedia resource to immerse you in the latest Chinese language trends, inspire you to practice and improve your Mandarin every week, and empower you to communicate with confidence.
Subscribe now to get the next issue straight to your inbox!
Sungrow Power Supply (阳光电源 yáng guāng diàn yuán) is one of China’s largest solar companies, and known as the ‘Moutai of Photovoltaics’ (光伏茅 guāng fú máo).
Investors in China’s capital markets (in A-shares) add the character máo 茅 onto the name of sector as a shorthand for the biggest company in that space. A ‘Moutai’ business normally dominates at least half of their market, as the real Moutai does in China’s liquor sector.
Other ‘Moutai-like’ businesses include:
CATL 宁德时代 is the Moutai of batteries - 电池茅 diàn chí máo
Yili Group 伊利集团 is the Moutai of milk - 牛奶茅 niú nǎi máo
Vanke 万科 is the Moutai of real estate 地产茅 dì chǎn máo
Turning back to China’s photovoltaic industry, since the double carbon goals were announced in 2019 the sector has enoyed explosive growth, with Sungrow accounting for more than 60% of China’s total photovoltaic inverter industry in 2021.
Sungrow published its 2021 annual results at the end of April, and its forecasts for Q1 this year. A significant drop in performance caused shocks across the whole industry:
全年净利润同比下降19%，四季度赚了不到8000万，同比下滑近90%。
这份“拉胯”的报表，远低于预期，也冲击了光伏新能源板块。
“2021年步子还是迈得有点大。”董事长曹仁贤将业绩下滑归于海外扩张，但阳光电源的未来之路，可能不再会那么顺遂了。
Net profit fell by 19% year-on-year. In the fourth quarter, it earned less than RMB 80 million, a year-on-year decline of nearly 90%.
This disastrous report showed that performance was far lower than expected, and has hit the whole photovoltaic new energy sector.
‘Perhaps we pushed things too far in 2021’, said company chairman, Cáo Rénxián, attributing the decline in performance to their aggressive overseas expansion.
Perhaps the future road of Sungrow may not be so smooth.
There are lots of reasons for the dramatic fall in sales, but the main one, according to tech blog 36Kr is:
主要来自于估值与业绩增速的不匹配，作为绿电领域的龙头企业，公司享受着市场给予的较高估值水平，而2021年度源于增长压力下的激进销售策略导致公司业绩突然暴雷，使得估值与实际业绩增速之间的差距不断拉大
This is mainly due to the mismatch between valuation and performance growth. As a leading business in the clean energy field, the market has put a high value on the company.
In 2021, the aggressive sales strategy and downward pressure on growth led to a sudden collapse in the company’s performance. This means the gap between valuation and actual business growth became wider and wider.
So this week we explore conversations about Sungrow and some of its competitors as they adjust to pressures in China and internationally.
The Favourite Five
Of this weeks favourite five words, four have their origins in non-Chinese thinking, ideas or language!
1. 拉胯 lā kuǎ
make a mistake at a critical time
这份“拉胯”的报表，远低于预期，也冲击了光伏新能源板块 - This disastrous report was way below expectations, and had a negative impact on the share prices in the whole sector.
Note: a northern dialect word which was originally discussed on 8 January newsletter.
2. 暴雷 bào léi
explode, collapse
激进销售策略导致公司业绩突然暴雷 - Its aggressive sales strategy caused company performance to collapse.
Note: this is a financial neologism which always has negative connotations.
Related: 炸雷 zhà léi - explode
3. 卖铲子 mài chǎn zi
selling shovels
在投资人眼中，光伏逆变器本是“卖铲子”的生意，稳赚不赔 - In the eyes of investors, photovoltaic inverters are the equivalent of ‘selling shovels in a gold rush’. It’s a solid business that always delivers good returns.
Note: a reference to the American idiom which dates back to the gold rush in California in the 1850’s.
4. 旋转门 xuán zhuǎn mén
revolving door, at a cross-roads
巨头们似乎又如同十多年前一般，走进了命运的旋转门 - The major players in the sector seem to have returned to a time like ten years ago when they all faced the revolving door of fate.
Note: originally from the American idiom, ‘revolving door’ between politics and business. But here is means to come to a crossroads when things might not turn out so well.
5. 强者恒强 qiáng zhě héng qiáng
the strongest get stronger
随着行业发展，竞技门槛也在提升，似乎到了强者恒强的阶段 - As the industry develops, and the technological barriers to entry increase, it seems we have arrived at a time where the strongest become increasingly dominant.
Note: this is from the original English phrase, Matthew effect of accumulated advantage, Matthew principle, or Matthew effect for short, is sometimes summarised by the adage ‘the rich get richer and the poor get poorer’.
The full phrase in Chinese is: 强者恒强，弱者恒弱 qiáng zhě héng qiáng, ruòzhě héng ruò - 'the strong get stronger, the weak become weaker’.
Consuming the Conversation
The Basics
光伏 guāng fú - photovoltaic
逆变器 - solar inverter
硅料 guī liào - silicon
The main companies referred to are:
Sungrow Power Supply 阳光电源 yáng guāng diàn yuán
Tongwei Solar 通威太阳能 tōng wēi tài yáng néng
LONGi Green Energy Technology 隆基股份 lóng jī gǔ fèn
Useful Words
坎坷 kǎn kě
bumpy
市场吃了一惊，也才回想起，光伏行业的本质，坎坷且内卷 - The market was surprised, which was a reminder that the solar industry is difficult and competitive.
泡影 pào yǐng
a burst bubble
曾喊出建设“千亿光伏产业园”的规划也早已成为泡影 - The plan to build a ‘100 billion photovoltaic industrial park’ has long since disappeared.
沾光 zhān guāng
touch light; benefitted from
在碳中和的政策下，光伏行业长期的景气度自然也让逆变器沾了光 - With the carbon neutral policy goal, the photovoltaic industry’s long-term prospects have also had a positive effect on inverter manufacturers.
壁垒 bì lěi
barrier
从进入壁垒来看，逆变器行业的技术壁垒和资本壁垒并不高 - From the perspective of barriers to entry, the technical and capital barriers in the inverter industry are not high.
板斧 bǎn fǔ
axe, main focus
阳光电源就凭借着成本和服务这两板斧一路攻城略地 - Sungrow has seized market share by focussing on cost and service.
猛药 měng yào
strong medicine
阳光电源不得不再掏出曾经维持增长的两板斧，给自己打一剂猛药：继续推进渠道建设 - Sungrow had to focus on its two main strengths that previously delivered growth and self-administer a strong medicine: continue to build sales channels.
