TCL Zhonghuan Renewable Energy Technology Co Ltd Reports Significant Losses

TCL Zhonghuan Renewable Energy Technology Co Ltd, a key player in China’s photovoltaic industry, has reported substantial financial losses for the first half of 2025. The company, listed on the Shenzhen Stock Exchange, announced a net loss attributable to shareholders of 40-45 billion CNH, compared to a loss of 30.64 billion CNH in the same period last year. After adjusting for non-recurring items, the net loss is estimated to be 41-46 billion CNH, up from 34.89 billion CNH previously.

The company attributes these losses to a combination of factors. Despite a resilient growth in global photovoltaic installations and a short-term surge in China’s distributed market, the demand cooled down in May and June 2025. This cooling was exacerbated by imbalances in supply and demand across the industry chain, leading to inventory pressures. Consequently, product prices continued to decline, further impacting the company’s financial performance.

Industry Challenges and Strategic Missteps

TCL Zhonghuan has been a significant entity in the photovoltaic sector, achieving peak performance in 2022 with a revenue of 670.10 billion CNH and a net profit of 68.19 billion CNH. However, the cyclical nature of the photovoltaic industry has led to a deep adjustment period since 2023. The company’s revenue and net profit have been on a downward trend, with a total revenue of 284.19 billion CNH in 2024, a 51.95% decrease from the previous year, and a net loss of 98.18 billion CNH, marking its first transition from profit to loss.

In 2024, TCL Zhonghuan was the largest loss-making company among 68 photovoltaic equipment companies listed on the A-share market, earning the title of “loss king” in the industry. The situation worsened in 2025, with the company projecting a net loss of 40-45 billion CNH for the first half of the year.

Market Dynamics and Future Outlook

The photovoltaic industry has been experiencing a deep adjustment phase, with significant price declines in key segments such as silicon wafers and components. This has put pressure on the profitability of companies within the industry. As a leading player in silicon wafers, TCL Zhonghuan’s business has been significantly affected.

Despite these challenges, there are signs of improvement in the industry. The recent weeks have seen a rise in the stock prices of photovoltaic companies, with Yijin Optoelectronics and other competitors experiencing significant gains. This positive trend is attributed to improvements in industry fundamentals and supportive policies.

Investment Perspective

The photovoltaic industry ETF, closely tracking the China Photovoltaic Industry Index, has shown a positive performance, with a cumulative increase of nearly 14% over the past week. This suggests a potential recovery in the industry’s valuation, which is currently at a historical low. The ETF’s market-to-book ratio stands at 1.78, significantly lower than its three-year average, indicating a favorable valuation.

As the industry navigates through these challenges, the focus remains on achieving a sustainable recovery through policy support and effective demand generation. The ongoing adjustments in the industry are expected to pave the way for a more orderly and competitive market environment.

Conclusion

TCL Zhonghuan Renewable Energy Technology Co Ltd faces significant challenges in the current market environment. The company’s strategic missteps and the broader industry’s cyclical downturn have led to substantial financial losses. However, the recent positive trends in the market and potential policy support offer a glimmer of hope for recovery. Investors and stakeholders will be closely watching the company’s strategies and the industry’s regulatory landscape in the coming months.