Company Reports

TCL Zhonghuan is a global leader in solar silicon wafer production. Its solar wafer capacity overtaken longtime champion Longi Green Energy in 2022 and became the largest in the world. After years of investment in smart manufacturing, Zhonghuan has built the most automated factories in the industry. This helps increase output and reduce costs.

TCL Zhonghuan's first-half revenue grew 7% year on year, as growth in solar modules and semiconductor wafers more than offset lower solar wafer sales. The company remained deeply lossmaking, with a net loss margin of 22%.

TCL Zhonghuan guided for preliminary net loss attributable to shareholders ranging from CNY 3.0 billion to CNY 3.3 billion in the first half of 2026.

The Chinese solar producers under our coverage—Jinko Solar, LONGi, JA Solar, Trina Solar, TCL Zhonghuan, Tongwei, and Daqo—remained loss-making through 2025 and into the first quarter of 2026.

TCL Zhonghuan is a global leader in solar silicon wafer production. Its solar wafer capacity overtaken longtime champion Longi Green Energy in 2022 and became the largest in the world. After years of investment in smart manufacturing, Zhonghuan has built the most automated factories in the industry. This helps increase output and reduce costs.

TCL Zhonghuan is a global leader in solar silicon wafer production. Its solar wafer capacity overtaken longtime champion Longi Green Energy in 2022 and became the largest in the world. After years of investment in smart manufacturing, Zhonghuan has built the most automated factories in the industry. This helps increase output and reduce costs.

TCL Zhonghuan's 2025 revenue edged up 2% year on year, while net loss narrowed by 6%.

China's solar photovoltaic sector rallied on Feb. 4 following media reports that delegations associated with Elon Musk recently visited several Chinese solar PV companies, spanning equipment, silicon wafers, cells, and modules.

TCL Zhonghuan guided preliminary 2025 net losses attributable to shareholders in the range of CNY 8.2 billion-CNY 9.6 billion. Despite the steep losses, full-year operating cash flow remained positive.

Chinese solar producers—Jinko Solar, JA Solar, Trina Solar, LONGi, and TCL Zhonghuan—all continued to report losses in the third quarter, except for CSI Solar, which remained profitable.

TCL Zhonghuan's first-half revenue dropped by 17% year on year, and the company continued to suffer operating losses.

Chinese solar producers Jinko Solar, JA Solar, Trina Solar, LONGi, Tongwei, and TCL Zhonghuan all reported losses in the fourth quarter of 2024 and the first quarter of 2025. However, CSI Solar remained profitable in both quarters.

TCL Zhonghuan is a global leader in solar silicon wafer production. Its solar wafer capacity overtaken longtime champion Longi Green Energy in 2022 and became the largest in the world. After years of investment in smart manufacturing, Zhonghuan has built the most automated factories in the industry. This helps increase output and reduce costs.

Based on their preliminary 2024 results, the four solar manufacturers—Jinko Solar, JA Solar, Trina Solar, and TCL Zhonghuan—experienced significant losses in the fourth quarter amid depressed product prices. We have revised our 2024 earnings estimates for these companies to reflect the preliminary numbers but kept our forecasts for 2025-28, awaiting the release of their full results at the end of April. Our fair value estimates remain at CNY 11.00 for Jinko Solar, CNY 22.00 for JA Solar, CNY 30.90 for Trina Solar, and CNY 10.50 for TCL Zhonghuan. Despite all four being undervalued, we prefer CSI Solar for its better earnings outlook.

We maintain our fair value estimate of CNY 10.50 for TCL Zhonghuan and consider the shares fairly valued after a 55% rise from their September lows. Despite the weak third-quarter results, we anticipate an improvement in the fourth quarter and next year. We now project a bigger loss of CNY 7.9 billion in 2024 compared with our previous estimate of CNY 5.9 billion. However, our estimates beyond 2024 remain unchanged. We expect Zhonghuan to narrow its losses in 2025 versus 2024, and it will turn profitable in 2026, helped by industry consolidation and more disciplined competition.

TCL Zhonghuan's CNY 3.1 billion net loss in the first half is in line with its preliminary guidance. Based on the weak results and our expectation of a prolonged overcapacity in the solar industry, we reduce our shipment, average selling price, and gross margin assumptions for 2024-28. We now forecast a CNY 5.9 billion net loss in 2024, down from our prior CNY 340 million net loss forecast. We project a turnaround in 2026 but reduce our net income estimates by 28%-58% for 2026-28. As a result, we've slashed our fair value estimate by 40% to CNY 10.50, which translates to a 1.1 times 2024 price/book ratio. We still think the shares are attractive, with a 36% upside to our revised valuation. Zhonghuan currently trades at a record low 0.8 times price/book ratio since being listed in 2007. To recap, it was trading at a premium to its book value in 2012 and 2018, when the solar industry was in significant downturn.

TCL Zhonghuan strives to achieve global leadership in solar silicon wafer production. Its solar wafer capacity overtaken longtime champion Longi Green Energy in 2022 and became the largest in the world. After years of investment in smart manufacturing, Zhonghuan has built the most automated factories in the industry. This helps increase output and reduce costs.

We see little impact on LONGi, Tongwei, and Zhonghuan from the US action to double the tariff rate on China-made solar cells (including those assembled into modules) to 50% from 25% in 2024 under Section 301. Currently, China-made solar cells and modules are already subject to US antidumping and countervailing duties, the Section 201 tariff, and the Section 301 tariff, which could add up to over 100% tariff rate. As a result, China’s direct export of solar cells and modules to the US is minimal, accounting for less than 0.1% of its total solar cells and modules export in 2023.

TCL Zhonghuan's 2023 net income of CNY 3.4 billion implies a CNY 2.8 billion net loss in the fourth quarter. In addition, falling solar wafer prices continued to pressure its bottom line in the first quarter, although net loss narrowed to CNY 880 million. After factoring in lower solar wafer prices amid overcapacity, we now project Zhonghuan to record a net loss of CNY 340 million for 2024 versus our previous CNY 3.9 billion net income estimate. We expect Zhonghuan to be profitable in 2025-27 but our earnings forecasts are lowered by 19%-63%. The impact from earnings cuts was mitigated by lower capital expenditure. As a result, we reduce our fair value estimate to CNY 17.50 per share from CNY 19.50. Zhonghuan's share price is currently 39% below our fair value estimate. We see buying opportunities, as we anticipate solar wafer prices to bottom out over the next few months.

TCL Zhonghuan strives to achieve global leadership in solar silicon wafer production. Its solar wafer capacity overtaken longtime champion Longi Green Energy in 2022 and became the largest in the world. After years of investment in smart manufacturing, Zhonghuan has built the most automated factories in the industry. This helps increase output and reduce costs.