Tongwei Co., Ltd., a leading player in the photovoltaic industry, announced a significant development on March 29. Its wholly-owned subsidiary, Sichuan Yongxiang Co., Ltd., plans to introduce strategic investors and implement a capital increase not exceeding 10 billion yuan. This initiative aims to strengthen its capital base, optimize its financial structure, and continually enhance its competitive edge in the high-purity silicon sector.
Before this capital increase, Yongxiang Co. was valued at 27 billion yuan. The strategic investors will collectively contribute up to 10 billion yuan, allowing them to hold no more than 27.03% of Yongxiang Co.’s equity post-investment. Following this increase, Tongwei Co. will maintain at least 72.97% ownership of Yongxiang Co., ensuring it remains consolidated in the company’s financial reports.
Yongxiang Co., a global leader in high-purity silicon production, boasts a total capacity exceeding 900,000 tons and has maintained a steady market share leadership for several years. In 2023, the company reported revenues of 45.03 billion yuan and a total profit of 22.64 billion yuan. However, since the beginning of 2024, Yongxiang Co. has faced performance pressures.
The funds from this capital increase will primarily be used to repay debts to financial institutions and to supplement working capital. Tongwei Co. has already signed agreements with Industrial and Commercial Bank of China Financial Asset Investment Co., Ltd., China CITIC Financial Asset Management Co., Ltd., and Yongan Futures Co., Ltd., which will take effect upon approval from the relevant authorities. This strategic move is expected to bolster Tongwei Co.’s financial strength and aggregate various resources, further solidifying its core competitive advantages in the industry.
Market analysts have responded positively to Yongxiang Co.’s plans to attract strategic investors and increase capital. Yuan Shuai, Deputy Secretary-General of the Zhongguancun Internet of Things Industry Alliance, commented to a reporter from Securities Daily: “This initiative reflects Tongwei Co.’s thoughtful approach to capital operations and strategic planning. It not only benefits Yongxiang Co.’s development but also helps the company better tackle market challenges and achieve sustainable growth. Importantly, Tongwei Co. will retain its controlling interest in Yongxiang Co. post-investment, ensuring stability and continuity in its strategic direction.”
From an industry perspective, the previous imbalance in supply and demand during key manufacturing stages posed significant challenges to the photovoltaic sector. However, ongoing self-regulatory actions within the industry, along with positive influences from policies and demand factors, have recently shown some encouraging signs. According to InfoLink Consulting, prices for downstream products in the industry chain have risen to varying degrees. In March, the spot price for mainstream distributed components reached 0.8 yuan per watt, marking an increase of over 33% from the low point at the end of 2024.
Analysts interviewed by Securities Daily expressed optimism about the future of the photovoltaic industry. They noted, “As global demand for clean energy grows, solar power, as a significant renewable energy source, holds immense long-term market potential. The industry’s self-regulatory actions are conducive to standardizing market order and shifting competition from price to technology and quality. This will encourage companies to increase R&D investments, enhance product efficiency and quality, and promote industrial upgrades. Additionally, the integration of energy storage technology with the photovoltaic sector will create new opportunities, addressing intermittency issues and expanding application scenarios. Overall, while the photovoltaic industry faces short-term challenges, it is poised for a new phase of high-quality development driven by technological innovation and market regulation.” said Zhi Peiyuan, Vice Chairman of the Investment Professional Committee of the China Investment Association.
Wu Gaobin, Secretary-General of the New Quality Productivity and Metaverse Working Committee of the China Civil Society Federation, added, “Competition in the photovoltaic sector will intensify, with mergers, acquisitions, and resource integration becoming the norm. In the future, companies will place greater emphasis on technological innovation, cost control, and product quality, leading the photovoltaic industry to evolve towards efficiency and environmental sustainability. Furthermore, companies will enhance their resilience by pursuing integrated and diversified development, and they will increasingly collaborate with sectors such as energy storage and hydrogen energy to create a new industrial ecosystem. Demand for solar power in commercial, industrial, and residential sectors will continue to grow, providing broader market opportunities for the industry.”
