New stock outlook: Industry leaders also find it difficult to resist price cold winter, can "anti-inner loop" drive Zhongrun Optical Energy value revaluation?

Six months later, there was news about the listing process of the world's largest specialized manufacturer of photovoltaic cells on the Hong Kong Stock Exchange. After submitting their initial listing application to the Hong Kong Stock Exchange Main Board on March 13, Jiangsu Zhongrun Solar Technology Co., Ltd. (hereinafter referred to as "Zhongrun Solar") submitted their second listing application on September 15, with China Securities Co., Ltd. International and CITIC SEC as joint sponsors. According to the prospectus, unlike integrated manufacturers of photovoltaic products, Zhongrun Solar is a specialized manufacturer of photovoltaic cells, with the majority of their cell products being directly delivered to external customers. While continuing to focus on photovoltaic cell production, Zhongrun Solar has also vertically expanded into the manufacturing and sales of photovoltaic modules. Frost & Sullivan indicated that based on the photovoltaic cell shipments for 2024, Zhongrun Solar ranked first among specialized manufacturers with a shipment volume of 34.5GW, holding a market share of 18.3%; second among all photovoltaic cell manufacturers, with a market share of 14.6%. Clearly, Zhongrun Solar's photovoltaic cell shipment volume is at the forefront of the industry. In terms of financial performance, from 2022 to 2024, Zhongrun Solar's revenues were 12.517 billion yuan, 20.838 billion yuan, and 11.32 billion yuan respectively, with net profits of 834 million yuan, 1.681 billion yuan, and -1.363 billion yuan during the same period. In the first half of 2025, Zhongrun Solar's revenue was 7.465 billion yuan, a 26.46% year-on-year increase, with a net profit turning from a loss to a profit of 1.204 billion yuan. Despite leading the industry in shipment volume, the significant fluctuation in performance is still evident for Zhongrun Solar. Therefore, in the new industry context of "anti-industrial transfer," can Zhongrun Solar embark on a path of stable growth? Photovoltaic modules as a new growth curve, accelerating international layout Founded in 2011, Zhongrun Solar has been deeply involved in the field of photovoltaic cells for over fourteen years, gradually becoming the world's largest specialized manufacturer of photovoltaic cells. With the synergistic effect of its business, Zhongrun Solar began expanding downstream to the module segment in 2021 to create a new growth curve for the company. Currently, Zhongrun Solar mainly operates in two business lines: photovoltaic cells and photovoltaic modules. According to the prospectus, by 2024, Zhongrun Solar's revenue from photovoltaic cells accounted for 81.1%, dominating the company's income. Of this, monocrystalline cells accounted for 80.9%, including P-type and N-type categories, with shares of 32.8% and 48.1% respectively. Module revenue accounted for 18.7%, showing the effectiveness of the new growth curve. In detail, Zhongrun Solar's N-type cells have been rapidly increasing in volume. From 2022 to 2024, the proportion of N-type cell revenue to total revenue for Zhongrun Solar was 0%, 14.6%, and 48.1% respectively, showing rapid growth. This is mainly due to the current N-type technology surpassing P-type technology in the market, especially TOPCon technology, which can be upgraded on existing PERC production lines at relatively low investment costs, making it the preferred route for traditional manufacturers to expand N-type production capacity. Taking advantage of the industrial opportunities presented by the shift from P-type to N-type photovoltaic cells, Zhongrun Solar has achieved leadership in key competitive indicators for photovoltaic cells: conversion efficiency and non-silicon costs. According to the prospectus, as of June 30, 2025, Zhongrun Solar's N-type cell production conversion efficiency was above 27.2%, while the industry average conversion efficiency for N-type cells was 26.5%, higher than the industry average. Furthermore, Zhongrun Solar's domestic N-type cell non-silicon costs in the first half of 2025 could reach as low as 0.1215 yuan/W, lower than the industry average cost of 0.14 yuan/W during the same period. Zhongrun Solar stated that as of September 8, 2025, the company's effective N-type cell production capacity was about 49GW, with around 6GW of N-type cell production capacity undergoing production line upgrades. After completing the aforementioned production line upgrades, the company's total N-type cell production capacity is expected to be around 55GW. In response to potential market changes in photovoltaic cell technology routes, Zhongrun Solar has actively engaged in research and development activities for HJT, xBC, and other photovoltaic cell technologies, building strategic technological reserves. Based on production costs, conversion efficiency, and market demand, the company will strategically select locations to introduce new technology products and efficiently meet market demand. While deepening its product offerings, Zhongrun Solar has also accelerated its international layout. In addition to selling products to domestic customers, the company also exports to the United States, Europe, the Middle East, Southeast Asia, and South Asia. Zhongrun Solar has established over 15GW of monocrystalline cell capacity and over 3GW of photovoltaic module capacity overseas, expanding its customer base globally. During the reporting period, Zhongrun Solar's business extended to more than 32 countries and regions, encompassing over 1,000 customers. According to Frost & Sullivan data, in 2024, Zhongrun Solar's customers included major photovoltaic module manufacturers, nine of which were among the top ten global photovoltaic module manufacturers (in terms of shipment volume). Looking at the revenue regionally, in 2024, Zhongrun Solar's revenue from mainland China accounted for 67.1%, while revenue from other countries and regions accounted for 32.9%. Revenue from Vietnam, India, and the United States accounted for 9.6%, 10.1%, and 9.3%, respectively. The overseas layout has already shown results. "Anti-industrial transfer" driving performance recovery, core competitiveness key to medium and long-term development The significant fluctuations in Zhongrun Solar's past performance are not isolated incidents but common occurrences within the industry. In recent years, the concentration and rapid release of capacity at various levels of the photovoltaic industry chain has resulted in a market oversupply far exceeding actual demand, creating a severe imbalance between supply and demand. In the context of supply and demand imbalances, fierce competition has forced companies to engage in "low-price bidding" to maintain market share, leading to continuous significant price declines. Data shows that in the first half of 2025, prices for mainstream products such as polysilicon, silicon wafers, cells, and components have dropped between 60% and 90% compared to their peak in 2020. With prices continually falling, companies can only adopt a "speed up shipments" strategy to maintain cash flow and market share, as seen with Zhongrun Solar. From 2022 to 2024, Zhongrun Solar's average cell selling price decreased significantly from 0.9945 yuan/W to 0.3202 yuan/W, with corresponding cell shipment volumes of 13.2GW, 34.9GW, and 34.5GW. In 2023, Zhongrun Solar's cell shipments surged from 13.2GW to 34.9GW, and photovoltaic modules continued to ramp up, resulting in rapid growth in revenue and net profit. However, by 2024, due to the switch from P-type to N-type cells, shipment volume did not increase. Despite the rapid increase in module shipments, Zhongrun Solar's revenue significantly declined, and net profit turned from positive to negative due to the continuous drop in average selling prices. Facing the continuous decline in product prices within the photovoltaic industry, a systematic "anti-industrial transfer" initiative led by the government, industry associations, and companies has emerged. The initiative aims to reverse the previous situation of severe low-price disordered competition, shift the industry from a "price war" to a "value war," and achieve high-quality development. With policy guidance and proactive efforts from industry associations and leading companies, there has been a substantial change in the supply side of the photovoltaic industry. For example, several polysilicon companies voluntarily reduced production in the second half of 2024, and top photovoltaic glass companies collectively reduced production by about 30% in July 2025, effectively controlling supply. The industry has reached a consensus on resolving excess capacity through mergers and reorganizations, with some leading companies taking the lead in promoting industry consolidation. Benefiting from the visible effects of "anti-industrial transfer," in the first half of 2025, Zhongrun Solar's average cell selling price increased from 0.3096 yuan/W to 0.4392 yuan/W, a 41.86% increase. Similarly, cell shipment volume increased from 18.3GW to 19.4GW, leading to a 26.46% growth in revenue to 7.465 billion yuan and a reversal from a net loss of 745 million yuan to a profit of 1.204 billion yuan, driven by the simultaneous rise in volume and price. Thus, the effects of "anti-industrial transfer" are clearly reflected in Zhongrun Solar's performance in the first half of 2025. However, in the medium to long term, the core of "anti-industrial transfer" is to ensure cash flow and survival space for companies. For sustained growth, companies must focus on building core competitiveness, such as increasing investment in research and development of advanced technologies like BC, TOPCon, HJT, and perovskite, and seeking consolidation and market share expansion through mergers, reorganizations, or strategic collaborations. In its prospectus, Zhongrun Solar stated that the funds raised will be used to establish the CECEP Solar Energy Advanced Research Center for perovskite stack CECEP Solar Energy cells to break through technological barriers and accelerate their industrialization. The company will focus on three cutting-edge configurations: perovskite - HJT stack cells, perovskite - TOPCon stack cells, and perovskite - silicon stack modules. It can be foreseen that the successful development of new high-efficiency technologies and their commercialization will be key factors in determining Zhongrun Solar's valuation level and medium to long-term development.