Analysis of Photovoltaic Industry Capacity Clearing and Investment Value of Tongwei Co., Ltd. and Hesheng Silicon Industry Based on Latest Industry Data

Based on the latest industry data and enterprise information I have collected, I will systematically analyze the progress of capacity clearing in the photovoltaic industry and compare the investment value of Tongwei Co., Ltd. and Hesheng Silicon Industry for you.

• July 2025
  : The top-level signal of “anti-involution” in the photovoltaic industry began to be released intensively [1]
• Second Half of 2025
  : The level of price control continued to rise, achieving significant results in restricting low-price competition and other aspects [1]
• December 2025
  : The “Polysilicon Capacity Integration and Acquisition Platform” was established to resolve overcapacity through market-oriented methods [3]

• The spot price of polysilicon rose from
  35,400 yuan/ton to 53,600 yuan/ton
  [2]
• After the prices of the main industrial chain fell below the cash cost line of almost all enterprises, they
  rebounded and stabilized
  [3]
• In the third quarter of 2025, the anti-involution efforts across the industry increased, and the effect of policies restricting low-price competition became apparent [3]

• As a key upstream link in the industrial chain, polysilicon will take the lead in pilot capacity integration [3]
• It is expected that domestic polysilicon capacity will be reduced to
  about 1.89 million tons
  in 2026 [4]
• The annual polysilicon production schedule for 2026 will remain at
  about 1.16 million tons
  , achieving dynamic matching with market demand [4]
• 17 leading enterprises have established a storage and acquisition platform, planning to clear
  over 1.4 million tons
  of backward capacity [9]

Link	Cash Profit Margin	Profit Status
Polysilicon	About 27.21%	Profit achieved [4]
Silicon Wafer	-11.67%	Still in loss [4]
Battery Cell	-19.81%	Still in loss [4]
Module	1.34%	Slight profit [4]

• Among the 21 listed companies in the main photovoltaic industrial chain,
  14 achieved a sequential positive growth in net profit attributable to parent company in the third quarter
  [3]
• Daquan Energy, a leading silicon material enterprise, achieved
  net profit attributable to parent company of 73 million yuan
  in the third quarter, turning from loss to profit both year-on-year and sequentially [3]
• The loss amount of leading enterprises such as Tongwei Co., Ltd. and Longi Green Energy
  narrowed significantly sequentially
  [3]
• The industry lost 31.039 billion yuan in the first three quarters of 2025, of which the third quarter lost 6.422 billion yuan,
  narrowing by about 46.7% compared to the second quarter
  [8]

• Q4 2025 - Q2 2026
  : Period of accelerated capacity clearing; tail-end capacity faces exit or restructuring
• Full Year 2026
  : The industry generally hopes to achieve
  full turnaround from loss to profit
  in 2026 [2]
• Q3-Q4 2026
  : If downstream demand recovers, profit improvement may fully transmit to the main industrial chain

• Terminal demand has not yet recovered significantly; the fundamental contradiction of overcapacity remains to be resolved [3]
• The destocking effect in downstream links such as silicon wafers, battery cells, and modules is not smooth [4]
• Demand expectations for 2026 are reduced; market competition will be more intense [2]

Comparison Dimension	Tongwei Co., Ltd. (600438.SH)	Hesheng Silicon Industry (603260.SH)
Core Business	Dual main businesses: Agriculture (feed) + New Energy	Industrial silicon + Polysilicon
Product Chain	Upstream silicon material → Battery cell → Module	Industrial silicon → Organosilicon + Polysilicon
Business Synergy	Deep synergy through “Fishery-Solar Integration” model	Pure silicon material enterprise
Anti-Cyclical Ability	Feed business provides stable cash flow	Pure cyclical target with greater volatility
Current Positioning	Leader in silicon material + Battery cell	Leader in industrial silicon + Polysilicon producer

• Has
  lost money for 8 consecutive quarters
  [6]
• The net profit of the feed business in the first three quarters of 2025 reached
  1.5 billion yuan
  , an increase of 8% year-on-year [6]
• Significantly reduced losses in the third quarter of 2025; operating pressure eased [8]
• Earnings per share: -1.85 yuan; ROE:
  -17.5%
  [10]
• Gross margin:
  -2.3%
  ; Dynamic P/E ratio:
  Loss
  [10]

• Industrial silicon capacity:
  263,900 tons
  (third quarter data) [12]
• Mainly benefits from the rise in upstream silicon material prices (polysilicon has futures price hedging) [9]
• Compared with Tongwei, Hesheng is closer to the raw material end and has more obvious cost advantages
• Greater profit elasticity, but also higher downside risks

• The agricultural sector achieved operating income of
  31.74 billion yuan
  in 2024 with a gross margin of 9.38% [6]
• The feed business has become the
  core source
  and “stabilizer” of the company’s profit and cash flow [6]
• The dual main business structure of “Agriculture + New Energy” provides stronger ability to navigate cycles

• Pure silicon material enterprise; cash flow completely depends on silicon product prices
• No diversified business to hedge risks
• More benefited from the rise in silicon material prices, but faces greater pressure in the downward cycle

• P/E ratio (TTM):
  -11.31
  (loss) [10]
• P/B ratio:
  2.31
  [10]
• Market capitalization: about
  96.253 billion yuan
  [10]
• Dividend yield (TTM):
  4.23%
  [10]

-明显 driven by silicon material prices; current valuation is relatively reasonable

• Dual-driven by industrial silicon and polysilicon; greater valuation elasticity

Since Tongwei Co., Ltd.'s current ROE is negative (-17.5%) and PE is also negative, the PR value cannot be directly calculated. This reflects:

• Obvious characteristics of cycle bottom
  : Loss status means it may be close to the industry inflection point
• Reversal potential
  : Once the industry’s profit improves and ROE turns from negative to positive, there is huge room for valuation repair
• Value of bottom layout
  : Has allocation value when adopting the “undervaluation + diversification” strategy

The PR value of Hesheng Silicon Industry needs to be calculated based on the latest financial report data, but considering:

• Industrial silicon + polysilicon directly benefit from upstream price increases
• Polysilicon futures have provided price discovery and risk management tools [9]
• Closer to the raw material end than Tongwei, with greater elasticity in the price上涨 cycle

1. Risk resistance ability from business diversification
   : The feed business provides stable cash flow and profit, becoming the “ballast stone” to resist the downward cycle of photovoltaics [6]
2. Advantage of industrial chain integration
   : Complete industrial chain from silicon material to battery cell and module, with greater room for profit restoration
3. Industry leader position
   : Significant reduction in losses in photovoltaic business; operating pressure eased in Q3 2025 [8]
4. Value of bottom layout
   : After 8 consecutive quarters of losses, it may have approached the worst expectation

1. The details of the storage and acquisition platform did not meet expectations; the stock price fell by 23.27% cumulatively from November 10 to December 22 [6]
2. The photovoltaic business is still in loss; the time to turn around from loss is uncertain
3. Weak terminal demand; weak bargaining power at the module end; almost failed to share the dividend of this round of price increases [8]

1. Layout at the raw material end
   : Closer to the upstream, with obvious cost advantages
2. Directly benefit from the rise in polysilicon prices
   : Current net profit of polysilicon is 8.42 yuan/kg [4]
3. Polysilicon futures tools
   : Can hedge price risks and provide more flexible hedging strategies [9]
4. Leader position in industrial silicon
   : Significant advantage in production capacity scale

1. Pure cyclical target with greater volatility
2. No diversified business to hedge; greater pressure in the downward cycle
3. Supply-side pressure remains in 2026; demand side is difficult to change beyond expectations [5]

• 2026
  : Is the key inflection point for profit restoration in the photovoltaic industry
• Upstream silicon material has achieved profit first; profit improvement is gradually transmitting to the downstream
• It is expected that the industry will achieve full turnaround from loss to profit in
  Q2-Q3 2026

• Currently in the transition stage from “policy bottom” + “price bottom” to “performance bottom”
• The industry has initially improved in the second half of 2025; it may迎来 full turnaround from loss to profit in 2026 [2]
• The upstream silicon material link has achieved profit first; profit restoration will gradually transmit to the downstream

Evaluation Dimension	Tongwei Co., Ltd.	Hesheng Silicon Industry	Advantage Side
Business Diversification	★★★★★(Dual main businesses)	★★☆☆☆(Single silicon material)	Tongwei
Anti-Cyclical Ability	★★★★★(Supported by feed cash flow)	★★☆☆☆(Pure cyclical)	Tongwei
Profit Elasticity	★★★☆☆(Industrial chain integration)	★★★★☆(Upstream raw material)	Hesheng
Valuation Attractiveness	★★★★☆(Cycle bottom)	★★★☆☆(Reasonable valuation)	Tongwei
Margin of Safety	★★★★★(Backed by feed business)	★★★☆☆(Pure cyclical volatility)	Tongwei
Upside Elasticity	★★★☆☆(Stable leader)	★★★★☆(High elasticity of raw material)	Hesheng

• Core Logic
  : Bottom layout + dual main business hedging + industry leader
• Applicable Strategy
  : Undervaluation + diversified allocation; suitable for medium- and long-term holding
• Objective
  : Wait for the industry to fully turn around from loss to profit in 2026, and enjoy the dual benefits of valuation repair and profit improvement
• Risk-Reward Ratio
  : Relatively stable; suitable for large capital allocation

• Core Logic
  : Raw material price elasticity + polysilicon futures tools
• Applicable Strategy
  : Band operation + futures hedging; suitable for investors with high risk preference
• Objective
  : Seize the high elasticity收益 brought by the rise in silicon material prices
• Risk-Reward Ratio
  : High elasticity and high risk; suitable for small position participation

• Recommended Allocation Ratio
  : Tongwei 70% + Hesheng 30%
• Logic
  : Take Tongwei’s stability as the core, and use Hesheng’s elasticity to enhance收益
• Dynamic Adjustment
  : Dynamically adjust the ratio according to industry prosperity and profit restoration progress

1. Specific implementation progress
   and
   clearing scale
   of the polysilicon capacity integration platform
2. 2025 Annual Report
   : The extent of loss narrowing and cash flow improvement of the two companies
3. Q1 2026 Production Schedule Data
   : Whether downstream demand has recovered substantially
4. Polysilicon Futures Price
   : Reflects the market’s expectation of supply-demand balance

1. Whether the industry has achieved
   full turnaround from loss to profit
2. Whether
   terminal installation demand
   has recovered significantly
3. Whether the
   module end
   can share the dividend of price increases (current profit margin is only 1.34%) [4]
4. Overseas Market
   demand changes and impact of trade policies

• 2026
  is the key inflection point for profit restoration in the photovoltaic industry
• Upstream silicon material has achieved profit; profit improvement is gradually transmitting to the downstream
• It is expected that the industry will achieve full turnaround from loss to profit in
  Q2-Q3 2026

• Tongwei Co., Ltd.
  is more suitable for conservative investors: dual main businesses to hedge risks, high value of bottom layout, sufficient margin of safety
• Hesheng Silicon Industry
  is more suitable for aggressive investors: high elasticity of raw materials, polysilicon futures tools, large upside space but also high risk

Adopt the “undervaluation + diversification” strategy, take Tongwei Co., Ltd. as the core allocation, and Hesheng Silicon Industry as the elasticity enhancer, focusing on the inflection point opportunity of the industry’s full turnaround from loss to profit in 2026.

[0] Jinling API Data
[1] 2026 Annual Strategy for Photovoltaics: “Anti-Involution” Promotes Turnaround from Loss to Profit, β Repair Depends on Demand Expectations - Sina Finance (https://finance.sina.com.cn/stock/relnews/hk/2025-12-24/doc-inhcwxmi9812173.shtml)
[2] China’s Photovoltaic Industry Under “Anti-Involution”: Profit Inflection Point May Appear in 2026 - China Business News (http://dianzibao.cb.com.cn/images/2025-12/22/20/2633B16C.pdf)
[3] 2025 Photovoltaic Industry Review: “Anti-Involution” Promotes Price Stabilization and Accelerates Enterprise Self-Rescue - Yicai (http://fund.eastmoney.com/a/202512283603675459.html)
[4] Supply-Demand Rebalancing Game and Price Expectation Reshaping - Jiaozi Futures (http://www.btqh.com/uploadfile/2025/1226/2.pdf)
[5] Polysilicon Futures Price Falls: What’s the Trading Logic Behind It? - Sina Finance (https://www.xincai.com/article/nhcymnr3574945)
[6] Stock Price Plummeted for Days Due to Storage and Acquisition Details Not Meeting Expectations: Tongwei Co., Ltd. Lost Money for Eight Consecutive Quarters - Xinmin Evening News (https://news.qq.com/rain/a/20251223A02XCS00)
[7] P/E Ratio Valuation Fundamentals of Tongwei Co., Ltd. - Lixinger (https://www.lixinger.com/equity/company/detail/sh/600438/600438/fundamental/valuation/pe-ttm)
[8] Great Changes in Photovoltaics: Price Bottoming, Profit of Leaders Cross-Border Advance and Retreat - SOLARZOOM (http://m.solarzoom.com/article-198389-1.html)
[9] Investor Discussion on Tongwei Co., Ltd. (SH600438) on Xueqiu (https://xueqiu.com/S/sh600438)
[10] Stock Price Trend Analysis and Forecast of Tongwei Co., Ltd. - Investing.com (https://cn.investing.com/equities/tongwei)