Tongwei Co., Ltd. In-Depth Analysis Report: Survival and Breakthrough in the Industry Winter

Based on the above data analysis, I will provide you with an

.

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China’s photovoltaic industry is experiencing the most severe overcapacity cycle in its history. According to a S&P Global Ratings research report, the total capacity of the polysilicon industry exceeded 3 million tonnes in 2024, while actual output was only about 1.8 million tonnes, with a capacity utilization rate of less than 60%[4]. Severe oversupply has emerged in all links of the industrial chain:

Segment	Capacity Utilization Rate (2024)	Price Performance
Polysilicon	~60%	Fell from RMB 59,000/tonne at the start of the year to RMB 39,000/tonne, a drop of over 35%
Silicon Wafer	~55%	Under sustained pressure, below cash cost
Solar Cell	~65% (relatively better)	Fierce price war
Module	~50%	Low-price competition has become the norm

Polysilicon prices have experienced a volatile rollercoaster trend:

• 2022 Peak Period
  : Prices exceeded RMB 300,000/tonne, with the industry enjoying excessive profits
• Second Half of 2023
  : Capacity was released in a concentrated manner, and prices began to decline
• June 2024
  : Prices fell to RMB 39,000/tonne, breaking the industry-wide cash cost
• Second Half of 2024
  : Industry self-discipline production cuts pushed prices back up to RMB 50,000-60,000/tonne
• December 2025
  : Prices were approximately RMB 53,200/tonne, an increase of over 50% from the mid-year low[2]

However, the antitrust interview conducted by the State Administration for Market Regulation in early January 2026 broke this fragile price balance. The interview explicitly prohibited enterprises from agreeing on production capacity, production and sales volume, and sales prices, directly negating the previous core operating model of “production control to support prices”[5]. This means that the profit model of relying on coordinated production cuts to maintain high prices is no longer sustainable.

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Tongwei Co., Ltd. expects a full-year net loss of

in 2025, mainly affected by the following factors[0][2]:

Influencing Factor	Specific Performance
Product price decline	Polysilicon prices broke through the cost line
Decline in operating rate	Insufficient capacity utilization, making it difficult to amortize fixed costs
Inventory impairment	Inventory scale reached RMB 15.373 billion, a year-on-year increase of 25.2%
Inventory write-down losses	Large provisions in 2024 severely eroded profits

:

• 2022: Performance peak, net profit of RMB 25.7 billion (benefiting from high polysilicon prices)
• 2023: Performance declined sharply, and losses began
• 2024: Sustained losses, stock price hit a new low in recent years
• 2025: Expected loss of RMB 9-10 billion

Indicator	Value	Industry Evaluation
P/E	-10.57x	Loss-making status
ROE	-18.28%	Under severe pressure
Net Profit Margin	-9.44%	Negative profit
Current Ratio	1.24	Average short-term solvency
Asset-Liability Ratio	~57%	Moderately high

:

• Free Cash Flow: -RMB 27.24 billion (2024)
• Operating Cash Flow: The polysilicon business turned positive in the third quarter
• Inventory Turnover Efficiency: Continued to deteriorate, inventory impairment risk increased[5]

• Current Price
  : RMB 20.02 (January 16, 2026)
• 52-Week Performance
  : New low in the past six months
• 3-Year Decline
  : 51.05%
• Technical Aspects
  : In a sideways oscillation pattern, the KDJ indicator shows oversold conditions[0]

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Tongwei Co., Ltd. has a significant scale advantage in the polysilicon sector:

Indicator	Tongwei Co., Ltd.	Industry Status
Polysilicon Capacity	900,000 tonnes (end of 2024)	Global No.1
Planned Total Capacity	Over 1.3 million tonnes	Continuous expansion
Solar Cell Capacity	95GW	Global No.1 (for 7 consecutive years)
Module Capacity	80GW	Top 5 globally
Global Market Share	~30%	No.1 in the polysilicon sector

, giving it a strong competitive advantage among domestic leading enterprises[4]:

Cost Component	Proportion	Tongwei’s Advantage
Raw Materials	~45%	Strong bargaining power from large-scale procurement
Energy	~25%	Hydropower advantage in the southwest region
Labor	~12%	High degree of automation
Manufacturing Expenses (including depreciation)	~18%	Amortized through scale effects

:

• Tongwei Co., Ltd.'s costs are in the industry’s first echelon
• Obvious advantage compared to some small and medium-sized enterprises (costs of approximately RMB 60,000-80,000/tonne)
• When the industry is generally loss-making, Tongwei is expected to be the last loss-making survivor

Tongwei Co., Ltd. continues to invest in technological upgrading[4]:

Technological Direction	Progress	Expected Effect
TNC Cells	Capacity exceeds 100GW	Cost reduction by another 20%
HJT Cells	First cell rolled off the production line	Efficiency improvement
TOPCon	Pilot line in operation	Coverage of mainstream technologies
XBC/Perovskite	R&D layout	Future technological reserve
0BB/Copper Interconnection	Key R&D focus	Cost reduction and efficiency improvement

Tongwei has developed from a single polysilicon business to an integrated layout of “Polysilicon + Cells + Modules”:

Polysilicon (900,000 tonnes) → Solar Cells (95GW) → Modules (80GW)
     ↓                    ↓
  High self-supply ratio  Overseas market expansion

:

• Self-supplied polysilicon for cells reduces procurement costs
• The module business is growing rapidly, with shipment volume entering the top 5 globally
• Overseas Markets: Added key markets such as South Africa and the UAE, and secured large overseas orders[4]

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On January 6, 2026, the State Administration for Market Regulation interviewed six polysilicon enterprises including Tongwei Co., Ltd., explicitly prohibiting the “production control to support prices” behavior[5]:

:

• The main polysilicon futures contract fell sharply after the interview
• Tongwei Co., Ltd.'s stock price was under short-term pressure
• The industry’s coordinated production cut and price support model has ended

:

• If production cuts are terminated, prices may return to a downward trend
• The risk of enterprises competing to cut prices for shipments increases
• The price decline trend in the first half of last year may recur

Risk Point	Specific Performance
Debt Scale	Continued to rise in recent years
Short-Term Debt Repayment	Current ratio of 1.24, quick ratio of 0.99
Inventory Pressure	RMB 15.373 billion in inventory, high price decline risk
Financing Environment	Industry valuation is under pressure, financing difficulty increases

• Export Tax Rebate Rate Cut
  : Starting from December 1, 2024, the export tax rebate rate for silicon wafers, cells, and modules was reduced from 13% to 9%
• VAT Rebate Cancellation
  : The export tax rebate for photovoltaic and other products will be fully canceled starting from April 1, 2026[5]
• Overseas Market Uncertainties
  : Whether demand in incremental markets such as the Middle East and Australia can be sustained

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Strategy	Specific Measures	Expected Effect
Capacity Optimization	Proactive production cuts and control	Reduce inventory backlog
Cost Control	Continuous cost reduction and efficiency improvement	Improve profitability
Inventory Management	Optimize inventory structure	Reduce impairment risk
Cash Management	Strengthen collection	Ensure liquidity

1. Technological Upgrading-Driven
   :
   • Promote mass production of high-efficiency cells such as TNC and HJT
   • Lay out next-generation technologies such as perovskite
   • Maintain cost leadership through technological innovation

2. Global Layout
   :
   • Expand overseas manufacturing bases
   • Diversify market risks
   • Seize emerging market opportunities

3. Deepened Integration
   :
   • Improve industrial chain collaboration
   • Increase the proportion of the module business
   • Enhance terminal bargaining power

4. Industry Integration Opportunities
   :
   • Focus on opportunities for small and medium-sized capacity clearing
   • Conduct mergers and acquisitions at the right time
   • Consolidate leading position

According to forecasts from institutions such as S&P Global Ratings[4]:

Time Node	Expected Changes
2025	The industry’s capacity clearing enters the later stage, and effective capacity utilization is expected to improve
2026	Supply and demand pattern is reshaped, prices and profits recover with fluctuations
2027	Backward capacity is basically cleared, and the industry returns to healthy competition

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Indicator	Value	Evaluation
P/E	-10.57x	Loss-making status, no practical significance
P/B	2.02x	In the historical low range
P/S	1.00x	Market capitalization supported by revenue scale

:

• ✓ Global No.1 in capacity scale, strong risk resistance during industry troughs
• ✓ Leading cost control, expected to be the last loss-making enterprise in the industry
• ✓ Cash flow turned positive in Q3 2024, showing signs of operational improvement
• ✓ Integrated layout smooths fluctuations in single segments
• ✓ Sufficient technological reserves, long-term competitiveness guaranteed

:

• ✗ Inventory scale remains high, price decline risk persists
• ✗ Antitrust interview broke the “production control to support prices” profit model
• ✗ The timing of the industry cycle reversal is unclear
• ✗ Debt pressure tests financing capabilities

As the

in the photovoltaic industry, Tongwei Co., Ltd. has the following core survival capabilities in the current industry winter:

1. Scale Advantage
   : 900,000 tonnes of polysilicon capacity, global No.1, obvious unit cost advantage
2. Cost Leadership
   : Production cost of approximately RMB 40,000 per tonne, in the industry’s first echelon
3. Market Share
   : ~30% market share in polysilicon, global No.1 in solar cells for 7 consecutive years
4. Technological Reserves
   : Perfect layout of new-generation technologies such as TNC and HJT
5. Integrated Collaboration
   : Full industrial chain layout of polysilicon - cells - modules

: Progress of industry capacity clearing, recovery of downstream demand, impact of antitrust policies, inventory impairment risk.

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The photovoltaic industry is in the stage of switching valuation systems from growth to cyclical. As an industry leader, Tongwei Co., Ltd. is undergoing severe tests. The company’s expected net loss of RMB 9-10 billion in 2025 reflects the structural dilemma faced by the entire industry[0][2].

:

• Cost control capability is at the leading level in the industry
• Scale advantage brings a significant moat
• Integrated strategy enhances risk resistance

depends on:

1. Progress of Industry Capacity Clearing
   : The supply and demand pattern is expected to gradually improve in 2026
2. Sustainability of Cost Advantage
   : Whether technological innovation can maintain leadership
3. Cash Flow Management Capability
   : Maintaining liquidity during the loss-making period
4. Changes in Policy Environment
   : Compliant operation after the antitrust interview

For investors, the current period is at the bottom of the industry cycle, with

. It is recommended to pay close attention to the progress of industry capacity clearing, the company’s cost control effects, and the recovery of downstream demand. During the most difficult period for the industry, Tongwei Co., Ltd. is expected to be the final survivor and benefit first when the industry recovers, relying on its scale advantages and cost control capabilities.

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[0] Jinling API Data - Tongwei Co., Ltd. Company Profile, Financial Analysis, Stock Price Data
[1] NetEase News - “Photovoltaic Industry’s Pre-Loss Alarm Sounds Loudly, These Leaders Are Set to Post Losses for Two Consecutive Years”
[2] China Energy Network - Analysis of 2025 Performance Pre-Loss of Photovoltaic Leading Enterprises
[3] Debon Research Institute - In-Depth Research Report on Tongwei Co., Ltd.
[4] S&P Global Ratings - “In-Depth Adjustment Under Photovoltaic ‘Anti-Involution’, Who Can Survive the Winter?”
[5] The Paper - “Antitrust Interview Halts Polysilicon ‘Production Control to Support Prices’, Tongwei Co., Ltd. Which Has Posted Losses for Eight Consecutive Quarters Faces Even Greater Difficulties”
[6] Huaan Securities - In-Depth Research Report on Tongwei Co., Ltd.
[7] China Development Bank Securities - In-Depth Report on Tongwei Co., Ltd.'s “Cost Is King, Proactive Layout of Photovoltaic Integration”