In 2025, revenue slightly increased while losses narrowed. What is the key to TCL Zhonghuan's breakthrough?

Ask AI · How will TCL acquire and a new energy company change the global components market landscape?

This article is sourced from Time Weekly. Author: Yu Chen

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On the evening of March 24, 2026, TCL Zhonghuan (002129.SZ) released its 2025 annual results. The company’s full-year operating revenue was 29.050 billion yuan, a slight year-on-year increase of 2.22%; net profit attributable to shareholders was -9.264 billion yuan, with a reduced loss of 5.65% year-on-year, and non-recurring profit and loss (non-GAAP) net profit fell by 10.39% year-on-year.

In the fourth quarter, single-quarter revenue was 7.479 billion yuan, up 28.14% year-on-year; net profit attributable to shareholders was -3.487 billion yuan, with the year-on-year loss narrowing. With pressure on performance, the company clearly stated that it would not distribute cash dividends in 2025.

TCL Zhonghuan attributes the main reasons for the changes in its performance to industry cycles: in the fourth quarter of 2025, prices of upstream raw materials in the main industrial chain rose; downstream product prices remained at a low-level adjustment state and transmission was insufficient; the imbalance between supply and demand had not changed, and the company’s operations continued to face pressure.

“In China’s photovoltaic industry today, we are facing severe ‘involution-style’ competition. Supply and demand imbalances remain in the segments of the main industrial chain. Product prices are adjusting from the bottom, and the industry is suffering severe losses. Market-oriented mergers and acquisitions are the inevitable choice to break the involution and improve the industrial landscape.” TCL Zhonghuan’s Chairman, Li Dongsheng, said in his address in the company’s 2025 annual report.

A loathsome situation with negative gross margin for photovoltaic business

TCL Zhonghuan (formerly Huanxing Shares) was founded in 1958. It went public on the Shenzhen Stock Exchange in 2007. The company’s main products include new energy photovoltaic silicon wafers, photovoltaic cells and modules, other silicon materials, and the development and operation of high-efficiency photovoltaic power station projects. Its silicon wafer market share is the first in the industry.

In 2025, TCL Zhonghuan’s core business showed a clear split. Hampered by the continued decline in prices across the photovoltaic industry chain, its photovoltaic silicon wafer business performed weakly; for the full year, revenue was 12.238 billion yuan, down 26.49% year-on-year, and gross margin fell to -19.44%. By contrast, its photovoltaic module business became the growth core: revenue reached 9.324 billion yuan, up 60.45% year-on-year, with shipments up more than 80% year-on-year; however, affected by the broader industry environment, gross margin remained negative at -6.22%.

Regarding the silicon wafer price trend, in a report dated March 18, InfoLink’s research report pointed out that silicon wafer prices have already entered a bottoming-and-stabilizing stage, but the subsequent trajectory still needs close attention to changes in upstream polysilicon prices and the pace of demand recovery. Considering that there is still room for loosening on the polysilicon side, it is not ruled out that silicon wafer prices may further move down following the cost line.

On March 25, Wang Jian, an analyst at TrendForce, interviewed by Time Weekly, again emphasized the importance of cost reduction: “You cannot passively hope that the industry’s overall market will rise and bring a profit turnaround. You must rely on the company’s own cost reduction—for example, thinning, fine-lining, controlling non-silicon costs, and technological iteration.”

In its annual report, TCL Zhonghuan also clearly defined the directions for reducing costs and improving efficiency: as demand for large sizes, wafer thinning, and high-performance silicon wafers grows rapidly, the shipment volume of the company’s G12-series products increased by 40.8% year-on-year.

In September 2025, a relevant person close to TCL Zhonghuan told Time Weekly that cost reduction does not conflict with quality. The company mainly achieves cost reduction through three aspects: first, improving product quality to reduce after-sales maintenance costs; second, optimizing production processes by relying on technological innovation; third, compressing production losses with intelligent manufacturing rather than relying purely on cutting material input.

What is worth noting is that, against the backdrop of pressure across the photovoltaic business in general, TCL Zhonghuan’s semiconductor materials business has broken through despite the headwinds. During the reporting period, its semiconductor materials business achieved revenue of 5.707 billion yuan, up 21.75% year-on-year; gross margin was 18.94%, up 5.70 percentage points year-on-year, becoming an important support for the company’s performance.

Mergers and acquisitions to seek a breakthrough

“Market-oriented mergers and acquisitions are the inevitable choice to break the involution and improve the industrial landscape.” Li Dongsheng said in his 2025 annual report address. In February 2025, TCL Zhonghuan acquired 100% of the equity interests of Maxeon SolarTechnologies,Ltd.’s (hereinafter referred to as “Maxeon”) non-North America sales subsidiaries and the SunPower trademark, clarifying the parties’ global division of labor—Maxeon focuses on the U.S. high-end market, while TCL Zhonghuan leads in non-North America regions.

That same month, TCL Zhonghuan announced that Maxeon and Aisxuan Co., Ltd. (600732.SH) signed the “Patent Licensing Agreement.” Under this agreement, Maxeon grants its BC patents worldwide (excluding the United States) with a licensing term of 5 years, and total licensing fees of 1.65 billion yuan (excluding tax), paid in 5 installments, thereby strengthening the technical barrier.

However, Maxeon’s integration progress fell short of expectations. Influenced by factors including the slow advancement of overseas production capacity in the Middle East and the Philippines, Maxeon’s transformation and restructuring was unable to achieve the expected goals, and its financial condition and liquidity faced significant pressure.

In its annual report risk warning, TCL Zhonghuan explicitly mentioned that if Maxeon’s operating condition continues to deteriorate, it will have an adverse impact on the company’s overall performance. In 2025, the company made an impairment provision for goodwill related to Maxeon, and the impact on the current period profit exceeded 500 million yuan.

While Maxeon integration faced obstacles, TCL Zhonghuan turned its attention to a new energy company. In January 2026, the company announced its intention to invest in a new energy company through multiple approaches such as acquiring shares, accepting voting rights delegation, and increasing capital, attempting to fill business shortcomings.

According to an InfoLink research report, in the 2025 global module shipment ranking, TCL Zhonghuan, Yingli Development, and a new energy company were tied for 10th place. Among them, TCL Zhonghuan’s statistical scope covers five major brands: Huanxing, TCL Solar, TCL Photovoltaic Technology, SunPower, and Maxeon. The research report pointed out that if in 2026 TCL Zhonghuan’s acquisition and integration of a new energy company is successfully completed, the merger of the two parties—each of which originally had potential to be in the top ten—could enable them to move into a higher tier in the industry, further reshaping the competitive landscape of the global module market.

Regarding this restructuring, TCL Zhonghuan stated on its investor communication platform on March 20 that the related external investment is still at the planning stage, and that the investment matters and specific plans still require further demonstration, discussion, negotiation, and communication.

In addition, on March 25, Time Weekly sent an interview outline to TCL Zhonghuan’s office of the board secretary and its securities department regarding questions related to the annual report. As of the time of publication, it had not yet received a response.

In the secondary market, as of the close on March 25, TCL Zhonghuan fell 0.52%, closing at 9.64 yuan per share. Its current market capitalization is about 39 billion yuan. Judging from the share price trend, the company’s share price accumulated a decline of 3.38% over the full year of 2025. Since 2026, it has accumulated an increase of 12.49%. The market’s expectations for a recovery in its performance still await further verification.