Tongwei Co., Ltd. releases the acquisition plan for Lihao Qingneng, with the target incurring a cumulative loss of over 1.1 billion yuan in two years

On March 11, Tongwei Co., Ltd. (600438.SH), a leading company in the photovoltaic industry, resumed trading with a high opening. By midday, the stock closed at 18.83 yuan per share, up 3.69%. The company disclosed a restructuring plan the previous day, proposing to acquire 100% equity of Qinghai Lihao Qingneng Co., Ltd. (“Lihao Qingneng”) from 57 shareholders, including Duan Yong, Hainan Zhuoyue, and Hainan Haoyue, through issuing shares and cash payments, while also raising supporting funds.

The plan shows that the issuance price for the shares in this transaction is 15.20 yuan per share. The total amount of supporting funds raised will not exceed 100% of the transaction price for the asset purchase via share issuance, and the number of shares issued will not exceed 30% of the company’s total equity after the transaction. As of the signing date of the plan, the audit and valuation work for the target assets have not been completed, and the specific transaction price has not been determined.

According to the plan, Lihao Qingneng’s main business involves the research, production, and sales of high-purity crystalline silicon, as well as related new energy businesses. High-purity crystalline silicon is a core raw material for wafers and a key upstream component in the photovoltaic and semiconductor industries. Relying on advanced production processes, strict quality control, and efficient capacity layout, Lihao Qingneng provides high-quality materials for the global new energy and electronic information industries.

The restructuring plan also discloses unaudited financial data for Lihao Qingneng over the past two years. From 2024 to 2025, Lihao Qingneng’s operating revenue is projected to be 3.959 billion yuan and 2.651 billion yuan, respectively; net profits are expected to be a loss of 738 million yuan and 379 million yuan.

Regarding the purpose of this transaction, Tongwei Co., Ltd. stated that, on one hand, in response to the call to “counter internal competition,” Lihao Qingneng ranks among the top ten in the industry in terms of capacity. This acquisition will help reduce the number of direct market participants, enhance flexibility in capacity regulation, support market balance, and facilitate the integration of advantageous capacities. On the other hand, it aims to optimize capacity and product layout. This acquisition is a horizontal merger aligned with the company’s industry development, which will help increase its market share in high-purity crystalline silicon. Additionally, Lihao Qingneng has a differentiated competitive advantage in green, traceable high-purity crystalline silicon products, which will enrich the company’s existing product matrix and sales channels, further boosting its global market influence.

Tongwei also highlighted risks such as “loss risks of the target company” and “long-term imbalance of capacity supply and demand” in the announcement. The company stated that, influenced by market supply and demand, product prices, and other factors, the target company has experienced continuous losses in 2024 and 2025. The entire photovoltaic industry chain in China has seen rapid capacity expansion, with nominal capacity in the silicon material segment exceeding 3 million tons, and each segment’s nominal capacity surpassing 1,000 GW. However, current market demand remains insufficient. In the future, if downstream terminal installation demand slows or declines, the target company may face prolonged capacity supply and demand imbalance, which could impact its profitability recovery.

(Company Announcement)