Summary of the Conference Call for Tongwei Co., Ltd. Company Overview - **Company Name**: Tongwei Co., Ltd. - **Industry**: Aquaculture feed and solar energy - **Founded**: 1982 - **Listing**: Listed on the Shanghai Stock Exchange in 2004 - **Business Model**: Dual main business model focusing on agriculture and renewable energy Key Points and Arguments Industry Challenges - The solar energy industry faced significant challenges in 2024, with a notable decline in prices across the supply chain, leading to widespread losses among industry participants [3][7][8] - The aquaculture feed industry also experienced a contraction, with a total production of 31.5 million tons, marking a decrease of approximately 660,000 tons, the first decline in five years [7][8] Financial Performance - In 2024, Tongwei reported a revenue of 91.994 billion yuan, a decrease of 33.87% year-on-year, and a net loss attributable to shareholders of 7.039 billion yuan, a decline of 151.86% [8][15] - The company achieved cash dividends exceeding 4 billion yuan in 2024, with cumulative dividends since listing surpassing 25 billion yuan [4] Business Segments - **Solar Energy**: - Tongwei is a leading producer of high-purity polysilicon, with a sales volume of 467,600 tons, a year-on-year increase of 20.76% [8] - The company maintained its position as the world's largest solar cell manufacturer, with a shipment of 87.68 GW, a growth of 8.7% [9] - The solar industry saw a 35.9% increase in installed capacity, reaching 530 GW in 2024 [7] - **Aquaculture Feed**: - The company reported a total feed sales volume of 6.8686 million tons, with significant growth in specialized aquaculture feeds [13][14] Strategic Initiatives - Tongwei is focusing on enhancing its core competitiveness in both main business areas, emphasizing technology innovation and market expansion [8][10] - The company is actively exploring overseas markets, with a 98% increase in overseas sales in 2024, particularly in the Middle East and emerging markets [10][18] Technological Advancements - The company is investing in R&D, with a significant increase in patent applications, including a 135.59% rise in authorized patents [11] - Tongwei is advancing its N-type technology, with plans to enhance production efficiency and reduce costs [11][25][36] Financial Strategy - The company is prioritizing financial safety, with a focus on controlling capital expenditures and optimizing its capital structure [16][28] - Tongwei has introduced strategic investors to strengthen its financial position and enhance operational flexibility [20][21] Market Outlook - Despite current challenges, the company remains optimistic about the long-term prospects of the solar energy industry, driven by global energy transition goals [16][23] - The company is committed to maintaining its leadership in the solar market while adapting to changing market dynamics and technological advancements [25][32] Additional Important Information - The company has established a global innovation R&D center to focus on advanced solar technologies and materials [12][13] - Tongwei is actively addressing the challenges posed by trade barriers in international markets, particularly in the context of U.S. tariffs on solar products [18][19] This summary encapsulates the key insights and developments discussed during the conference call, highlighting the challenges and strategic responses of Tongwei Co., Ltd. in the aquaculture and solar energy sectors.

Core Viewpoint - The photovoltaic industry continues to face significant losses despite some companies showing signs of reduced losses in the second quarter of 2025, indicating a challenging market environment driven by oversupply and price competition [1][3]. Group 1: Industry Performance - As of July 15, 2025, all major photovoltaic companies listed on the Shanghai and Shenzhen stock exchanges have disclosed their half-year performance forecasts, revealing a persistent trend of losses across the sector [1]. - Major companies like Tongwei Co., Ltd. and TCL Zhonghuan are expected to report substantial losses in the range of 49 to 52 billion yuan and 40 to 45 billion yuan, respectively, compared to previous losses of 31.29 billion yuan and 30.64 billion yuan [3][4]. - The decline in product prices across the photovoltaic supply chain has been a common factor contributing to the losses, with many companies unable to escape the trend of increasing sales volume without corresponding revenue growth [3][4]. Group 2: Reasons for Losses - The ongoing supply-demand imbalance in the photovoltaic industry has not significantly improved, leading to continued low prices for products despite a temporary surge in demand in the distributed market [4]. - Companies like JinkoSolar have noted that intensified competition and international trade protection policies have negatively impacted their sales prices and profitability, contributing to their losses [4][5]. Group 3: Second Quarter Performance Divergence - A noticeable divergence in performance among leading photovoltaic companies was observed in the second quarter, reflecting differences in strategic execution and cost management [5]. - TCL Zhonghuan's losses are expected to widen in the second quarter, while companies like Longi Green Energy and JinkoSolar have managed to reduce their losses compared to the first quarter [5][6]. - Aiko Solar's improved performance in the second quarter is attributed to increased sales in overseas markets, leading to a better overall gross margin [6]. Group 4: Future Outlook - The photovoltaic industry is anticipated to enter the final phase of its current downturn, with expectations of a market rebound in the third or fourth quarter of 2025 due to ongoing efforts to address supply-demand imbalances [7]. - Companies are focusing on long-term development strategies to promote sustainable growth in the photovoltaic sector, despite facing significant short-term challenges [7].

Core Viewpoint - The photovoltaic (PV) industry is facing significant challenges due to overcapacity and intense competition, leading to a need for technological upgrades and the elimination of outdated production capacity [3][4]. Group 1: Industry Overview - The International Energy Agency (IEA) estimates that global new PV installations will reach 602 GW in 2024, while China's PV industry nominal capacity exceeds 1000 GW [3]. - The nominal capacity reported by companies often includes inflated figures, structural overcapacity due to technological iterations, and ineffective capacity that lacks cost competitiveness [3]. - The industry is experiencing a downturn, but companies like Tongwei Co., Ltd. have shown notable performance despite the challenges [4]. Group 2: Tongwei's Business Development - Tongwei entered the silicon material industry through the acquisition of Yongxiang Co. in 2015 and expanded into the PV battery business in 2016 [6]. - In 2022, Tongwei's silicon material revenue reached 61.86 billion, accounting for 56.3% of its PV business revenue, while its battery and component revenues were 41.42 billion, making up 69.3% of its total revenue [8][12]. - The company has faced backlash for its low-price bidding strategies, which have disrupted market order and led to a significant drop in component profit margins [8][10]. Group 3: Market Dynamics and Financial Performance - Tongwei's high-purity silicon sales peaked in 2022 at 24.1 million yuan per ton, with a remarkable gross profit margin of 75.1%, but fell to 4.3 million yuan per ton in 2024, resulting in a gross profit margin of only 2% [14][19]. - Despite increasing sales volumes, revenue has sharply declined due to falling prices, with 2024 projected sales of 46.76 million tons generating only 19.9 billion yuan [15][17]. - The company's market share in high-purity silicon is approximately 30%, maintaining its position as a global leader, particularly in N-type products [19][20]. Group 4: Cost Structure and Competitive Position - The cost structure of Tongwei's PV products has evolved, with raw material costs accounting for 78% of total costs in 2024, down from 90% during peak market conditions [26][27]. - Labor costs have improved significantly, with unit product labor costs dropping to 44% of 2019 levels by 2024 [27][28]. - The company's integrated business model has allowed it to maintain profitability in its battery and component segments, even when high-purity silicon prices are low [35][36]. Group 5: Strategic Implications - Tongwei's expansion into the component business has proven beneficial, increasing revenue scale and operational resilience, with battery and component revenues reaching 41.4 billion yuan in 2024 [35][36]. - The company's integrated approach contrasts with competitors like TCL Zhonghuan, which has struggled with losses, highlighting the advantages of vertical integration in a competitive market [38].

Industry News - The National Bureau of Statistics reported stable growth in energy production for June 2025, with industrial electricity generation reaching 45,371 billion kilowatt-hours, a year-on-year increase of 0.8%, and an average daily generation growth of 1.3% after adjusting for the number of days [2] - Three departments issued the "Green Finance Support Project Directory (2025 Edition)" to enhance financial support for green transformation and development, effective from October 1, 2025 [2] - The 12th World Chemical Engineering Congress opened in Beijing, focusing on topics such as the reconstruction of the chemical and basic industries and future innovations in chemical engineering, featuring over 900 cutting-edge reports [2] Corporate News - China's largest underground gas storage facility, the Central Plains Gas Storage Cluster, has expanded its capacity by 7.08 billion cubic meters, now comprising seven storage facilities, enhancing seasonal peak shaving and emergency gas supply for the North China region [3] - The National Mine Safety Supervision Bureau is seeking public opinion on two industry standards, including a technical specification for 5G communication systems in coal mines [4] - The "Sky Eye" remote sensing satellite virtual constellation, developed by State Grid Electric Power Space Technology Co., has begun trial operations, improving disaster warning and emergency response capabilities for the power grid [6] - China Electric Equipment successfully developed the first 220 kV flexible wide adaptability spare transformer, marking a significant technological advancement in the power transmission and transformation equipment sector [6] Financial News - Tongwei Co., Ltd. expects a net loss of 4.9 billion to 5.2 billion yuan for the first half of the year, a significant increase from a net loss of 3.129 billion yuan in the same period last year, attributed to an imbalance in supply and demand in the photovoltaic industry [8][9] Local News - In Ningxia, renewable energy generation reached 367.59 billion kilowatt-hours in the first half of the year, with a 34.66% share of total generation, and energy storage systems contributed an additional 16.2 billion kilowatt-hours [10] - A green methanol production project in Tiaonan, Jilin Province, has commenced operations, expected to produce approximately 50,000 tons of green methanol annually and reduce carbon emissions by about 65,000 tons [12] International News - Tonga's largest renewable energy project, a wind power project, was officially handed over, attended by the King of Tonga [13] - The Iranian Foreign Ministry stated there is no clear timeline for nuclear negotiations with the U.S. [13] - An explosion occurred at an oil field in Iraq's Kurdistan region, with no casualties reported, and investigations into the cause are ongoing [13]

Core Viewpoint - The photovoltaic sector is experiencing a recovery due to the "anti-involution" trend, with significant net value rebounds for actively managed equity funds focused on this industry [1][2]. Group 1: Fund Performance - Notable fund managers like Lu Bin and Zheng Chengran have seen their funds' net values recover significantly, with Lu Bin's funds achieving over 20% gains in a three-week period [2][3]. - From June 23 to July 14, Lu Bin's HSBC Jintrust Era Pioneer A fund recorded a net value increase of 23.10%, leading the active equity fund category [2]. - Other funds managed by Zheng Chengran also reported net value increases of over 10%, with significant holdings in leading photovoltaic companies [3]. Group 2: Industry Challenges and Adjustments - The photovoltaic industry is currently facing a phase of supply-demand imbalance and energy policy adjustments, indicating a deep adjustment phase [1][4]. - Leading companies in the photovoltaic sector are under pressure, with profitability across the industry being challenged and many companies operating at a loss [3][4]. - The industry is entering a consolidation phase, where less competitive capacities are expected to exit, leading to an optimized capacity structure and improved supply-demand dynamics [3][4]. Group 3: Future Outlook and Strategies - The industry is exploring various strategies for breakthrough, including new technologies and overseas channels, although these require time for validation [4]. - The Central Financial Committee has emphasized the need to regulate low-price competition and promote the exit of outdated capacities, positioning the "anti-involution" of the photovoltaic industry as a market focus [4][5]. - Analysts suggest that the recovery of industry chain prices is crucial for the "anti-involution" strategy, with a need for substantial improvement in market supply-demand relationships [5][6]. Group 4: Investment Opportunities - Companies transitioning to the energy storage sector, those with healthy balance sheets, and segments like silicon materials are expected to benefit from the ongoing supply-side reforms [6]. - The photovoltaic sector is anticipated to see a solidification of its fundamentals, with a focus on companies that demonstrate long-term competitiveness and price recovery elasticity [6].

Core Viewpoint - The photovoltaic industry is experiencing significant losses due to supply-demand imbalances and declining prices across the industry chain, although some companies have shown signs of reduced losses or profitability in the second quarter [1][2][3]. Industry Overview - The Ministry of Industry and Information Technology and industry associations have held multiple meetings to address overcapacity and chaotic competition in the photovoltaic sector, aiming to enhance product quality and facilitate the orderly exit of outdated capacity [2]. - Despite a temporary surge in demand in the distributed market, the overall industry continues to face substantial losses, with leading companies reporting increased losses compared to the previous year [2][3]. Company Performance - Major companies like Tongwei Co., Ltd. and TCL Zhonghuan are forecasting significant losses for the first half of the year, with Tongwei expecting a net loss of 4.9 billion to 5.2 billion yuan, and TCL Zhonghuan anticipating a loss of 4 billion to 4.5 billion yuan [2]. - JA Solar Technology is also projecting a net loss of 2.5 billion to 3 billion yuan, a substantial increase from the previous year's loss of 874 million yuan [2]. Second Quarter Performance - The second quarter has shown a divergence in performance among leading photovoltaic companies, reflecting differences in strategic execution and cost control measures [3][4]. - TCL Zhonghuan expects a second-quarter loss of 2.094 billion to 2.594 billion yuan, while Tongwei's loss is projected to be between 2.307 billion and 2.607 billion yuan, remaining stable compared to the first quarter [4]. Factors Influencing Performance - Longi Green Energy and JA Solar have reported reduced losses in the second quarter, with JA Solar's expected loss decreasing to between 862 million and 1.362 billion yuan from 1.638 billion yuan in the first quarter [4]. - Longi Green Energy attributes its performance improvement to enhanced internal management and a reduction in costs and expenses [5]. Market Dynamics - Aiko Solar's improved performance in the second quarter is primarily due to increased sales in overseas markets, with a focus on Europe, Australia, and Japan, leading to a better overall gross margin [6]. - The photovoltaic industry is anticipated to enter a recovery phase by the third or fourth quarter of the year, driven by measures from regulatory bodies and companies to achieve balance in the market [6].

Core Viewpoint - The China Securities Low Carbon Economy Theme Index has shown mixed performance, with a recent decline but positive growth over the past month and three months, indicating a volatile but potentially promising investment area in the low-carbon sector [1][2] Group 1: Index Performance - The China Securities Low Carbon Economy Theme Index closed down 0.9% at 1583.71 points, with a trading volume of 36.979 billion yuan [1] - Over the past month, the index has increased by 7.35%, and by 10.32% over the last three months, while it has decreased by 1.71% year-to-date [1] Group 2: Index Composition - The index comprises companies involved in clean energy generation, energy conversion and storage, clean production and consumption, and waste treatment [1] - The top ten weighted companies in the index are: CATL (15.42%), Yangtze Power (14.38%), Sungrow Power (6.18%), LONGi Green Energy (5.51%), China National Nuclear Power (4.37%), Three Gorges Energy (3.5%), TBEA (3.49%), EVE Energy (3.1%), Tongwei Co. (3.09%), and Guotou Power (2.01%) [1] Group 3: Market Segmentation - The index's holdings are primarily listed on the Shanghai Stock Exchange (51.54%), followed by the Shenzhen Stock Exchange (48.04%), and a small portion on the Beijing Stock Exchange (0.43%) [1] - In terms of industry distribution, the index's sample shows that 69.10% is in the industrial sector, while 30.90% is in public utilities [2] Group 4: Fund Tracking - Several public funds track the China Securities Low Carbon Economy Theme Index, including: Huaxia CSI Low Carbon Economy Theme ETF, Penghua CSI Low Carbon Economy Theme ETF, Yinhua CSI Low Carbon Economy Theme ETF, and others [2]

Market Performance - The silicon energy concept index declined by 2.85%, ranking among the top losers in the market, with stocks like Tuojin New Energy, Guosheng Technology, and Hongbai New Materials hitting the daily limit down [1] - Among the stocks in the silicon energy sector, the top gainers included *ST Xinyuan, Xingfa Group, and Huilv Ecology, which rose by 6.30%, 3.78%, and 2.18% respectively [1] Capital Flow - The silicon energy sector experienced a net outflow of 1.403 billion yuan, with 39 stocks seeing net outflows, and 7 stocks having outflows exceeding 50 million yuan [1] - The stock with the highest net outflow was Jingyuntong, with a net outflow of 250 million yuan, followed by Tongwei Co., Longi Green Energy, and JA Solar Technology with net outflows of 250 million yuan, 98.796 million yuan, and 81.371 million yuan respectively [1][2] Stock Performance - The stocks with the largest net outflows in the silicon energy sector included Jingyuntong (-8.84%), Tongwei Co. (-2.28%), Longi Green Energy (-0.87%), and JA Solar Technology (-2.85%) [2] - Conversely, stocks with significant net inflows included Yanggu Huatai, Huaguang Huaneng, and Huilv Ecology, with net inflows of 29.9357 million yuan, 11.2402 million yuan, and 7.7037 million yuan respectively [1][2]

Group 1: Solar Industry - The solar industry is experiencing a dual bottom in fundamentals and market sentiment, with expectations for supply-side reforms strengthening [9][11]. - In Q2, domestic solar installations are expected to increase significantly, driven by a surge in demand, with a total of 197.9 GW added in the first five months of 2025, representing a 150% year-on-year growth [15][19]. - The profitability across different segments of the solar supply chain is expected to diverge, with silicon material prices under pressure while silicon wafers, cells, and modules benefit from price increases due to demand [13][14]. Group 2: Energy Storage - The energy storage sector is seeing a significant increase in shipments, with domestic large-scale storage demand recovering, and overall profitability remaining stable [39][44]. - In the first five months of 2025, global energy storage battery shipments reached 196.5 GWh, a year-on-year increase of 118%, driven by domestic demand and favorable tariff conditions [54][60]. - The domestic energy storage market is expected to maintain high growth, with cumulative installations reaching 13.4 GW/32.1 GWh in the first five months of 2025, reflecting a 57% year-on-year increase [54][55]. Group 3: Policy and Market Dynamics - Recent government policies are focused on addressing "involution" in competition, with measures aimed at balancing supply and demand and promoting industry self-discipline [32][34]. - The solar and energy storage sectors are expected to benefit from ongoing policy support, which is anticipated to enhance market stability and encourage technological advancements [38][36]. - The report highlights the importance of monitoring industry price trends, component production rates, and the timing of supply-side policy announcements as key indicators for investment opportunities [38].

Core Viewpoint - The recent increase in silicon material prices indicates a potential turning point in the photovoltaic industry's supply-side reform, with a focus on the silicon material segment as the first to reflect changes [1][3]. Group 1: Silicon Material Price Trends - Silicon material prices have shown a continuous upward trend in July, with current average prices rising to 40-50 yuan per kilogram, an increase of 25-35% [1][2]. - The average price of various types of silicon materials in June was approximately 5% lower than in May due to demand front-loading from the current photovoltaic installation surge [2]. Group 2: Supply and Demand Dynamics - The production data for July indicates a silicon material output of 109,000 tons, which is higher than the output of silicon wafers, suggesting that the supply-demand relationship has not yet significantly improved [2]. - The acceptance of rising silicon material prices by downstream sectors remains uncertain, as current price increases are reflected more in quotes than in actual transaction prices [2]. Group 3: Government and Industry Response - The government's increased focus on combating low-price bidding and promoting high-quality development in the photovoltaic sector is expected to reshape the supply structure in the silicon material segment [3]. - The restructuring of the silicon material industry is anticipated to involve a selection process based on financial strength, cost management, and product quality among manufacturers [3].