阳光能源(00757) - 2025 - 中期财报

Corporate Information This section provides detailed information on the company's board of directors, committees, auditors, principal bankers, registered office, Hong Kong head office and principal place of business, share registrar, legal representative, and corporate website - Board changes: Mr. Tan Wenhua retired as Chairman on June 10, 2025, and Mr. Tan Xin was appointed Chairman and CEO on the same day[4] - Auditor: Ernst & Young[5] - Corporate website: www.solargiga.com[10](index=10&type=chunk) Company Profile Solargiga Energy Holdings Limited is a leading solar service provider primarily engaged in the manufacturing and sales of PV modules, installation of PV systems, and the development, design, construction, operation, and maintenance of PV power plants - Principal businesses: Manufacturing and trading of PV modules; construction and operation of PV power plants; manufacturing and trading of semiconductors and others[11][15] - As of the end of June 2025, the Group's total module production capacity was 10.2 GW[12][14] - Main customers for PV modules: Large domestic central enterprises, multinational corporations, and other end-use PV application customers[11] Financial Highlights The Group experienced a significant decline in revenue and a shift from gross profit to gross loss in H1 2025, leading to an increased net loss attributable to owners of the parent, primarily due to intense market competition and falling PV module prices 2025 H1 vs 2024 H1 Key Financial Data Comparison | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :-------------------------------- | :----------------------- | :----------------------- | :--------- | | Revenue | 1,022,337 | 1,693,242 | -39.6% | | (Gross loss)/Gross profit | (8,807) | 21,965 | N/A | | Loss/(Profit) for the period | (109,682) | (101,719) | +7.8% | | Loss/(Profit) attributable to owners of the parent | (109,117) | (101,147) | +7.9% | | Basic loss/(earnings) per share (RMB cents) | (3.28) | (3.04) | +7.9% | Management Discussion and Analysis This section provides an in-depth analysis of global and China's PV market performance, the Group's operational strategies and achievements, a detailed review of key financial indicators, and an outlook on future business development, highlighting challenges from overcapacity and price competition, and the company's strategic responses through technological innovation and overseas expansion Market Overview The global PV market is undergoing a deep adjustment, influenced by economic weakness, trade barriers, and overcapacity, yet long-term growth potential remains significant, driven by energy transition and technological advancements, with policy guidance accelerating industry restructuring towards demand differentiation, technology leadership, and industry consolidation I. Global PV market performance of the industry in which we operate The global PV industry is entering a period of deep adjustment amidst continuous expansion, facing challenges such as economic weakness, tariff barriers, and overcapacity, yet it holds immense long-term growth potential, with solar investment projected to be the largest single item in global energy investment in 2025, accelerating technological iteration driving down LCOE, and the market evolving towards diversification, regionalization, and scenario-based development - Global total energy investment is expected to increase to US$3.3 trillion in 2025, a 2% year-on-year increase[19] - Solar investment is projected to reach US$450 billion, becoming the largest single item in the global energy investment list[19] - The global PV industry is undergoing a profound restructuring, with competition shifting from extensive expansion to a technology-driven, high-intensity reshuffle phase[26] - Technological iteration is accelerating the reduction of PV levelized cost of electricity (LCOE), with TOPCon technology's market share increasing from 25% in 2023 to over 70% in 2024, and expected to exceed 80% in 2025[33][35] - The market is characterized by diversification, regionalization, and scenario-based evolution, with rapid growth in China's industrial and commercial PV sector, and "PV + energy storage" becoming mainstream in overseas residential markets[34][37] II. The Performance of the PRC Market in the Industry As of the end of June 2025, China's cumulative solar power generation capacity reached 1.1 billion kW, a year-on-year increase of over 54.2%, firmly securing its position as the second-largest power source; despite a slight year-on-year decrease in PV module exports, new installed capacity grew by 107.07% year-on-year, indicating strong short-term demand, but market development uncertainty is heightened in the second half of the year - As of the end of June 2025, China's cumulative solar power generation capacity reached 1.1 billion kW, a year-on-year increase of over 54.2%[37] - From January to June 2025, China exported 125.6 GW of PV modules, a year-on-year decrease of 2.82%[37] - In H1 2025, China's new PV installed capacity reached 212.21 GW, a year-on-year increase of 107.07%[39] - BloombergNEF (BNEF) predicts China's new installed capacity could reach 368 GW in 2025, accounting for more than half of the global increase[39] - Uncertainty in China's PV market development significantly increased in H2 2025, affected by the "rush installation" overdraft effect and "anti-involution" policies[39] III. The Performance of Overseas Key Markets in the Industry Overseas major PV markets show varied performance: the US market faces policy uncertainty but maintains long-term growth; despite challenges, solar power became the EU's largest electricity source in June 2025; India continues high growth, becoming the third-largest global PV market; the Middle East shows strong potential with large ground-mounted power plants as the mainstream; and Southeast Asia and other emerging markets also exhibit rapid expansion - US market: InfoLink Consulting forecasts PV module demand to reach 42–49 GW in 2025, potentially reaching 80 GW by 2030[43][46] - European market: In June 2025, solar power surpassed nuclear and wind for the first time, becoming the EU's largest electricity source with a 22.1% share of generation; TrendForce predicts Europe's new PV installed capacity could reach 101.5 GW in 2025, a year-on-year increase of 6.2%[44][47] - Indian market: As of June 2025, renewable energy installed capacity reached 234 GW, with solar accounting for 50% (approximately 117 GW), making it the third-largest global PV market[45][48] - Middle East market: IEA forecasts an average annual growth of 23% in solar power generation from 2025 to 2027, with PV's share in the renewable energy mix expected to increase to 70% by 2027[49][52] - Southeast Asian market: InfoLink Consulting predicts PV demand could increase to 9–15 GW in 2025[50][52] - Other emerging markets (South Asia, Latin America, and Africa): Demand growth is stable, with import volumes repeatedly hitting new highs, providing significant growth momentum for the global PV industry[51][53] IV. Future development trends The global PV market is expected to maintain strong growth in H2 2025 and 2026, with long-term recovery to double-digit growth; future trends will feature "demand differentiation and technology leadership," N-type cells will become mainstream, regulators will actively intervene to promote industry consolidation, and Chinese PV enterprises will accelerate "going global" for worldwide deployment; the Group will address challenges through technological innovation and market diversification - SolarPower Europe projects global new PV installed capacity to reach 655 GW in 2025, a 10% increase, with China accounting for 53% (approximately 350 GW)[54][56] - Global annual new installed capacity is expected to reach 1 TW by 2030, with cumulative installed capacity of 7.1 TW[54][56] - The global PV market will exhibit "demand differentiation and technology leadership" characteristics, with N-type silicon wafer penetration exceeding 90%, N-type cells (TOPCon/HJT) becoming mainstream, and perovskite commercialization accelerating[55][57] - Regulatory bodies are actively intervening, with China's National Development and Reform Commission Price Department and the Ministry of Industry and Information Technology leading a symposium, explicitly stating the need to resolutely curb excessive "involution" and irrational price wars in the industry, emphasizing that enterprises must not sell below production costs[59][62] - Chinese PV enterprises will accelerate their "going global" strategy, deploying production capacity and expanding markets worldwide to mitigate trade risks and seek new profit growth points[64][67] - The Group will simultaneously advance R&D for new products like TOPCon and HJT focusing on revenue enhancement, carbon footprint reduction, and scenario customization, while establishing "key customer" and "less competition" principles for overseas expansion and building an elite overseas sales team[58][61][65][67] Operation Review Leveraging 20 years of PV industry experience, the Group focuses on high-quality development in downstream PV module manufacturing and sales, PV system installation, and semiconductor businesses; despite challenges from industry overcapacity and intense price competition in H1 2025, the Group enhances competitiveness through technological innovation, product diversification, and cost control Operations Summary As a vertically integrated solar service provider with 20 years of PV industry experience, the Group's main businesses include PV module manufacturing and sales, PV system construction and operation, and semiconductor business; the Group has obtained over 400 national patents and numerous industry honors, with a total module production capacity of 10.2 GW, and is actively developing new application areas such as BIPV and zero-carbon mobile buildings - Core businesses: Manufacturing and sales of downstream PV modules, installation of PV systems, development, design, construction, operation, and maintenance of PV power plants, as well as semiconductor manufacturing and trading[68][197] - Experience and honors: 20 years of deep cultivation in the PV industry, holding over 400 national patents, and awarded titles such as National High-tech Enterprise, National Green Factory, and ranked 15th among China's Top 20 PV Module Enterprises in 2025[69][70] - Module capacity: As of the end of June 2025, total annual module production capacity across all production bases is 10.2 GW, with Yancheng, Jiangsu, contributing 8.3 GW[71][73][75][76] - Module products: Focus on developing and selling high-efficiency monocrystalline module products, such as N-type high-efficiency modules, large-size modules, busbar-less modules, flexible modules, offshore modules, multi-busbar cell modules, and all-black modules[72][76] - PV system business: Includes traditional distributed power plant EPC, EV PV charging stations, BAPV, BIPV, and zero-carbon mobile building businesses, with a focus on developing BIPV and zero-carbon mobile buildings as two major application areas[79][80] - Semiconductor business: Primarily engaged in the production and sales of 6–8 inch heavily/lightly doped semiconductor-grade monocrystalline silicon rods and 13–15 inch semiconductor monocrystalline silicon, with 8 inch "automotive chip wafers" heavily doped monocrystalline silicon expected to be mainstream in the next three years, and R&D for 12 inch high-end products underway[84][86] Operation Strategy The Group's operational strategy involves continuously reducing PV power generation costs through technological innovation, upgrading existing capacity and facilities to improve production efficiency, and focusing on developing a core module product portfolio, thereby enhancing market share and maintaining stable export channels by establishing direct supply relationships with large central enterprises and multinational corporations, leveraging significant module capacity and low-cost, high-quality advantages - Technological innovation: Continuously advancing PV production technology leaps and cost-effectiveness improvements to achieve grid parity and low-price grid connection targets[85][87] - Capacity upgrade: Continuously upgrading existing capacity and facilities to align with technological advancements and improve production efficiency[85][87] - Core product strategy: Continuing to develop the module product portfolio, focusing on effective utilization of existing resources and capacity[88][91] - Market expansion: Establishing direct supply relationships with large domestic central enterprises and international multinational corporations, leveraging significant module capacity and low-cost, high-quality advantages to maintain more stable export channels for module products[88][91] Operating Performance In H1 2025, the Group faced severe challenges from oversupply across the entire PV industry chain and intense price competition, leading to a 20.9% decrease in PV module external shipments; despite this, the Group actively responded to market changes by launching diversified, high-efficiency module products and applying cost-reducing and efficiency-improving materials, with market prices expected to gradually stabilize and operating performance likely to improve in the future - PV module external shipments: Decreased from 1,908.9 MW in the same period last year to 1,509.5 MW in the current period, a 20.9% reduction[90][92] - Market competition: Oversupply across the entire PV industry chain and vicious competition among peers led to average product selling prices significantly below sustainable production costs[90][92] - Product diversification: Launched monocrystalline high-efficiency module products for various application scenarios, including large-size high-power modules (up to 740W), 183N series all-black modules, low-gloss modules, 2000V system voltage modules, HJT cell modules, 0BB cell modules, and lightweight modules[93][95] - Cost control: Actively promoted the application of efficiency-improving and cost-reducing materials, such as gap reflective film, laser welding wire, new aluminum alloy frames, and low-grammage encapsulant film, effectively reducing module costs[94][96] - Future outlook: PV module market price declines are expected to gradually stabilize, and the Group will seize market share through product application, performance and quality improvements, technological cost advantages, and a strong customer base[97][100] Financial Review In H1 2025, the Group's financial performance was significantly impacted by falling PV module prices and reduced shipments, leading to increased gross loss and net loss; key financial indicators such as revenue, gross margin, and various expenses experienced substantial changes, with a significant increase in impairment losses on trade receivables and a rise in net gearing ratio, indicating a decrease in liquidity Revenue The Group's revenue for H1 2025 was RMB1,022.3 million, a 39.6% decrease compared to H1 2024, primarily due to reduced PV module external shipments and continuous price declines Revenue Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :----------------------- | :----------------------- | :--------- | | Revenue | 1,022.3 | 1,693.2 | -39.6% | - Main reasons: Reduced PV module external shipments and intense market competition leading to continuous declines in PV module prices[98][101] Cost of sales Cost of sales for the period was RMB1,031.1 million, a 38.3% decrease from H1 2024, consistent with the trend of reduced PV module external shipments and declining revenue Cost of Sales Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :----------------------- | :----------------------- | :--------- | | Cost of sales | 1,031.1 | 1,671.3 | -38.3% | - Main reasons: Consistent with reduced PV module external shipments and corresponding revenue decline[99][102] Gross profit margin The Group's gross margin for H1 2025 turned negative at -0.9%, recording a gross loss of RMB8.8 million, compared to a gross margin of 1.3% and a gross profit of RMB22.0 million in H1 2024, primarily attributable to the decrease in average selling price of PV modules and increased unit fixed costs due to lower production volume Gross Margin and Gross Profit Comparison | Metric | H1 2025 | H1 2024 | | :---------------- | :----------- | :----------- | | Gross margin | -0.9% | 1.3% | | Gross loss/Gross profit | (RMB8.8 millions) | RMB22.0 millions | - Main reasons: Decrease in average selling price of PV modules; increase in unit fixed costs due to lower production volume[103][107] Selling and distribution expenses Selling and distribution expenses recorded a net gain of RMB12.3 million for the period, a significant shift from a net expense of RMB38.9 million in H1 2024, primarily due to a larger reversal of warranty provisions amounting to RMB36.0 million, as the estimated liability for future warranty claims decreased due to continuous declines in average module selling prices Selling and Distribution Expenses Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | | :----------------------------- | :----------------------- | :----------------------- | | Selling and distribution expenses, net | 12.3 (net gain) | (38.9) (net expense) | | Reversal of warranty provisions | 36.0 | 4.8 | - Main reasons: Larger reversal of warranty provisions, as the estimated liability for future warranty claims decreased due to continuous declines in average module selling prices[104][107] Administrative expenses Administrative expenses for the period were approximately RMB81.9 million, a 20.3% decrease from RMB102.8 million in H1 2024, primarily attributable to the Group's increased efforts to enhance operational efficiency and implement strict cost controls Administrative Expenses Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :-------------------- | :----------------------- | :----------------------- | :--------- | | Administrative expenses | 81.9 | 102.8 | -20.3% | - Main reasons: The Group's increased efforts to enhance operational efficiency and implement strict cost controls[105][108] Impairment losses on trade receivables and contract assets Impairment losses on trade receivables and contract assets for the period were RMB39.8 million, a significant increase from RMB0.3 million in H1 2024, primarily due to a full provision of approximately RMB40.22 million for balances due from one customer after a final judgment in their favor, and impairment of RMB3.99 million for other customers with settlement agreements Impairment Losses on Trade Receivables and Contract Assets Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | | :------------------------------------------ | :----------------------- | :----------------------- | | Impairment losses on trade receivables and contract assets | 39.8 | 0.3 | - Main reasons: A full provision of approximately RMB40.22 million for one customer (due to a final judgment in their favor), and impairment of RMB3.99 million for other customers with settlement agreements[106][109] Impairment losses of property, plant, and equipment Impairment losses of property, plant, and equipment in H1 2025 were approximately RMB9.0 million, an 81.6% decrease from RMB48.8 million in H1 2024, primarily due to the recoverable amount being lower than the carrying amount of certain property, plant, and equipment Impairment Losses of Property, Plant, and Equipment Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :------------------------------------------ | :----------------------- | :----------------------- | :--------- | | Impairment losses of property, plant, and equipment | 9.0 | 48.8 | -81.6% | - Main reasons: The recoverable amount was lower than the carrying amount of certain property, plant, and equipment[110][115] Finance costs Finance costs decreased by 29.0% from approximately RMB31.4 million in H1 2024 to approximately RMB22.3 million in the current period, primarily from bank and other borrowings, as the Group continues its efforts to reduce financing costs Finance Costs Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :------------- | :----------------------- | :----------------------- | :--------- | | Finance costs | 22.3 | 31.4 | -29.0% | - Main reasons: The Group continues its efforts to reduce financing costs by optimizing financing channels[111][116] Income tax Income tax expense of approximately RMB1.6 million was recorded in H1 2025, compared to an income tax credit of approximately RMB4.0 million in H1 2024, primarily due to the reversal of deferred tax assets by the Group Income Tax Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | | :---------- | :----------------------- | :----------------------- | | Income tax | 1.6 (expense) | 4.0 (credit) | - Main reasons: Attributable to the Group's reversal of deferred tax assets[112][117] Loss attributable to owners of the parent Net loss attributable to owners of the parent for the period was approximately RMB109.1 million, a slight increase from approximately RMB101.1 million in H1 2024, primarily due to a gross loss and significant impairment losses on trade receivables and contract assets, partially offset by reduced administrative and selling expenses, lower finance costs, and reduced impairment of property, plant, and equipment Loss Attributable to Owners of the Parent Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :-------------------------------- | :----------------------- | :----------------------- | :--------- | | Loss attributable to owners of the parent | 109.1 | 101.1 | +7.9% | - Main reasons: Gross loss and significant impairment losses on trade receivables and contract assets, largely offset by reduced administrative and selling expenses, lower finance costs, and reduced impairment of property, plant, and equipment[113][118] Inventory turnover days Inventory turnover days increased to 65 days for the period, compared to 35 days as of December 31, 2024, primarily due to a strategic reduction in order intake and external shipments in response to unfavorable market pricing Inventory Turnover Days Comparison | Metric | H1 2025 (days) | December 31, 2024 (days) | Change (days) | | :-------------------- | :---------------- | :------------------- | :-------- | | Inventory turnover days | 65 | 35 | +30 | - Main reasons: Strategic reduction in order intake and external shipments in response to unfavorable market pricing[114][119] Trade receivables turnover days Trade receivables turnover days increased from 193 days as of December 31, 2024, to 273 days for the period, primarily due to delayed settlements by some customers and reflecting the significant credit events disclosed in this report Trade Receivables Turnover Days Comparison | Metric | H1 2025 (days) | December 31, 2024 (days) | Change (days) | | :-------------------------- | :---------------- | :------------------- | :-------- | | Trade receivables turnover days | 273 | 193 | +80 | - Main reasons: Delayed settlements by some customers and reflecting the significant credit events disclosed in this report[120][124] Trade payables turnover days Trade payables turnover days for the period were 219 days, comparable to 205 days as of December 31, 2024 Trade Payables Turnover Days Comparison | Metric | H1 2025 (days) | December 31, 2024 (days) | Change (days) | | :------------------------- | :---------------- | :------------------- | :-------- | | Trade payables turnover days | 219 | 205 | +14 | Liquidity and financial resources As of June 30, 2025, the Group's current ratio decreased to 1.1 (December 31, 2024: 1.2), net borrowings increased to approximately RMB485.3 million (December 31, 2024: RMB172.5 million), and the net gearing ratio significantly rose to 57.2% (December 31, 2024: 17.9%), indicating increased liquidity pressure Liquidity and Financial Resources Comparison | Metric | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change | | :-------------------- | :----------------------- | :----------------------- | :----- | | Current ratio | 1.1 | 1.2 | -0.1 | | Net borrowings | 485.3 | 172.5 | +312.8 | | Cash and bank balances | 124.2 | 270.7 | -146.5 | | Pledged deposits | 211.3 | 511.0 | -299.7 | | Net gearing ratio | 57.2% | 17.9% | +39.3% | Earnings before interest, taxes, depreciation and amortisation (EBITDA) EBITDA for the period was approximately RMB-23.6 million (-2.3% of revenue), a significant decrease from approximately RMB4.2 million (0.3% of revenue) in H1 2024, primarily due to a gross loss and significant impairment losses on trade receivables and contract assets, largely offset by reduced administrative and selling expenses, lower finance costs, and reduced impairment of property, plant, and equipment EBITDA Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | | :------ | :----------------------- | :----------------------- | | EBITDA | -23.6 | 4.2 | | EBITDA (% of revenue) | -2.3% | 0.3% | - Main reasons: Gross loss and significant impairment losses on trade receivables and contract assets, largely offset by reduced administrative and selling expenses, lower finance costs, and reduced impairment of property, plant, and equipment[123][127] Net cash inflow/outflow from operating activities Net cash inflow from operating activities in H1 2025 was approximately RMB57.4 million, a significant improvement from a net cash outflow of approximately RMB121.7 million in H1 2024, primarily due to reduced demand for bank acceptance bills resulting from lower external shipments and successful recovery of pledged deposits Cash Flow from Operating Activities Comparison | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | | :------------------------------------ | :----------------------- | :----------------------- | | Net cash inflow/(outflow) from operating activities | 57.4 (inflow) | (121.7) (outflow) | - Main reasons: Decreased external shipments for the period led to reduced demand for bank acceptance bills, and successful recovery of pledged deposits[128][133] Foreign currency risk The Group primarily faces foreign exchange risks from USD and EUR, but directors expect exchange rate fluctuations not to have a significant impact as the Group achieves natural hedging by using foreign currency trade receivables to settle foreign currency loans and trade payables; future strategies will consider low-risk forward contract transactions to balance interest costs and exchange rate fluctuation risks - Principal foreign exchange risks: USD and EUR[129] - Risk mitigation: Natural hedging of exchange rates is achieved by using foreign currency trade receivables collected from foreign customers to settle foreign currency loans and trade payables[129] - Future strategy: Considering low-risk forward contract transactions for hedging to balance high/low interest costs and foreign currency exchange rate fluctuation risks[129] Significant investments, material acquisition or disposal of subsidiaries, associated companies and joint ventures For the six months ended June 30, 2025, the Group had no significant investments, material acquisitions, or disposals of subsidiaries, associated companies, and joint ventures - No significant investments, material acquisitions, or disposals of subsidiaries, associated companies, and joint ventures during the period[130][135] Human resources As of June 30, 2025, the Group's number of employees was 1,670, a decrease from 2,097 as of December 31, 2024 Employee Count Comparison | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------- | :----------- | :----------- | :--- | | Number of employees | 1,670 | 2,097 | -427 | Business Outlook Despite industry challenges like overcapacity and price wars, the PV sector has immense long-term growth potential driven by technological advancements, cost reductions, and government support; the Group will deepen strategic synergy and technological innovation, adapt to domestic and international markets, strengthen cooperation with leading central enterprises, accelerate R&D of new-generation high-efficiency module technologies, implement a "key customer + localization" overseas expansion strategy, and establish a comprehensive risk management system to navigate market fluctuations and seize energy transition opportunities - Industry challenges: Market supply-demand imbalance across the entire industry chain, with selling prices consistently below cost, leading to significant declines in financial performance for many enterprises[132][137] - Government intervention: The Chinese government has elevated "anti-involution" to a national strategic level, aiming to curb excessive internal competition and irrational price wars, and stabilize prices across the entire industry chain[138][141] - Market recovery: As PV inventory in regions like Europe is digested, demand in mainstream overseas PV markets is expected to gradually stabilize and grow in 2025; emerging markets such as the Middle East and Africa are rapidly expanding, becoming new growth drivers for the global PV market[140][142] - Group strategy (domestic market): Strengthening strategic cooperation with leading central enterprises and top customers in the distributed PV sector, accelerating research and mass production application of new-generation high-efficiency module technologies like busbar-less (0BB) and back-contact (BC), further promoting cost reduction and efficiency improvement through technology[144][147] - Group strategy (international market): Implementing a "key customer + localization" dual-driven approach, consolidating strategic cooperation with major overseas customers, accelerating the establishment of overseas sales networks, building localized overseas sales teams, and focusing on developing Southeast Asian and Central and Eastern European markets[144][147] - Risk management: Establishing a comprehensive risk system to address price fluctuations, policy, and technological risks, laying the foundation for industry supply-demand rebalancing and the release of technological dividends[144][147] Dividend The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil) - No interim dividend recommended for H1 2025[145][148] Events after the Reporting Period As of the date of this report, no other significant events affecting the Group have occurred since June 30, 2025 - No significant events recorded after the reporting period[146][149] Disclosure of Interests This section discloses the interests and short positions of the company's directors, chief executives, and substantial shareholders in the company's shares, underlying shares, and debentures as of June 30, 2025, in accordance with the Securities and Futures Ordinance Interests and Short Positions of the Directors and the Chief Executives of the Company in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of June 30, 2025, Mr. Tan Xin beneficially held 1.26% of the company's ordinary shares, and Mr. Wang Junze beneficially held less than 0.01% of the ordinary shares Directors' and Chief Executives' Shareholdings | Director's Name | Nature of Interest | Number of Ordinary Shares Held | Approximate Shareholding (%) | | :------- | :------- | :------------- | :--------------- | | Mr. Tan Xin | Beneficial interest | 41,762,000 (L) | 1.26% | | Mr. Wang Junze | Beneficial interest | 100,500 (L) | Less than 0.01% | Substantial Shareholders' and Other Persons' Interests and Short Positions' in Shares and Underlying Shares As of June 30, 2025, substantial shareholders included Mr. Tan Wenhua (totaling 21.43%), Hiramatsu International Corp. and its controller Hanako Hiramatsu (each holding 8.78%), and Ms. Shi Danhong and her spouse Mr. Dong Qingshi (each holding 5.48%) Substantial Shareholders' and Other Persons' Shareholdings | Name | Capacity | Number of Ordinary Shares Held | Approximate Shareholding (%) | | :----------- | :--------------- | :------------- | :--------------- | | Mr. Tan Wenhua | Beneficial interest | 556,924,443 (L) | 16.76% | | | Interest in controlled corporation | 155,320,308 (L) | 4.67% | | Hiramatsu International Corp. | Beneficial owner | 291,835,692 (L) | 8.78% | | Hanako Hiramatsu | Interest in controlled corporation | 291,835,692 (L) | 8.78% | | Ms. Shi Danhong | Beneficial interest | 182,290,000 (L) | 5.48% | | Mr. Dong Qingshi | Spouse's interest | 182,290,000 (L) | 5.48% | Corporate Governance and Other Information This section outlines the company's corporate governance practices, including compliance with the Corporate Governance Code (except for the combined roles of Chairman and CEO), remuneration policy, model code for directors' securities transactions, and the responsibilities of the audit committee, confirming no share schemes or listed securities transactions during the reporting period Corporate Governance The Company complied with the Corporate Governance Code in H1 2025, except for Code Provision C.2.1 (which stipulates that the roles of Chairman and Chief Executive should be separate); the Board believes that Mr. Tan Xin's dual role as Chairman and CEO helps maintain continuity of company policies and operational stability, ensuring shareholders' interests are fully represented under the Board's supervision - Compliance: The Company complied with the Corporate Governance Code in H1 2025, except for Code Provision C.2.1[162][165] - Combined roles of Chairman and CEO: Mr. Tan Xin has served as both Chairman and CEO of the Company since June 10, 2025[163][166] - The Board believes this arrangement helps maintain continuity of company policies and operational stability, and with a Board comprising two executive directors and three independent non-executive directors, shareholders' interests are fully and fairly represented[163][166] Emolument Policy The remuneration policy for the Group's employees is formulated by the Remuneration Committee based on their performance, qualifications, and capabilities, while directors' remuneration is determined by the Remuneration Committee with reference to the company's operating results, individual director performance, and comparable market statistics - Employee remuneration: Determined by the Remuneration Committee based on employee performance, qualifications, and capabilities[164][167] - Directors' remuneration: Determined by the Remuneration Committee with reference to the company's operating results, individual director performance, and comparable market statistics[164][168] Model Code for Securities Transactions by Directors The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules and confirms that all Directors complied with the said code for the six months ended June 30, 2025 - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules[169][173] - All Directors complied with the Model Code in H1 2025[169][173] Audit Committee The Company's Audit Committee, comprising three independent non-executive directors, has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters with management, including the review of the interim results for the six months ended June 30, 2025 - Audit Committee members: Composed of three independent non-executive directors[170][174] - Responsibilities: Reviewing the accounting principles and practices adopted by the Group, and discussing matters such as internal controls and financial reporting, including the review of H1 2025 interim results[170][174] Share Schemes The Company had no share schemes during the six months ended June 30, 2025 - The Company had no share schemes in H1 2025[171][175] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, and up to the date of this report, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities in H1 2025[172][176] Independent Review Report Ernst & Young conducted an independent review of the interim financial information for the six months ended June 30, 2025; the scope of the review is substantially less than an audit, but nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with IAS 34 and HKAS 34 - Reviewing firm: Ernst & Young[184] - Scope of review: Conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope substantially less than an audit[179][182] - Conclusion: Nothing has come to the attention of the reviewing firm that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with IAS 34 and HKAS 34[180][183] Interim Condensed Consolidated Statement of Profit or Loss This statement shows the Group recorded a loss for the period of RMB109.7 million in H1 2025, an increase from RMB101.7 million in H1 2024, primarily impacted by a shift from gross profit to gross loss and a significant increase in impairment of financial and contract assets, despite reductions in administrative and selling expenses Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :-------------------------------- | :----------------------- | :----------------------- | :--------- | | Revenue | 1,022,337 | 1,693,242 | -39.6% | | (Gross loss)/Gross profit | (8,807) | 21,965 | N/A | | Other income and gains, net | 41,438 | 94,350 | -56.1% | | Selling and distribution expenses, net | 12,272 (income) | (38,915) (expense) | N/A | | Administrative expenses | (81,930) | (102,761) | -20.3% | | Impairment of financial and contract assets | (39,815) | (271) | >+1000% | | Impairment of property, plant and equipment | (8,966) | (48,767) | -81.6% | | Finance costs | (22,308) | (31,355) | -29.0% | | Loss before tax | (108,116) | (105,754) | +2.2% | | Income tax (expense)/credit | (1,566) | 4,035 | N/A | | Loss for the period | (109,682) | (101,719) | +7.8% | | Loss attributable to owners of the parent | (109,117) | (101,147) | +7.9% | | Basic and diluted loss per share (RMB cents) | (3.28) | (3.04) | +7.9% | Interim Condensed Consolidated Statement of Comprehensive Loss This statement shows the Group's total comprehensive loss for H1 2025 was RMB114.5 million, an increase from RMB104.6 million in H1 2024, primarily comprising the loss for the period and other comprehensive loss from exchange differences on translating overseas operations and fair value changes of equity investments Key Data from Interim Condensed Consolidated Statement of Comprehensive Loss | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :------------------------------------ | :----------------------- | :----------------------- | :--------- | | Loss for the period | (109,682) | (101,719) | +7.8% | | Exchange differences on translating overseas operations (which may be reclassified to profit or loss subsequently) | (3,275) | (2,899) | +13.0% | | Exchange differences on translating overseas operations (which will not be reclassified to profit or loss subsequently) | (1,468) | – | N/A | | Fair value changes of equity investments measured at fair value through other comprehensive loss | (71) | – | N/A | | Total comprehensive loss for the period (after tax) | (114,496) | (104,618) | +9.4% | | Attributable to owners of the parent | (113,931) | (104,046) | +9.5% | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets decreased to RMB3,022.3 million (December 31, 2024: RMB3,983.0 million), primarily due to reductions in trade and bills receivables, pledged deposits, and cash and cash equivalents; total liabilities also decreased, but both net current assets and total equity declined, leading to an increased net gearing ratio Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :-------------------------------- | :----------------------- | :----------------------- | :--------- | | Total non-current assets | 788,733 | 795,839 | -0.9% | | Inventories | 366,752 | 376,852 | -2.7% | | Trade and bills receivables | 1,206,104 | 1,652,443 | -27.0% | | Contract assets | 116,411 | 129,726 | -10.3% | | Pledged deposits | 211,253 | 510,979 | -58.7% | | Cash and cash equivalents | 124,249 | 270,699 | -54.1% | | Total current assets | 2,233,521 | 3,187,190 | -29.9% | | Total current liabilities | 1,951,135 | 2,748,573 | -29.1% | | Net current assets | 282,386 | 438,617 | -35.6% | | Total non-current liabilities | 223,183 | 272,024 | -18.0% | | Net assets | 847,936 | 962,432 | -11.9% | | Total equity | 847,936 | 962,432 | -11.9% | Interim Condensed Consolidated Statement of Changes in Equity This statement shows that as of June 30, 2025, total equity attributable to owners of the parent decreased from RMB944.9 million on January 1, 2025, to RMB831.0 million, primarily due to the loss for the period and changes in exchange reserves and other reserves Key Data from Interim Condensed Consolidated Statement of Changes in Equity | Metric | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | Change (RMB thousands) | | :------------------------------------ | :----------------------- | :----------------------- | :--------------- | | Total equity attributable to owners of the parent | 944,916 | 830,985 | (113,931) | | Loss for the period | (109,117) | (109,117) | 0 | | Other comprehensive loss for the period (fair value changes of equity investments) | – | (71) | (71) | | Other comprehensive loss for the period (exchange differences on translating overseas operations) | – | (4,743) | (4,743) | | Total comprehensive loss | (113,931) | (113,931) | 0 | Interim Condensed Consolidated Statement of Cash Flows This statement shows the Group generated a net cash inflow of RMB57.4 million from operating activities in H1 2025, a significant improvement from a net cash outflow in H1 2024; net cash used in investing activities decreased, and net cash used in financing activities also decreased, ultimately leading to a net decrease in cash and cash equivalents of RMB147.2 million Key Data from Interim Condensed Consolidated Statement of Cash Flows | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :------------------------------------ | :----------------------- | :----------------------- | | Net cash inflow/(outflow) from operating activities | 57,405 (inflow) | (121,717) (outflow) | | Net cash used in investing activities | (44,973) | (82,108) | | Net cash used in financing activities | (159,602) | (175,827) | | Net decrease in cash and cash equivalents | (147,170) | (379,652) | | Cash and cash equivalents at January 1 | 270,699 | 578,364 | | Cash and cash equivalents at June 30 | 124,249 | 198,666 | - In January 2025, the Group disposed of its entire equity interest in Yunxian Yunguang Energy Co., Ltd., a subsidiary, for nil consideration, recording a gain of RMB88,000 and a net cash outflow from investing activities of RMB1,000[191][192] Notes to Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering corporate information, accounting policies, operating segments, revenue breakdown, other income and gains, finance costs, income tax, loss per share, property plant and equipment, inventories, trade and other receivables/payables, deferred income, warranty provisions, share capital and dividends, capital commitments, material related party transactions, and fair value measurement of financial instruments 1 Corporate Information Solargiga Energy Holdings Limited is a downstream vertically integrated solar service provider, primarily engaged in the manufacturing and trading of PV modules, construction and operation of PV power plants, and manufacturing and trading of semiconductors and others - Core businesses: Manufacturing and trading of PV modules; construction and operation of PV power plants; manufacturing and trading of semiconductors and others[193][197] 2 Basis of Preparation and Changes in Accounting Policies and Disclosures The interim condensed consolidated financial information for the six months ended June 30, 2025, has been prepared in accordance with IAS 34 and HKAS 34; accounting policies are consistent with those adopted in the 2024 annual consolidated financial statements, and the newly revised IAS 21/HKAS 21 has no significant impact on the financial position or performance for the period - Basis of preparation: Prepared in accordance with IAS 34 "Interim Financial Reporting" and HKAS 34 "Interim Financial Reporting"[193][197] - Accounting policies: Consistent with those adopted in the 2024 annual consolidated financial statements[193][197] - Impact of amendments: Amendments to IAS 21/HKAS 21 "Lack of Exchangeability" had no impact on the Group's financial position or performance for the period[194][196] 3 Operating Reporting The Group identifies three reportable segments: manufacturing and trading of PV modules (Segment A), construction and operation of PV power plants (Segment B), and manufacturing and trading of semiconductors and others (Segment C); in H1 2025, all segments recorded losses, with Segment A having the highest external sales but a significant year-on-year decrease, and Mainland China remaining the primary market despite a substantial reduction in export sales - Reportable segments: Segment A (manufacturing and trading of PV modules), Segment B (construction and operation of PV power plants), Segment C (manufacturing and trading of semiconductors and others)[198][201] Revenue from External Customers (by Segment) | Segment | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :----------------------- | :----------------------- | :--------- | | Segment A | 978,957 | 1,632,925 | -40.1% | | Segment B | 22,756 | 36,341 | -37.4% | | Segment C | 20,624 | 23,976 | -14.0% | | Total | 1,022,337 | 1,693,242 | -39.6% | Reportable Segment (Loss)/Profit | Segment | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :----------------------- | :----------------------- | | Segment A | (90,128) | (112,209) | | Segment B | (6,986) | (13,448) | | Segment C | (12,568) | 23,938 | | Total | (109,682) | (101,719) | Revenue from External Customers (by Geographical Location) | Region | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :------------------------ | :----------------------- | :----------------------- | :--------- | | Mainland China | 873,310 | 1,375,824 | -36.6% | | Export sales (subtotal) | 149,027 | 317,418 | -53.1% | | - Japan | 135,777 | 186,444 | -27.2% | | - Asia (excluding Japan) | 12,168 | 20,809 | -41.5% | | - Europe | – | 109,770 | -100% | | - Others | 1,082 | 395 | +173.9% | | Total | 1,022,337 | 1,693,242 | -39.6% | 4 Revenue The Group's total revenue for H1 2025 was RMB1,022.3 million, a year-on-year decrease of 39.6%; manufacturing and trading of PV modules remained the primary revenue source, but its revenue significantly decreased, while processing services emerged as a new revenue category Revenue Analysis (by Business Type) | Revenue Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :------------------------------------ | :----------------------- | :----------------------- | :--------- | | Manufacturing and trading of PV modules | 943,994 | 1,632,925 | -42.2% | | Processing services | 34,963 | – | N/A | | Construction and operation of PV power plants | 22,756 | 36,341 | -37.4% | | Manufacturing and trading of semiconductors and others | 20,624 | 23,976 | -14.0% | | Total | 1,022,337 | 1,693,242 | -39.6% | Revenue from Customer Contracts (by Time of Revenue Recognition) | Time of Revenue Recognition | H1 2025 (RMB thousands) | | :-------------------------- | :--------------- | | Goods transferred at a point in time | 973,734 | | Services transferred over time | 48,603 | 5 Other Income and Gains, Net Net other income and gains for H1 2025 were RMB41.4 million, a 56.1% decrease from RMB94.4 million in H1 2024, primarily due to a significant reduction in government subsidies and a shift from gain to loss on disposal of property, plant and equipment, partially offset by an increase in net foreign exchange gains Other Income and Gains, Net Comparison | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :------------------------------------ | :----------------------- | :----------------------- | :--------- | | Government subsidies | 21,746 | 48,839 | -55.5% | | Interest income from bank deposits | 4,871 | 7,388 | -34.1% | | Net foreign exchange gains | 10,750 | 2,270 | +373.6% | | (Loss)/gain on disposal of property, plant and equipment | (334) | 19,340 | N/A | | Others (including trade receivables written off in prior years) | 3,340 | 15,723 | -78.7% | | Total | 41,438 | 94,350 | -56.1% | 6 Finance costs Finance costs decreased by 29.0% from RMB31.4 million in H1 2024 to RMB22.3 million in H1 2025, primarily due to reduced interest on bank and other borrowings Finance Costs Comparison | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :-------------------------- | :----------------------- | :----------------------- | :--------- | | Interest on bank and other borrowings | 20,900 | 30,499 | -31.4% | | Interest on lease liabilities | 1,408 | 856 | +64.5% | | Total | 22,308 | 31,355 | -29.0% | 7 Loss Before Tax The Group's loss before tax for H1 2025 was RMB108.1 million, a slight increase from RMB105.8 million in H1 2024, impacted by reduced salaries, wages, and other benefits, and depreciation of property, plant and equipment, but significantly affected by a substantial increase in impairment of trade receivables and contract assets, and a shift from gain to loss on disposal of property, plant and equipment Components of Loss Before Tax Comparison | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :------------------------------------ | :----------------------- | :----------------------- | :--------- | | Salaries, wages and other benefits | 88,273 | 122,207 | -27.7% | | Depreciation of right-of-use assets | 6,647 | 3,791 | +75.3% | | Depreciation of property, plant and equipment | 55,568 | 74,843 | -25.7% | | Write-down of inventories | 1,324 | 12,487 | -89.4% | | Research and development costs | 8,042 | 9,564 | -15.9% | | Reversal of provision for warranty costs | (36,009) | (4,769) | +655.1% | | Impairment of trade receivables and contract assets | 39,815 | 271 | >+1000% | | Impairment of property, plant and equipment | 8,966 | 48,767 | -81.6% | | Loss/(gain) on disposal of property, plant and equipment | 334 | (19,340) | N/A | | Loss/(gain) on disposal of an associate | 102 | (53) | N/A | | Gain on disposal of a subsidiary | (88) | – | N/A | | Cost of inventories sold | 978,034 | 1,652,733 | -40.8% | | Cost of services provided | 53,110 | 18,544 | +186.4% | 8 Income Tax Expense/(Credit) The Group recorded an income tax expense of RMB1.6 million in H1 2025, compared to an income tax credit of RMB4.0 million in H1 2024, primarily due to the reversal of deferred tax assets; Chinese subsidiaries benefit from a 15% preferential tax rate for high-tech enterprises and income tax reductions for public infrastructure projects; the Group is assessing the potential impact of Hong Kong's Pillar Two minimum tax legislation on its financial statements Income Tax Expense/(Credit) Comparison | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :-------------------------- | :----------------------- | :----------------------- | | Current tax – China | 329 | 7,356 | | Deferred tax | 1,237 | (11,391) | | Income tax expense/(credit) | 1,566 (expense) | (4,035) (credit) | - China tax incentives: Jinzhou Yangguang, Jiangsu Yueyang, and Boxinco obtained "High-tech Enterprise" qualifications, applying a 15% income tax rate; Jiangsu Zhiding's PV system construction projects qualify for income tax reduction for public infrastructure projects, enjoying a halved corporate income tax preferential period[225][226][227][228][229][231][232] - Pillar Two minimum tax: The Hong Kong SAR has passed relevant legislation, with the Income Inclusion Rule (IIR) and Hong Kong Minimum Top-up Tax (HKMTT) effective retrospectively; the Group is assessing potential risks[232] 9 Basic and Diluted Loss per Share Attributable to Ordinary Equity Holders of the Parent Basic and diluted loss per share attributable to ordinary equity holders of the parent for H1 2025 was RMB3.28 cents, an increase from RMB3.04 cents in H1 2024; the calculation is based on a weighted average of 3,323,771,133 ordinary shares, and the Company had no potentially dilutive ordinary shares outstanding during the period - Basic loss per share: RMB3.28 cents in H1 2025 (H1 2024: RMB3.04 cents)[233][241] - Weighted average number of shares: 3,323,771,133 ordinary shares[233][241] - Diluted loss per share: The Company had no potentially dilutive ordinary shares outstanding during the period[233][241] 10 Property, Plant and Equipment The total cost of additions to property, plant and equipment for the Group in H1 2025 was RMB58.3 million (H1 2024: RMB101.2 million); an impairment of RMB8.97 million was recognized due to certain plant in Segment C being temporarily idle during the period, with the recoverable amount determined based on fair value less costs of disposal - Cost of additions: RMB58,259,000 in H1 2025 (H1 2024: RMB101,198,000)[234][238] - Impairment loss: An impairment of RMB8,966,000 was recognized in H1 2025 due to certain plant in Segment C being temporarily idle during the period[235][238] 11 Inventories As of June 30, 2025, total inventories were RMB366.8 million, a slight decrease from RMB376.9 million as of December 31, 2024, primarily due to a reduction in materials and supplies, while finished goods increased Inventory Composition Comparison | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :---------------- | :----------------------- | :----------------------- | :--------- | | Materials and supplies | 43,728 | 87,465 | -50.0% | | Finished goods | 323,024 | 289,387 | +11.6% | | Total | 366,752 | 376,852 | -2.7% | 12 Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables were RMB1,206.1 million, a 27.0% decrease from RMB1,652.4 million as of December 31, 2024; impairment provisions significantly increased to RMB82.0 million, primarily due to a full provisio