(Yicai) Aug. 17 -- Shares in Hunan Huamin Holdings[SHE:300345] climbed as much as 3 percent this morning after the newcomer of the photovoltaic industry announced that its joint-venture photovoltaic wafer plant, which is schemed to start operation at the end of this year, has already secured the long-term order worth CNY5.5 billion (USD754 million). 

The stock failed to sustain the gain and closed down 0.38 percent at CNY10.41(USD1.42) today. 

Honghui New Energy(Anhui), a subsidiary in which Hunan Huamin owns a 70 percent stake, has inked the framework agreement with Anhui Huasun Energy, who is also a minority owner of Honghui, to supply the latter with solar wafers that are specifically designed to make the advanced high-efficiency N-type heterojunction solar cells for three years starting this November, said the central Hunan province-based supplier of metallic wear-resistant materials in a statement released yesterday evening.

The deal accounts for 15 gigawatts of such solar wafers, about 5 gigawatts each year, according to the announcement. 

The actual selling price of the product will be negotiated on a monthly basis, the statement explained, adding that the signing of the contract will collectively bring sales revenues worth about CNY5.5 billion (USD754 million) to Honghui New Energy based on the current market price. 

The HJT solar cell is one of the highly-efficient solar batteries with a higher photoelectric conversion rate. Against the backdrop of the entire sector’s overcapacity reality, the new product should provide Hunan Huamin with the advantage of being a latecomer, as its product’s competitiveness is quite obvious. In fact, Hunan Huamin had already inked two wafer contracts with two other customers last month, with a combined worth of about CNY420 million (USD57.5 million). 

The growth potential is huge, as the newly developed high-efficiency solar cells, including HJT cells, just accounted for less than 3 percent of China's total PV cell production capacity in 2021, but that share is expected to reach 40 percent by 2025 and more than 75 percent by 2030, according to data from the China Photovoltaic Industry Association.

On the other hand, despite as a newcomer in the solar industry, Hunan Huamin’s solar wafer business has also obtained strong support from client and partner Anhui Huasun Energy. Huasun, which holds 20 percent stake in Honghui New Energy, not only secures half of the products the JV plant will make, it also provided it with proprietary technology and operation assistance, per the statement. 

Partner Huasun’s official website shows that the company is currently the world’s biggest supplier of HJT solar cells and panels with an annual production capacity of about 8.1 gigawatts, the joint venture plant in Xuancheng, eastern Anhui province is currently under construction and is expected to kick off operation this November, according to the announcement.