Text: Huaxia Energy Network

Huaxia Energy Network & Huaxia Photovoltaic learned that on the evening of December 24, silicon giant Xinte Energy (HK: 01799) announced that the company decided to terminate the issuance of A shares and submitted an application to the Shanghai Stock Exchange to withdraw the proposed issuance of A shares, which has been approved by the Shanghai Stock Exchange.

On the same day, TBEA (SH: 600089), the controlling shareholder of Xinte Energy, also said through an announcement that Xinte Energy made the decision to terminate the issuance and listing of A-shares based on the current industry situation and its own actual situation.

From the planning of the A-share listing at the beginning of 2021 to the withdrawal of the issuance application, it not only means that Xinte Energy's four-year efforts have been in vain, but also means that after its loss of 1.4 billion yuan, a door to financing and blood transfusion has been closed.

After four years of planning, the dream of "returning to A" was shattered

In China, Xinte Energy, Tongwei (SH: 600438), GCL Technology (HK: 03800) and Daqo Energy (SH: 688303) are known as the four leading polysilicon companies, and their main business is the R&D, production and sales of high-purity polysilicon, as well as the construction and operation of wind energy and photovoltaic power plants, and was listed on the Hong Kong Stock Exchange in December 2015.

At the end of 2020, polysilicon prices began to rise wildly, and Xinte Energy also had the idea of expanding production capacity. In January 2021, Xinte Energy disclosed its plan to be listed on the A-share market and began to prepare for the road of "returning to A", hoping to further open up financing channels and expand production capacity through the dual listing of "A+H".

In March 2022, the board of directors of Xinte Energy deliberated and approved the A-share issuance plan, which was soon accepted by the Shanghai Stock Exchange. In September 2023, Xinte Energy's IPO on the main board was deliberated and approved by the Listing Review Committee of the Shanghai Stock Exchange.

At that time, Xinte Energy's "return to A" road was smooth, and many institutions also had extremely high expectations for Xinte Energy's "return to A", and it is expected that it will be listed by the end of 2023 after a successful meeting.

However, just when the market was unanimously optimistic, Xinte Energy replied to the SSE's inquiry in December 2023, and there was no dynamic update.

Until December 24 this year, Xinte Energy withdrew its IPO announcement, announcing that the dream of "returning to A" was completely shattered.

From profit to loss, Xinte Energy began to lose blood

In March 2022, while disclosing the A-share listing plan, Xinte Energy also disclosed a fundraising plan: it plans to raise 8.8 billion yuan and plans to build a green and low-carbon circular economy construction project with an annual output of 200,000 tons of high-end electronic-grade polysilicon, which will be constructed in two phases.

At present, the first phase of the 100,000-ton project has been completed and put into operation in August 2023, and the second phase of the project has not progressed.

It is worth noting that the first phase of the project uses Xinte Energy's own funds, which undoubtedly poses operational risks to Xinte Energy. The termination of the "Back to A" plan has closed an important financing door for Xinte Energy.

Not only that, the closure of the financing door is even worse for Xinte Energy, which is already in a state of loss at this time.

2022 is a special year for polysilicon companies, in which polysilicon prices have experienced huge increases and have also brought extremely high returns to listed companies: Tongwei Co., Ltd., GCL Technology, Daqo Energy and Xinte Energy have a total annual profit of 74.1 billion yuan, with the net profit of the first three companies increasing by more than 220% year-on-year, and Xinte Energy increasing by 168% year-on-year.

But in the last two months of 2022, polysilicon prices began to "avalanche", falling by more than 20%. Entering 2023, although polysilicon prices have risen in the short term, they are still in a sharp decline, falling by more than 75% this year.

As

a result, in 2023, the performance of polysilicon companies will suddenly fall to a waterloo, and the "good days" will come to an end, with Xinte Energy's net profit falling by 67%. Entering 2024, the entire photovoltaic industry chain fell below the cash flow, and Xinte Energy also turned from profit to loss, with a net loss of 1.4 billion yuan in the first three quarters.

Not long ago, TBEA transferred 49% of the equity of the indirectly controlled grandson company Zhundong Energy to Xinte Energy at a transfer price of 1.508 billion yuan.

The production cut is imminent, and the profit defense war is started

It is worth noting that while the price of photovoltaic polysilicon has been soaring, polysilicon manufacturers have also begun to accelerate the expansion of production capacity, resulting in a surge in polysilicon production. However, with the slowdown in the growth of terminal PV installations, there is an imbalance between supply and demand, and there is serious overcapacity, which affects the profits of polysilicon manufacturers. How to enhance profitability has become a top priority for polysilicon manufacturers, including Xinte Energy.

Recently, Tongwei Co., Ltd. and Daqo Energy announced a plan to reduce production and control production. Both companies believe that maintenance and production reductions will help reduce operating losses.

On December 24, Tongwei Co., Ltd. revealed that its Yongxiang Co., Ltd. gradually arranged its four high-purity crystalline silicon production companies to carry out technical transformation and maintenance work according to the overall production and operation plan, and reduce production in a phased and orderly manner.

Daqo Energy also said in the announcement that it will gradually start the phased maintenance of high-purity polysilicon production lines in Xinjiang and Inner Mongolia production bases, and carry out orderly production reduction and production control for some production lines.

According to public information, by the end of 2024, the polysilicon production capacity of Tongwei Co., Ltd., GCL Technology, Daqo Energy and Xinte Energy will be 900,000 tons, 500,000 tons, 305,000 tons and 300,000 tons, respectively.

According to recent news, GCL Technology and Xinte Energy have also begun to control production and reduce production, but there is no announcement yet. This trend will have an important impact on the improvement of the relationship between polysilicon supply and demand, and also provide support for polysilicon companies such as Xinte Energy to improve their performance.