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. (hereinafter referred to as “Lihao Qingneng”) held by 57 shareholders, including Duan Yong, Hainan Zhuoyue, and Hainan Haoyue, through issuing shares and paying cash, 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 share capital 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 silicon wafers, as well as related new energy businesses. High-purity silicon is a core raw material for silicon 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 Lihao Qingneng’s unaudited financial data for the past two years. In 2024 and 2025, Lihao Qingneng’s operating revenues are 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. 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 the high-purity silicon segment. Additionally, Lihao Qingneng has a competitive advantage in green, traceable high-purity 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 capacities exceeding 3 million tons for silicon materials and over 1,000 GW for various segments. However, current market demand remains insufficient. In the future, if downstream terminal installation demand slows down or declines, the target company may face prolonged capacity supply and demand imbalance, which could impact its profitability recovery.

(Company Announcement)