Huamin Shares: Navigating the Solar Transition Amid 20 Billion Yuan Backlog and Improving Q1 Performance

April 25 - Huamin Shares (300345) released its 2024 annual report and Q1 2025 financial results.

The annual report shows the company achieved revenue of 1.032 billion yuan, a year-on-year decrease of 12.17%. Net profit attributable to shareholders posted a loss of 298 million yuan, declining 50.14% year-on-year, while non-recurring adjusted net profit recorded a loss of 304 million yuan, dropping 51.76% year-on-year - further expanding the company's loss margin.

For Q1 2025, the company reported revenue of 240 million yuan, a 4.09% year-on-year increase. Net profit attributable to shareholders showed a loss of 33.06 million yuan, narrowing the loss by 29.80% year-on-year, while non-recurring adjusted net profit recorded a loss of 38.09 million yuan, narrowing by 20.49% year-on-year. The gross profit margin turned positive, signaling a potential performance inflection point.

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01

Transformation Growing Pains Despite Over 20 Billion Yuan in Orders

In 2024, the photovoltaic industry underwent a deep adjustment with dramatic price drops across the supply chain coupled with accelerated technological iteration, as P-type products rapidly transitioned to N-type, plunging the entire industry into losses.

As a newcomer to the photovoltaic sector, Huamin Shares, despite holding silicon wafer orders exceeding 20 billion yuan, experienced expanded losses due to high costs during the production capacity ramp-up period, depressed silicon wafer prices, and impairment pressure from aging production capacity.

Additionally, the company's accounts receivable surged to 157 million yuan, up from 132 million yuan the previous year, highlighting cash flow pressure and raising questions about fulfillment capabilities.

In Q1 2025, the company's performance improved due to optimized industry supply-demand dynamics. As upstream photovoltaic product prices rebounded from bottom levels, Huamin's N-type silicon wafer production capacity in Dali, Yunnan and Xuancheng, Anhui gradually increased without the burden of outdated capacity, successfully turning the gross profit margin positive.

However, the period-end cash and cash equivalents balance decreased to 72.2455 million yuan, a reduction of 117 million yuan compared to the end of 2024; the current asset-liability ratio climbed to 85.37%. The company faces significant pressure in cash flow management and debt levels.

Notably, recent management adjustments have injected momentum into the transformation. In early December last year, industry veteran Zhou Dan was appointed as company president. Zhou previously led Tongwei Solar's cell business to global leadership, and his strategic vision and execution capabilities have attracted market attention.

02

Aggressive Expansion into Photovoltaics Raises Fulfillment Concerns

According to records, Hunan Huamin Holding Group (referred to as "Huamin Shares") was established in 1995 with a registered capital of 578 million yuan, with Ouyang Shaohong as the actual controller. The company was listed on the Shenzhen Stock Exchange ChiNext board in 2012 under stock code 300345.

Since entering the photovoltaic sector in 2022, Huamin Shares has rapidly deployed silicon rod and wafer production capacity through acquisitions of Hongxin Technology, Honghui New Energy, and other entities. Currently, the company's Dali, Yunnan base with 20GW silicon rod and 14GW silicon wafer projects is fully operational, while phase one of the Xuancheng, Anhui 10GW heterojunction (HJT) specialized silicon wafer project has entered mass production ramp-up.

To further enhance market competitiveness, the company has established joint ventures with HJT cell leader Huashi New Energy, photovoltaic equipment supplier Yujing Shares, and others to integrate upstream and downstream resources, aiming to become a leading enterprise in HJT specialized silicon wafers.

However, significant risks lurk behind this aggressive expansion. As of 2024, photovoltaic business revenue accounted for over 85% of the company's total, but related technologies primarily rely on external licensing, raising questions about its independent innovation capabilities. Furthermore, despite signing orders worth 20 billion yuan in 2023, the company's production capacity implementation has failed to keep pace, further intensifying market concerns about its fulfillment capabilities.

03

Termination of 1.36 Billion Wafer Deal with Yidao New Energy

On April 26, Huamin Shares announced that due to supply-demand imbalances and capacity mismatches, photovoltaic industry chain product prices continued to fall, causing serious losses across the industry, accelerating capacity reduction, with expansion plans being terminated or delayed, and reduced factory utilization rates. Against this backdrop, Huamin Shares and Yidao New Energy's long-term silicon wafer sales contract progressed slowly, and both parties agreed to terminate the original contract after consultation, while maintaining a friendly cooperative relationship to explore future collaboration opportunities.

The original contract involved a sales framework agreement for approximately 1.36 billion silicon wafers, with only 26.17 million yuan fulfilled as of the end of March 2025.

Meanwhile, Huamin Shares is actively fulfilling long-term contracts with Chint New Energy, Tongwei New Energy, and Huashi New Energy, and plans to expand product offerings and business cooperation models. However, given the lengthy remaining fulfillment period and unresolved market conditions including slowed photovoltaic industry growth and supply-demand imbalances, risks remain that contracts may not be fulfilled on schedule, completely, or may be suspended.

Although specific reasons weren't disclosed in detail, industry analysts speculate that product positioning mismatches and technical standard disagreements may be involved, similar to the previously terminated 50 million wafer framework agreement in 2023. Such order terminations not only affect short-term revenue but also expose the company's weaknesses in technology integration and customer need responsiveness.

Huamin Shares stated that this decision was reached by mutual agreement based on market conditions and both parties' operational situations, and will not significantly adversely impact the company's financial position or silicon wafer business. The company currently has sufficient orders and will actively promote the successful implementation of other contracts while increasing efforts to develop overseas markets to enhance market competitiveness.

It should be noted that as the photovoltaic industry accelerates capacity clearing, companies with advanced production capacity and efficient management capabilities are poised to break through.

If Huamin Shares can seize the window of opportunity for HJT technology iteration, strengthen its production capacity, and improve cash generation capability, it may potentially reverse its current loss situation. However, whether the company can ultimately navigate through the industry cycle through strategic adjustments and resource integration requires further validation over time.