After a strong rally featuring two limit-up gains in four trading days, the stock price of photovoltaic company Shuangliang Eco-Energy Systems Co.,Ltd. (Shuangliang Eco-Energy, 600481.SH) continued its upward trend. As of the market close on May 20th, the company's stock price was reported at 7.32 yuan per share, rising 1.53% for the day and accumulating a gain of 15.64% over the past five trading days. However, the backdrop for this rebound is far from optimistic. In late April this year, the company disclosed its 2025 annual report, revealing multiple operational risks including a sharp decline in performance, high liabilities, and tight cash flow. The stock price had once dropped to a yearly low of 5.91 yuan per share, making this current rise the first significant rebound since that low. To understand the drivers behind the stock price increase, inquiries were sent to the company's official email. No response had been received prior to publication.
Shuangliang Eco-Energy's development can be traced back to 1982, starting with lithium bromide refrigeration units. In 1985, its predecessor, the Jiangyin Lithium Bromide Refrigeration Machinery Factory, was established, producing China's first such chiller and later participating in setting national and industry standards for these units. The company was listed on the Shanghai Stock Exchange in 2003 and for many years thereafter, it focused on developing energy-saving technologies.
Polysilicon reduction reactors are core equipment for producing polysilicon materials. Information shows that Shuangliang Eco-Energy entered the new energy business early. In 2015, the company acquired an 85% stake in Shuangliang New Energy through an asset swap, integrating the polysilicon reduction reactor business into the listed entity.
The company's true takeoff began during the 2021 photovoltaic industry boom. With rapid growth in end-user installations and leading polysilicon manufacturers launching capacity expansion projects, Shuangliang leveraged its polysilicon reactors to enter the upstream PV sector. From 2020 to 2022, the company secured high-speed order growth for three consecutive years, capturing over 65% market share.
However, Shuangliang was no longer content with just being a supplier. It expanded downstream. In 2021, it established subsidiary Shuangliang Silicon Materials (Baotou) Co., Ltd., investing 7 billion yuan to build projects including a 20GW large-size monocrystalline silicon wafer facility. In 2022, it further increased investments in monocrystalline silicon wafers and crystal pulling projects, with additional amounts exceeding 16 billion yuan.
Furthermore, Shuangliang entered the photovoltaic module business by setting up Shuangliang New Energy Technology (Baotou) Co., Ltd., initiating large-scale module project investment, construction, and production in the Baotou region. The first phase, with 5GW capacity, was completed and began sales in 2022.
At that time, benefiting from the high-growth PV industry, Shuangliang's operating revenue surged from 2.072 billion yuan in 2020 to 23.149 billion yuan in 2023, while its net profit attributable to shareholders rose from 137 million yuan to 1.502 billion yuan in 2023, a more than tenfold increase.
However, the very factor that led to its success also contributed to its downturn. Following severe industry overcapacity and a cliff-like price drop after 2023, Shuangliang's aggressive expansion strategy was severely impacted. In 2024, the company reported a massive net loss attributable to shareholders of 2.141 billion yuan, with revenue shrinking to 13.038 billion yuan. Entering 2025, the situation did not improve. Performance remained under pressure, with revenue further contracting to 7.565 billion yuan and a net loss attributable to shareholders of 1.116 billion yuan, nearly wiping out all profits from previous years.
Currently, Shuangliang's main business revenue comprises three segments: energy-saving and water-saving equipment, new energy equipment, and photovoltaic products. The new energy equipment segment primarily includes polysilicon reduction reactors and related modules, as well as green hydrogen production equipment. Photovoltaic products consist of large-size monocrystalline silicon ingots, wafers, and high-efficiency PV modules. All segments are under significant pressure.
In 2025, the new energy equipment business suffered the most severe blow, with revenue plummeting 89.61% year-over-year to 98.3554 million yuan. Its gross margin plunged 21.02 percentage points to 14.35%. Revenue from photovoltaic products was halved year-over-year to 4.42 billion yuan, with the segment reporting the lowest gross margin at -10.79%.
Product sales figures were even more dismal. According to the annual report, in 2025, Shuangliang sold 544MW of modules, down 73.21% year-over-year. It sold only 13 units of new energy equipment, a decrease of 96.21%. Sales of energy-saving/water-saving equipment and monocrystalline silicon wafers also declined year-over-year, to 934 units and 4.9013 billion pieces, down 21.05% and 9.13% respectively. At its peak in 2022, Shuangliang sold 1,127 polysilicon reduction reactor units.
Regarding the revenue decline in 2025, Shuangliang's annual report stated it was primarily due to reduced sales of polysilicon reduction reactors and photovoltaic products, impacted by industry conditions. The past glory has faded.
For the first quarter of 2026, Shuangliang reported a loss of 394 million yuan, a year-over-year decline of 144.6%. The company attributed this mainly to losses in its photovoltaic-related businesses.
The cost of aggressive expansion is becoming increasingly apparent, as Shuangliang's monetary funds continue to shrink. Financial reports show monetary funds were 6.081 billion yuan at the end of 2024, declining to 4.109 billion yuan by the end of 2025, and further dropping to only 2.755 billion yuan by the end of Q1 2026, indicating a continuous tightening of liquidity. This directly reflects that the company may be facing a cash flow crunch during this period. This situation is typically related to factors such as expanded investment, debt repayment, or rising operational costs. Specifically, if Shuangliang engaged in large-scale capital expenditures or faced significant financial pressure during this time, the reduction in monetary funds is understandable. However, it also signals that investors and management need to focus on the company's cash flow management to ensure sufficient liquidity supports daily operations and future investment plans.
Simultaneously, Shuangliang's leverage ratio has surged significantly, with debt risks accumulating notably. Before 2021, the company's asset-liability ratio was around 40%. In 2021, it exceeded 70%, and for both 2024 and 2025, the ratio remained above 80%. By the end of Q1 2026, the asset-liability ratio stood at 80.67%. More critically, the company's short-term borrowings reached 6.551 billion yuan, far exceeding its monetary funds for the same period, indicating a significant short-term debt repayment gap. This confirms the company indeed faces liquidity risk. A high asset-liability ratio means the company relies heavily on debt financing for operations, while short-term borrowings significantly exceeding monetary funds indicate substantial pressure to repay debt in the near term. If the company cannot promptly adjust its debt structure or increase cash flow, it will face the risk of debt repayment difficulties, which could even lead to a credit rating downgrade, affecting its ability to secure further financing. Therefore, for Shuangliang, it is crucial to take effective measures to improve cash flow and optimize its capital structure to reduce financial risk. Simultaneously, strengthening internal management and enhancing operational efficiency are key to alleviating the current predicament.
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