Six years ago, investors bestowed upon Longi Green Energy the nickname "the Moutai of photovoltaics." It was a golden era for the company. On November 1, 2021, its share price peaked at 73 yuan, pushing its market value to 550 billion yuan and ranking it among the top 20 in the A-share market. Shareholders who bought Longi that year now see less than 20% of their initial investment remaining in their accounts today.
Longi's 2026 semi-annual report paints a grim picture: revenue of 27.045 billion yuan and a net loss attributable to shareholders of 3.684 billion yuan. Adding this to the losses of 8.618 billion yuan in 2024 and 6.42 billion yuan in 2025, the company has bled 18.7 billion yuan in just two and a half years—exceeding even its best full-year profit of 14.8 billion yuan in 2022. The question that begs asking is: how can a company that looks so fundamentally sound lose so much money?
Longi was once the undisputed leader of the solar industry, with cutting-edge technology, solid financials, and a founder who preached long-termism. Even the most discerning investor, Hillhouse Capital, had made a heavyweight bet on it, calling it "a friend of time." The popular explanation for its downfall is simple: industry winter. Everyone is losing money; Longi simply didn't escape the storm. This explanation, however, is only half the story. The other half lies in the words written by Longi's own chairman, Zhong Baoshen.
When the Wind Was at Its Back
To understand how Longi lost its fortune, we must first understand how it won. In 2000, Li Zhenguo, a physics graduate from Lanzhou University, founded the company's predecessor in Xi'an. The company was later renamed "Longi" to honor Jiang Longji, a former Lanzhou University president who led the institution through its "golden era" from 1959 to 1966. A solar company carrying the legacy of a university's history set its tone from day one: faith in technology and an intellectual's ambition.
Longi's corporate history is remarkably straightforward—over a decade, it focused on a single monumental bet: monocrystalline silicon. Around 2015, polysilicon wafers dominated the market—cheap, abundant, everywhere. Longi, still a modest player, dared to stake its entire future on the costlier monocrystalline route, pairing it with self-developed diamond wire cutting technology to squeeze out costs. The logic was simple: monocrystalline offered a higher efficiency ceiling, and solar is ultimately a business of cost per kilowatt-hour. Efficiency is everything.
Within a few years, monocrystalline replaced polysilicon as the industry standard. Longi's gamble paid off spectacularly, transforming it from a fringe player into the world's largest monocrystalline wafer manufacturer. In 2014, it moved further downstream by acquiring Leye Photovoltaic, expanding from selling wafers to selling modules, and taking control of the entire "wafer-cell-module" chain. This strategy, known as vertical integration, meant one thing: every link's profit belonged entirely to Longi.
Longi's rise was nothing short of meteoric. Revenue jumped from 11.53 billion yuan in 2016 to 128.99 billion yuan in 2022—an 11-fold increase in seven years. The "Moutai of photovoltaics" was a title truly earned. In December 2020, Li Zhenguo's longtime partner Li Chunan transferred 6% of the company's shares to Hillhouse Capital at 70 yuan per share, valuing the stake at 15.8 billion yuan. Just three and a half months prior, Hillhouse's founder Zhang Lei had published his book "Value," whose most famous thesis was "being a friend of time."
White knight, star capital, best-in-class track—Longi embodied every buzzword of that era. It was a dream-like period for the company. During this time, Li Zhenguo's widely quoted motto—"No leading technology, no capacity expansion"—encapsulated his philosophy of never building capacity without technological superiority. As grand as that declaration was, the harder the fall would be.
The Invisible Inflection Point
The year 2023 was the one most easily overlooked in Longi's story. Shipments hit new records; wafers and modules sold more than the previous year, with revenue reaching 129.498 billion yuan, a 0.4% increase year-over-year. On the surface, this looked like a plateau. In hindsight, it was the ceiling—because prices had already begun to collapse. The crash started at the very top of the supply chain. Polysilicon prices, which had surged from around 70,000 yuan per ton in early 2021 to over 300,000 yuan per ton by August 2022, triggered a frenzy of industry-wide capacity expansion. When the new capacity came online, prices plummeted, dropping below 60,000 yuan per ton by the end of 2023—an 80% decline in a single year.
The cost collapse cascaded down to module prices with lightning speed. In 2023, module bid prices fell from about 1.8 yuan per watt at the start of the year to near 1 yuan per watt by year-end. This created the industry's most typical "false prosperity": volumes rising, prices crashing, and gross margins compressed from 20%-plus to single digits. Longi, as the industry leader, saw its net profit slide from 14.8 billion yuan to 10.75 billion yuan. Note the sequence: profits turned down first, while revenue held up. That flat revenue line of 0.4% growth was, in hindsight, the most textbook sign of a cyclical turning point—but few believed it then, including Longi itself.
Chairman Zhong Baoshen later admitted in his letter to shareholders that management had anticipated the market downturn as early as 2023. But anticipation was one thing; "organizational inertia" was another. Capital expenditure and budgets were not trimmed in time, and a thorough cost transformation only began in the second quarter of 2024. A heavy truck sees the cliff ahead, but by the time the brakes are applied, the wheels are still rolling forward.
The Bill of Missteps
After the inflection point came the freezing point. On April 29, 2025, Longi disclosed its 2024 annual report: revenue of 82.584 billion yuan, down 36.23% year-over-year, and a net loss attributable to shareholders of 8.618 billion yuan—the company's first-ever loss since listing. In his letter to shareholders, Zhong Baoshen wrote a sentence rarely seen in Chinese listed companies' annual reports: "The internal cause is the accumulation of numerous missteps in our operations and management."
Shortly after, Longi's board received Li Zhenguo's written resignation, stepping down as director, general manager, and legal representative. Zhong Baoshen took over as general manager and legal representative. Zhong dissected Longi's missteps into three specific accounts, each worth recording. The first: a failed new product launch. In the second half of 2023, Longi's HPBC 1.0 product "experienced severe disconnection between R&D, production, and sales." With performance and costs failing to differentiate from competitors, the company scaled up production massively, leading to inventory buildup and substantial write-downs on inventory value. By the second half of 2024, the product line was discontinued entirely, retrofitted for the new generation of BC technology—incurring another round of shutdown losses.
The second misstep: a stumble in the US market. Over the previous two years, goods faced clearance delays at US customs. Longi paid hefty storage and return shipping costs, dealt with customer claims for undeliverable goods, and only resumed normal operations in the second half of 2024. The overseas market was the most profitable pool, and it was precisely here that the company bled. The third misstep was the delayed cost transformation mentioned earlier—seeing the problem but failing to stop in time.
Beneath these three accounts lay a deeper, unspoken issue: a misfired technological strategy. Between 2022 and 2023, the industry collectively pivoted to TOPCon technology. Longi refused to follow what it called a "transitional route," instead betting on its self-developed HPBC and BC cell technology. The result was a painful gap: old PERC capacity depreciated rapidly, while new capacity struggled to ramp up, leaving the company in a precarious interim period.
It was also during this time that vertical integration revealed its double edge—in an upcycle, you capture profits from all three segments; in a downcycle, you absorb all three's losses on a single balance sheet. A fair assessment is necessary here: in 2024, few companies in the industry made money. A substantial portion of Longi's losses was industry-wide, not entirely attributable to management decisions. Yet, why did Longi suffer so much more acutely in the same winter? Because industry winter is a common denominator; the three missteps were specific to Longi. Combined, they produced the 8.6 billion yuan loss.
For context, in Q4 2024, Chen Fashu, once dubbed "China's Warren Buffett," reduced his stake by over 43 million shares and exited Longi's top ten shareholders list. Star shareholders vote with their feet far faster than retail investors imagine.
When Time Collects Its Interest
Star shareholders extend beyond Chen Fashu. Hillhouse's investment deserves separate scrutiny. In December 2020, Hillhouse acquired a 6% stake at 70 yuan per share, valuing the deal at 15.8 billion yuan and becoming Longi's second-largest shareholder. At that time, Zhang Lei's "Value" had just been published for three and a half months. Longi was the flagship example of Hillhouse-style "long-termism" in the new energy sector: bet heavily on a technology-believing company, accompany it through cycles, and profit from cognition and time.
What followed, the market has already written in its price charts. Longi's share price fell from 73.03 yuan in November 2021 to 14.86 yuan by the end of April 2025, and further to around 11 yuan by September 2026—an 85% evaporation in market value. According to public shareholder records, Hillhouse disappeared from the shareholder list in Q1 2026, with estimated losses approaching 10 billion yuan on its investment. The ink on "Value" had barely dried when "being a friend of time" turned into "time collecting its interest."
The irony here is not that Hillhouse lost money—capital wins and loses, that's the nature of the game. The irony lies in the narrative itself: when a company's story is compelling enough, "long-term holding" becomes a virtue that requires no justification. But time never automatically sides with anyone. It simply returns what each company has done, with interest. The interest Longi received was the bill for those three missteps.
The Cards Still on the Table
Now, let's look on the bright side. In Longi's 2026 semi-annual report, there are a few signs of spring hidden beneath the surface. Longi still has cards to play. The first card: gross margin has turned positive. In the first half of 2026, Longi's overall gross margin was 1.34%, compared to -0.82% in the same period last year. This figure may seem small, but it signals a shift from "losing money on every sale" to "earning a little on each sale"—a sign of passing through the worst. Of course, the core photovoltaic products (wafers and modules) still carry a negative gross margin of -0.97%. The profitable segments are the power station business (33.47% gross margin) and other ventures like hydrogen and energy storage (31.00%). The core business is still treading water.
The second card: Longi's BC technology is scaling up. In the first half of the year, BC module sales reached 19.55 GW, a 125% year-over-year increase, with shipments accounting for over 65% of total module shipments. The technology route once written off is now Longi's only source of technological premium—domestic centralized procurement shortlisting exceeded 10 GW, and overseas module revenue accounted for over 65% of the total. The hand that was reshuffled after a bad bet is finally looking like a winning one on the third attempt.
The third card, perhaps the most critical: Longi still has money. With substantial resources, it can endure. As of the end of June 2026, Longi held 48.627 billion yuan in cash and equivalents—the thickest liquidity buffer in the industry. Notably, its operating cash flow was -5.818 billion yuan in the first half, deteriorating significantly year-over-year. The company is bleeding on one side while hoarding grain on the other, relying on its war chest to outlast competitors until they fall first.
In my view, Longi Green Energy's true situation is not "the fall of the Moutai of photovoltaics" but a race: on the left, the speed of industry consolidation; on the right, the rate of cash consumption; and on the track beneath, the speed at which BC technology premium can be realized. The loss narrowed to 6.42 billion yuan in 2025 with operating cash flow turning positive, only to expand again to 3.684 billion yuan in the first half of 2026. The recovery curve is jagged; no one can confidently declare the bottom is in.
As we reflect, let's shift our gaze from the price charts. Over the past six years, module prices have fallen by 60%. Solar power has transformed from a "premium energy" to one of the cheapest electricity sources in China, with power stations in northwestern deserts sending electricity to factories and office buildings in the east. The cost of this price revolution: the entire industry losing money for three consecutive years, Longi bleeding 18.7 billion yuan, and countless production line workers losing their jobs.
Longi's story, at its core, is the oldest story in Chinese manufacturing: every technological dividend begins with a giant's windfall and ends with a giant's bloodshed, ultimately leaving affordable prices for everyone. Li Zhenguo and his team won once by believing in an unpopular cause at the height of a boom. Now, the reverse test awaits: in the coldest of times, can they still believe in the judgments they made during their prosperous years?
"No leading technology, no capacity expansion"—that statement was never wrong. What was wrong was the person who made it, believing during the most profitable years that every judgment carried an inherent "leading" halo. As for Hillhouse's Zhang Lei, invest in Tencent and JD.com, and you're a friend of time. Invest in Longi and Gree, and time refuses to be your friend, charging interest instead. The essence of long-termism is never merely "believing in time" but "outlasting time." Time owes no one a comeback; it only keeps the books straight. As for Longi, the cards are still in hand, and its lifeline remains long enough.
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