TCL Zhonghuan Renewable Energy Technology Co.,Ltd. is moving forward with the acquisition of a financially insolvent company, Daidao New Energy, amidst intense competition in the photovoltaic industry and its own consecutive financial losses. This move potentially highlights structural weaknesses in TCL Zhonghuan's business model. Compared to integrated industry peers, TCL Zhonghuan has recorded the largest losses, accumulating nearly 20 billion yuan over two years, raising questions about its risk resilience. The acquisition may be driven by an urgent need to address deficiencies in its vertical integration strategy. Notably, the acquisition target, Daidao New Energy, is insolvent, and its primary production capacity is concentrated in TOPCon technology, casting doubt on its ability to support TCL Zhonghuan's strategic focus on BC battery development.
Recently, TCL Zhonghuan's decision to acquire Daidao New Energy Technology Co., Ltd. (Daidao New Energy) against market trends has attracted significant attention. According to an announcement, TCL Zhonghuan plans to spend 1.258 billion yuan in cash to gain a controlling stake in Daidao New Energy. It is important to note that Daidao New Energy is already insolvent.
Currently, the photovoltaic industry is experiencing intensified "involuted" competition due to supply-demand imbalances, maintaining pressure on TCL Zhonghuan's operations. In 2025, the company achieved operating revenue of 29.05 billion yuan, a slight increase of 2.22% year-on-year; however, it reported a net loss attributable to shareholders of 9.264 billion yuan, continuing a trend of losses. Specifically, in the fourth quarter, revenue was 7.479 billion yuan, up 28.14% year-on-year, but the net loss attributable to shareholders was 3.487 billion yuan.
Against this backdrop, the critical question is whether this acquisition will enhance TCL Zhonghuan's quality or further burden the listed company. What challenges does this transaction reveal for the company?
**Quality of the Target Asset: Insolvency** The acquisition target, Daidao New Energy, specializes in the R&D, manufacturing, and sales of high-efficiency solar cells, PV modules, and system applications. Since 2023, it has ranked highly in national N-type module bidding volumes and has accumulated years of R&D experience in various application scenarios and BC battery technology.
Two aspects of this transaction are noteworthy. First, the target's financial performance has deteriorated significantly, resulting in insolvency. Second, the valuation of the target asset has shrunk substantially.
Daidao New Energy had previously applied for a创业板 (ChiNext) listing in 2023, aiming to raise 2.5 billion yuan. However, the IPO plan was terminated on August 16, 2024, without a response to the inquiry letter from regulators. During its IPO application, Daidao New Energy showed surging performance. Its prospectus indicated that from 2020 to 2022, revenues were approximately 736 million yuan, 1.894 billion yuan, and 8.606 billion yuan, respectively, with net profits attributable to shareholders of about 22 million yuan, a loss of 147 million yuan, and a profit of 203 million yuan, respectively. In the first half of 2023, revenue reached approximately 9.454 billion yuan, with a net profit of about 581 million yuan, exceeding full-year 2022 figures.
However, the target's performance has since reversed dramatically. Cumulative losses for 2024 and 2025 reached nearly 5 billion yuan, and by the end of 2025, the company was insolvent, with negative net assets attributable to shareholders of -1.292 billion yuan.
Furthermore, the target's valuation has plummeted. Just before the IPO application, its valuation after the last round of financing was nearly 8 billion yuan. On June 5, 2023, the company increased its registered capital, with 14 new investors subscribing at 14.64 yuan per share, resulting in a post-investment valuation of 7.746 billion yuan. Based on the planned IPO fundraising amount, its valuation could have reached 25 billion yuan.
The current valuation, however, is significantly lower. The announcement indicates that TCL Zhonghuan will pay 258 million yuan to acquire an 8.06% stake (pre-capital increase) from 50 shareholders. Additionally, it will invest 1 billion yuan to subscribe to new shares, obtaining a 55.56% stake post-investment. This implies a valuation of approximately 3.2 billion yuan for the transferred shares and a pre-money valuation of only 800 million yuan for the new shares, with a total transaction value of about 2.127 billion yuan. The company explained the differentiated pricing by stating the share transfer price was based on the original investment costs of the sellers, while the capital increase was priced based on the 800 million yuan pre-money valuation.
Upon completion of the share transfer and capital increase, TCL Zhonghuan will invest a total of 1.258 billion yuan for a 59.14% equity stake in Daidao New Energy. It will also receive voting rights entrustment for an additional 7.20% stake, resulting in control over 66.34% of the shares. Post-transaction, Daidao New Energy will become a subsidiary and be consolidated into TCL Zhonghuan's financial statements.
**Target's Core Capacity is TOPCon; BC Synergy Uncertain** Given the poor performance of both the target and TCL Zhonghuan itself, is this acquisition worthwhile?
The company cites strategic BC battery layout as a rationale. It states this investment is a crucial path to synergizing the BC patent technology of its subsidiary with Daidao New Energy's BC battery module manufacturing processes and capacity, aligning with strategic priorities.
Industry insiders note that TOPCon remains the industry's "bedrock" due to its unparalleled cost advantages, mature supply chain, and economies of scale. Conversely, BC is considered a "platform technology" that can be combined with TOPCon or HJT to form TBC or HBC tandem cells, seen as a vital path towards next-generation perovskite tandem technology. 2026 is viewed as the "first year of rapid expansion" for BC, with global capacity exceeding 150GW. Despite overall low industry utilization rates, BC production lines are operating at nearly 60% capacity.
In reality, Daidao New Energy's primary capacity is focused on TOPCon. Its website states N-type high-efficiency cell and module capacity reached 40GW+40GW in 2025. The company claims its DBC 3.0 technology is fully compatible with existing TOPCon processes and equipment. However, industry analysis suggests converting TOPCon lines to BC requires adding key equipment like laser patterning, involving significant modifications, with actual costs and difficulties remaining uncertain.
According to 2026 industry data, Daidao New Energy's DBC 3.0 Plus technology, compared to mainstream BC technologies like LONGi Green Energy's HPBC and Aiko Solar's ABC, shows a "leading cell efficiency, comparable module efficiency, but still catching up in yield rate and cost." Specifically, in efficiency, LONGi's HPBC 2.0 mass production efficiency exceeds 26.5%, with module efficiency over 24.3% and power exceeding 660W. Aiko's ABC cell efficiency is 27.3%, with module efficiency over 25%. Daidao's DBC 3.0 Plus claims a cell efficiency of 27.77%, a module full-area conversion efficiency of 24.61%, and power breaking 664.9W. Thus, Daidao's cell efficiency is slightly higher than Aiko's 27.3%, but its module full-area efficiency of 24.61% is lower than Aiko's 25%+. In terms of yield rate, LONGi's HPBC 2.0 stabilizes above 97%, and Aiko's ABC yield is likely similar. Daidao claims its DBC 3.0 pilot line yield is stable above 96%, slightly below the leading 97%+ level.
**Suffering from Merger Aftermath?** It is noteworthy that TCL Zhonghuan's previous acquisition and integration of Maxeon have not met expectations.
On May 30, 2024, TCL Zhonghuan announced plans to gain control of Maxeon through a package of transactions involving convertible bonds and a private placement, with a total investment of up to $197.5 million, ultimately aiming for a controlling stake. Post-transaction, its shareholding was expected to increase from 22.39% to at least 50.1%.
Maxeon designs, manufactures, and sells Maxeon and SunPower brand solar modules, with operations across Africa, Asia, Oceania, Europe, and the Americas. TCL Zhonghuan described Maxeon as a key strategic pivot for its participation in the global energy transition, highlighting its IBC cell-module patents, TOPCon cell process patents, and shingled module patents, along with strong global IP protection, brand, and channel advantages.
TCL Zhonghuan invested over 2.5 billion yuan to secure Maxeon, but the integration appears challenging, with the acquisition proving detrimental. Reportedly, impacted by subsidy reductions in Europe and the US and high interest rates, Maxeon incurred a loss of $275 million in 2023, leading to an impairment loss of over 1.8 billion yuan for TCL Zhonghuan. In 2025, as Maxeon's operations showed no significant improvement and production was largely halted, TCL Zhonghuan recorded an additional goodwill impairment of 560 million yuan related to Maxeon.
Risks associated with Maxeon cannot be ignored. The company's annual report also pointed out that the US "Big and Beautiful Act" is expected to significantly impact demand for PV modules in the US and domestic US manufacturing. Its subsidiary Maxeon divested markets and manufacturing outside the US to focus on the American market, but its business transformation and restructuring progress has lagged expectations. If current market conditions persist, the subsidiary's ability to raise funds may be constrained, challenging its liquidity and operational continuity, facing significant going concern pressures and financial risks.
**Anxiety Over Vertical Integration Behind Frequent Acquisitions?** This acquisition is presented as part of a vertical integration strategy.
The company stated the transaction is a strategic move to seize consolidation opportunities in the PV industry and respond to calls for high-quality development. It aims to perfect the company's integrated "wafer-cell-module" industrial chain layout, strengthen upstream-downstream synergy, and enhance key technological capabilities. Post-acquisition, the parties plan to phase out inefficient capacity, build an industrial ecosystem for new technologies and applications, and improve operational conditions through empowerment and synergy.
This potentially reflects underlying structural issues. TCL Zhonghuan's core business is heavily concentrated on wafers. In 2025, its new energy PV business revenue was 22.725 billion yuan, accounting for 78.23% of total revenue. Within this, PV wafer revenue was 12.238 billion yuan (42.13%), and PV module revenue was 9.324 billion yuan (32.10%). It is worth noting that in 2024, wafer business contribution once approached nearly 60%.
A significant difference in risk resilience during industry downturns appears to exist between integrated and non-integrated companies.
Public information shows that Trina Solar, a globally leading module manufacturer, has布局 (laid out) wafers, cells, power stations, and system solutions, forming vertical integration. JA Technology's business covers wafers, cells, modules, and PV power stations, with multiple global production bases, making it a typical vertically integrated enterprise. Jinko Solar's business encompasses silicon materials, wafers, cells, modules, and PV power generation, with complete capacity from ingot pulling to modules globally. LONGi Green Energy, the world's largest wafer and module manufacturer, covers wafers, cells, modules, power stations, and green energy solutions. Tongwei Co., Ltd. focuses on high-purity polysilicon and solar cells, extending to modules and power stations, building a vertical "polysilicon + cell + module" chain. In contrast, TCL Zhonghuan's core business is PV wafers and semiconductor wafers, with expansion into PV modules. However, its module capacity is far lower than its wafer capacity, indicating weaker downstream synergy. The industry generally views it as a "specialized wafer leader" rather than an integrated player.
During the industry downturn, among these six companies, TCL Zhonghuan incurred the largest losses, approaching 20 billion yuan cumulatively. Does this suggest that integrated players (LONGi, Tongwei, Trina, JA Tech, Jinko) demonstrate stronger risk resilience during downturns through internal supply chain coordination, cost smoothing, and end-product brand premiums? In other words, does TCL Zhonghuan's weaker integrated layout result in poorer risk resistance?
Industry data further validates that under a single-business structure, wafer prices have experienced the most significant declines. According to PV InfoLink, in 2024, the average price of polysilicon fell from 65 yuan/kg to 39 yuan/kg, a 40% drop; monocrystalline silicon wafers (210mm) fell from 3.2 yuan/piece to 1.4 yuan/piece, a 56.25% drop; TOPCon cells (182mm) fell from 0.47 yuan/W to 0.28 yuan/W, a 40.42% drop; TOPCon modules fell from 1.0 yuan/W to 0.68 yuan/W, a 32% drop.
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