TCL Zhonghuan released its first-quarter financial report for 2026 on the evening of April 27. Against the backdrop of the photovoltaic industry continuing its intense internal competition from 2025, the report still reflects the fundamental difficulties faced by PV companies: meager revenue growth and persistent losses.
The financial report shows that TCL Zhonghuan achieved operating revenue of 6.549 billion yuan in Q1 2026, a year-on-year increase of 7.34%. However, the net profit attributable to shareholders was a loss of 1.647 billion yuan.
Although still in the red, the loss narrowed compared to the same period last year (a loss of 1.906 billion yuan) and showed a sequential improvement of 52.8%.
In the first quarter, the net cash flow from operating activities for TCL Zhonghuan was approximately 304 million yuan, a decrease of 37.97% year-on-year. This was primarily due to increased production volume leading to higher procurement payments compared to the previous year, coupled with a decrease in government subsidies.
For TCL Zhonghuan to achieve a genuine turnaround to profitability, it needs to continuously unlock further avenues for revenue growth. However, based on current observations, the revenue growth seen in the first quarter lacks significant sustainability.
The Q1 revenue growth for TCL Zhonghuan was largely fueled by a surge in demand prompted by adjustments to export tax rebate policies.
Effective April 1, 2026, China officially abolished export tax rebates for products including photovoltaics. To lock in profits before the policy benefit expired, overseas customers engaged in a noticeable rush to secure orders and installations during the first quarter.
Data compiled by InfoLink from Chinese customs statistics showed that China's exports of PV modules and cells surged in March 2026. Module exports were supported by both the Asia-Pacific and Europe, while for cells, significant growth was also seen in the African market alongside the Asia-Pacific region.
Regarding PV modules, China exported approximately 37.32 GW in March 2026, a substantial increase of about 123% compared to 16.75 GW in February, and a growth of about 60% compared to 23.38 GW in March 2025. Cumulatively for January-March 2026, China exported approximately 71.42 GW of PV modules, an increase of about 15% compared to 61.89 GW in the same period last year.
Amy Fang, a senior analyst at InfoLink, stated that the March export data "clearly reflects the concentrated shipping trend ahead of the April policy adjustment."
She also mentioned changes in the regional distribution of exports: imports into the Asia-Pacific region reached approximately 13.82 GW in March, accounting for 37% of total exports and surpassing Europe for the first time. Europe imported about 13.05 GW, representing a 35% share. The Americas and Africa each imported around 4.4 GW, followed by the Middle East with 1.62 GW.
Fang believes this regional distribution indicates that the export surge in March was not driven by a broad acceleration in end-demand, but rather by stockpiling ahead of the policy change. Market attention has now shifted to whether second-quarter demand can absorb the earlier concentrated shipments, with the focus moving from the "export rush" to price dynamics, cost pass-through, and inventory digestion.
While this "front-running" supported shipment volumes in the first quarter, it may also signal a potential sharp, temporary drop in overseas demand during the second quarter.
TCL Zhonghuan pointed out that while the tax policy adjustments provided some short-term support for PV industry demand, the supply-demand imbalance remains severe. Prices for polysilicon and wafers continued to weaken. Simultaneously, with rising prices of key raw materials, the cell and module segments attempted to alleviate cost pressures through price increases. Major segments of the industry chain remain at the bottom of the cycle.
For TCL Zhonghuan, maintaining pricing power in the global market after the rebate policy adjustment will be the next significant challenge.
Confronted with price wars in the wafer segment, Zhonghuan is accelerating its efforts to escape the quagmire of homogenized competition. On March 30, Zhonghuan announced plans to acquire a controlling stake in Jiangsu DAS Solar Co., Ltd. for 1.258 billion yuan, a move that has become the most watched variable following the quarterly report.
Jiangsu DAS Solar Co., Ltd. possesses mature processes in Back Contact (BC) cell and module technology, which complements the BC patents accumulated by Zhonghuan.
Historically known as a "wafer giant," Zhonghuan has been relatively weaker in the module segment. By integrating Jiangsu DAS Solar Co., Ltd., Zhonghuan is attempting to strengthen its integrated BC closed-loop from wafers to cells to modules, enabling direct competition in higher-value markets.
The challenges of integration cannot be overlooked. Jiangsu DAS Solar Co., Ltd. reported a loss of 1.97 billion yuan in 2025 and was in a state of negative assets.
It can be said that TCL Zhonghuan's current move to "buy at the bottom" is not only a technological marriage but also an extreme test of its capital allocation and management integration capabilities.
Faced with a market trading environment showing no significant improvement, breaking free from the cycle of cutthroat competition remains a common challenge for the entire photovoltaic industry.
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