On October 24, Shuangliang Eco-Energy Systems Co., Ltd. (600481.SH) released its third-quarter report along with a significantly reduced plan for a new stock issuance.
According to the data, Shuangliang Eco-Energy generated operating revenue of 6.076 billion yuan in the first three quarters, down 41.27% year-on-year, with a net profit attributable to shareholders of the listed company of -544 million yuan. In the third quarter, the company reported an operating revenue of 1.688 billion yuan, a decrease of 49.86% year-on-year, and a net profit attributable to shareholders of 53.18 million yuan. The company stated that the performance fluctuation was mainly due to a decline in sales of photovoltaic products affected by the industry; however, it continues to push forward lean management and enhancements in quality and efficiency, leading to a reduction in costs for photovoltaic products. Additionally, a recovery in monocrystalline silicon prices has significantly boosted total profit and net profit.
A Reduced New Issuance Plan While announcing its earnings, Shuangliang Eco-Energy also declared the termination of its 2023 plan to issue A-shares to specific investors and unveiled a plan for 2025 to issue shares to certain parties. The total funds to be raised in this specific issuance are expected to not exceed 1.292 billion yuan (inclusive). Compared to previous fundraising plans, the new issuance scheme has been reduced by nearly 50%.
It is reported that the raised funds will primarily be directed towards four major areas: firstly, 493 million yuan will be invested in the construction of a zero-carbon intelligent manufacturing plant, which includes two sub-projects related to efficient air-cooling and liquid-cooling intelligent equipment systems, as well as mid-to-high-temperature heat pumps and efficient heat exchanger equipment; secondly, 200 million yuan will go towards the construction of 700 sets of green electricity intelligent hydrogen production equipment; thirdly, 214 million yuan will be allocated for research and development projects, including a smart hydrogen production equipment and materials R&D center, along with the development of high-efficiency energy-saving carbon reduction equipment systems; fourthly, 385 million yuan will be used to supplement working capital.
Despite the industry’s anti-competition policies, Shuangliang Eco-Energy remains committed to its financing plans. Industry insiders believe the underlying reason lies in the company's high debt ratio, prompting an urgent need to enhance liquidity.
High Leverage Leading to Elevated Debt Financial data shows that as of the end of the third quarter, Shuangliang Eco-Energy's asset-liability ratio was a staggering 81.91%. The asset-liability ratios for the years 2021 to 2024 were 72.7%, 68.49%, 76.45%, and 82.77%, respectively. The company's high indebtedness is largely attributable to its leveraged expansion since 2021. Annual reports indicate that at the end of 2020, Shuangliang Eco-Energy's fixed assets amounted to 443 million yuan, with total assets of 4.109 billion yuan, an annual revenue of 2.07 billion yuan, and a net profit attributable to shareholders of 137 million yuan.
Subsequently, during 2021 and 2022, the company launched multiple large-scale expansion plans that it had to finance through loans and A-share market activities, given the insufficiency of its own capital. For instance, in 2021, the company borrowed 3 billion yuan, which skyrocketed to 15 billion yuan by 2024. Meanwhile, interest rose sharply from 35 million yuan in 2021 to 548 million yuan in 2024.
Such elevated borrowing remains insufficient to support Shuangliang Eco-Energy’s "gamble." In August 2022, the company raised 3.5 billion yuan through a share issuance to support the first phase (20GW) project in Baotou and to enhance liquidity. Additionally, in October 2022, it unveiled a plan to issue convertible bonds. In 2023, a new plan for a stock issuance up to 2.56 billion yuan was again proposed, but it has yet to obtain approval. Over the years, its direct financing has surpassed its net asset value. As of the end of the third quarter this year, the company's net assets stood at 4.613 billion yuan, while interest-bearing debts amounted to 12.7 billion yuan, with cash balances of 4.335 billion yuan.
The high leverage has left Shuangliang Eco-Energy in a situation of "robbing Peter to pay Paul." Although the company’s revenue scale is expanding, by 2024, a turnaround is expected with revenues dropping to 13 billion yuan and a net loss of 2.134 billion yuan. By the end of 2024, its total debt is expected to reach 16.65 billion yuan, with short-term debt constituting 75.7%.
Future Focus on Hydrogen Energy In 2015, Shuangliang Eco-Energy completed its acquisition of Shuangliang New Energy Equipment Co., Ltd., successfully entering the field of multicrystalline silicon reduction furnace. Through a significant asset swap, it exited 75% equity in Lishide Chemical, bringing in Shuangliang New Energy and enabling cross-industry expansion.
The company's controlling shareholder is Shuangliang Group, with Miao Shuangda as the actual controller. As of September 30, 2025, Miao Shuangda controls a total of 45.93% of the company’s equity through direct and indirect means.
Consecutive losses have placed this company, with relatively modest net assets, in a challenging position. As competition intensifies within the photovoltaic sector, businesses are grappling with financial strength and cutting-edge technology; significant financial investment in R&D is crucial for advancement. Previously, Shuangliang Eco-Energy saw rapid performance growth due to its multicrystalline silicon reduction furnace; however, its main business growth has peaked, and severe overcapacity in multicrystalline silicon has made further expansion unfeasible. The strategy of leveraging silicon wafer components for a turnaround also appears unrealistic, as Shuangliang Eco-Energy's sales of components reached only 2GW in 2024, a relatively small volume. According to the latest 2025 fundraising plan, the company is betting on the hydrogen energy sector, specifically the demand for electrolysis cells driven by green hydrogen.
Shuangliang Eco-Energy has already signed orders for hydrogen production equipment. In June of this year, Shuangliang New Energy entered into a sales contract with Hongyang New Energy Development Group Jilin Co., Ltd. for the integrated project of photovoltaic storage hydrogen and ammonia at Fuhai County, valued at 450 million yuan.
The announcement stated that the supply is for a green hydrogen production system. Additionally, the company is attempting to develop hydrogen energy projects overseas.
In terms of technical capabilities, Shuangliang Eco-Energy's self-developed SDJ S1 series alkaline water electrolysis cells have received international third-party authoritative certification, with a hydrogen production capacity of up to 2000 Nm³/h; it has also launched the world’s largest 5000 Nm³/h high-performance alkaline electrolysis cell, which is recognized as the highest capacity and current density production device while maintaining the lowest energy consumption for the same current density.
Despite validation of its green hydrogen technology, existing orders, and policy support, the recent fundraising and expansion plan for Shuangliang Eco-Energy remains uncertain. Industry insiders believe that the significant focus of this fundraising plan is on the company’s hydrogen energy development strategy. Notably, its alkaline electrolysis route remains the mainstream; however, whether it could be rapidly replaced by PEM (proton exchange membrane) technology remains uncertain. The progress of its financing will dictate whether the hydrogen production plant can be completed on schedule and if the planned capacity of 700 units can be successfully integrated and whether continuous order renewals will follow—all of which will need time to be proven.
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