The sharp fall in stock value has prompted executive-level changes at Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. (300316), which recently partnered with the photovoltaic equipment leader New Kailai. On October 17, the company announced a pre-disclosure regarding the share reductions by its directors and senior management. The announcement indicated that company directors and senior executives, including Zhu Liang, Fu Linjian, Zhang Jun, Lu Xiaowen, and Shi Gang, hold a total of 11.1 million shares as of the disclosure date. The five directors and executives plan to reduce their holdings by no more than 2.7762 million shares within three months starting from November 8, 2025, to February 7, 2026, either via centralized bidding or block trading, representing 0.21% of the company’s total share capital after excluding share repurchase accounts. Based on last Friday’s closing price of 37.71 yuan per share, the planned reduction amounts to approximately 105 million yuan. As of the close on October 17, Jingsheng fell 7.62% to 37.71 yuan per share, resulting in a market value of 49.4 billion yuan, which marks a decrease of nearly 13 billion yuan since its peak on October 9. 01 Diversification into Semiconductors Subsidiary Supplies New Kailai Founded in 2006 and headquartered in Zhejiang, Jingsheng is a leading domestic manufacturer of photovoltaic equipment. In recent years, it has been diversifying into the semiconductor sector, producing semiconductor equipment and substrates, as well as consumables and spare parts. The company claims to have localized production of 8-inch to 12-inch silicon wafer equipment, extending its services to chip manufacturing and advanced packaging. Its major customers for silicon wafer equipment include industry leaders like Zhonghuan Semiconductor, Shanghai Xingsheng, Yiswei, Yuyuan Silicon, Hejing Technology, Jinrui Hong, and others. Notably, several investors have recently inquired about Jingsheng's collaboration with semiconductor equipment manufacturer New Kailai on the interactive platform. Jingsheng responded on October 16, indicating that New Kailai is a customer of its wholly-owned subsidiary Jinhong Precision for precision semiconductor components. According to reports from the 21st Century Business Herald, in recent institutional research, Jingsheng stated that as of June 30, 2025, it had over 3.7 billion yuan (including tax) in uncompleted contracts for integrated circuits and compound semiconductor equipment. However, the relevant staff remarked that tracking of order fulfillment is still pending as the execution cycle for semiconductor orders is relatively long, and new orders are being signed regularly. Up to now, Jingsheng has not disclosed specific revenue figures for its semiconductor equipment segment in its financial reports. However, the staff indicated that the share of revenue from photovoltaic business has decreased over the past two years, while semiconductor business revenue has been increasing. Additionally, recent inquiries have been made about whether the company indirectly holds shares in Moolec. Jingsheng confirmed that its controlling shareholder, Shaoxing Shangyu Jingsheng Investment Management Consulting Co., Ltd., holds shares in Moolec via an investment equity fund. However, the staff denied any direct or indirect investment from Jingsheng itself into Moolec. 02 Declining Performance Jingsheng's adjustments to its business structure seem insufficient to sustain continuous growth in performance. The company's semi-annual report shows that in the first half of this year, it generated an operating income of 5.799 billion yuan, down 42.85% year-on-year, and a net profit attributable to the parent company of 639 million yuan, a decrease of 69.52%. Regarding the significant drop in profits, the staff attributed the causes to the cyclical downturn in the photovoltaic industry, which has led to substantial price reductions for materials. Meanwhile, the semiconductor equipment segment is still in the developmental phase. Despite the challenges facing the photovoltaic sector, demand remains robust in the long term. Industry forecasts expect global photovoltaic installations to exceed 300 GW by 2025, leading to a corresponding equipment demand of over 380 GW, indicating ongoing industry expansion. With the accelerated adoption of new technologies like BC, HJT, and perovskite, some enterprises have initiated new rounds of capacity expansion, providing additional incremental opportunities for equipment manufacturers. According to interactive platform information, Jingsheng has achieved large-scale production and sales of 6 to 8-inch silicon carbide substrate materials, and has successfully made breakthroughs in 12-inch conductive silicon carbide single-crystal growth technology. Yinhai Securities research report points out that Jingsheng's semiconductor business is steadily progressing, primarily benefiting from the ongoing development of the semiconductor industry and the acceleration of localization efforts. By the first half of 2025, Jingsheng had over 3.7 billion yuan (including tax) in uncompleted contracts in the semiconductor equipment sector. The company's independently developed 12-inch atmospheric pressure silicon epitaxy equipment has been successfully delivered to leading domestic customers, achieving key performance indicators like resistivity and thickness uniformity comparable to international advanced levels. It is actively promoting customer validation for new products such as the 12-inch dry in/out edge grinder and 12-inch double-side thinning machine. The 12-inch silicon reduced pressure epitaxial growth equipment has successfully been sold and shipped. In the compound semiconductor equipment sector, the company is capitalizing on the industry's trend of transitioning the silicon carbide supply chain to 8 inches, strengthening the marketing of 8-inch silicon carbide epitaxy equipment and 6-8 inches silicon carbide thinning equipment. Jingsheng's silicon carbide substrate materials business has achieved large-scale production and sales of 6-8 inch substrates. In the first half of 2025, the company successfully launched 12-inch conductive silicon carbide crystals and is actively advancing the global customer validation for 8-inch substrates, significantly broadening its sample customer's reach and successfully securing a portion of international clients' bulk orders. The company's stance against excessive competition, distinct from the industry's self-discipline against over-competition, may optimize the photovoltaic industry structure, opening prospects for upward valuation in the sector. During the sixth meeting of the Central Financial Committee held on July 1, 2025, directives were established for governance against low-price disorder, urging companies to enhance product quality and ensure the orderly exit of outdated production capacity. On July 3, 2025, the Ministry of Industry and Information Technology convened 14 photovoltaic companies to discuss comprehensive governance against unreasonable low-price competition. Under anticipated efforts to mitigate over-competition, fluctuations in silicon material prices and downward transmission of module prices warrant close attention.
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