Longi Green Energy Technology Co.,Ltd. (SHSE: 601012) has released a preliminary earnings forecast, projecting a net loss between 3.4 billion and 3.8 billion yuan for the first half of 2026. The company anticipates an adjusted net loss, excluding non-recurring items, in the range of 3.7 billion to 4.2 billion yuan.
The company attributed the significant loss to ongoing pressures within the photovoltaic industry, where supply-demand dynamics have not shown substantial improvement. Factors contributing to the downturn include insufficient new energy consumption capacity in the domestic market and a high comparison base from last year's installation rush, leading to a significant sequential decline in new PV installations for the first half. During the reporting period, the company experienced a year-over-year decrease in both module sales volume and revenue, coupled with underutilized production capacity and low gross margins. These challenges were compounded by investment losses from associates and exchange losses due to the appreciation of the Renminbi.
In response to the difficult industry environment, Longi Green Energy stated it is accelerating the full adoption of Back-Contact (BC) technology across its PV business, expanding its scenario-based product portfolio. The company noted an increase in both overseas market sales and the proportion of BC product sales. Efforts to enhance efficiency and reduce costs through BC technology are progressing, and the company has achieved mass production of its ACM (Alloy Contact Matrix) cells.
As of the latest close, Longi Green Energy shares were trading at 11.73 yuan, giving the company a market capitalization of approximately 88.9 billion yuan.
Hillhouse Capital Exits Longi Green Energy with Substantial Paper Loss
Over the past year, Hillhouse Capital has completely divested its stake in Longi Green Energy. The investment firm initially acquired a 6% stake in late 2020 through a share transfer agreement with shareholder Li Chunan at a price of 70 yuan per share, for a total consideration of 15.84 billion yuan. Hillhouse's subsequent exit was a protracted process, which even involved a regulatory investigation by the China Securities Regulatory Commission over alleged violations of restricted share transfer rules.
Between June 30, 2025, and August 22, 2025, Hillhouse sold 37,557,175 shares via centralized bidding at prices ranging from 14.88 to 16.62 yuan per share, raising approximately 583 million yuan and reducing its holding by 0.5%. This sale brought Hillhouse's stake down to 4.999999%, meaning it was no longer a shareholder holding 5% or more. In the fourth quarter of 2025, Hillhouse conducted another significant reduction, selling a further 2.36% of the company's shares.
By March 31, 2026, Hillhouse had exited the list of the company's top ten shareholders, having reduced its position by at least 2.54 percentage points in that quarter alone. Cumulatively, from the second half of 2025 through Q1 2026, Hillhouse divested approximately 5 percentage points of its stake in Longi Green Energy. Based on share prices at the time of these sales, with the stock around 16.52 yuan and the company valued at about 125.2 billion yuan, Hillhouse is estimated to have realized roughly 6 billion yuan from its disposals.
This investment in Longi Green Energy ultimately proved unsuccessful for Hillhouse. Over the six-year holding period, and factoring in the cost of capital, the firm is estimated to have incurred a paper loss approaching 10 billion yuan. By fully exiting the position, Hillhouse has effectively realized this loss, freeing up capital for potentially more productive investments. The firm has reportedly generated gains from other activities, such as participating in the initial public offerings of companies like CATL on the Hong Kong market. Furthermore, with Longi Green Energy's share price declining further after its exit, Hillhouse's decision to divest may have mitigated even greater potential losses.
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