Trading Halt! 80 Billion Market Cap Leading Solar Company Plans to Acquire Peers

On the evening of February 24, Tongwei Co., Ltd. (600438), a leading producer of polycrystalline silicon in the photovoltaic industry, announced that the company is planning to acquire 100% equity of Qinghai Lihao Qingneng Co., Ltd. (referred to as “Lihao Qingneng”) through issuing shares and paying cash, along with raising supporting funds. Trading of the company’s stock, convertible bonds, and convertible bond conversions will be suspended starting from the market opening on February 25, with an expected suspension period of no more than 10 trading days.

Lihao Qingneng and Tongwei are both producers of polycrystalline silicon. Amidst the urgent need to clear existing polycrystalline silicon capacity, companies are worried about underutilization of capacity. Surprisingly, Tongwei, which owns the most capacity, continues to acquire additional capacity.

On the evening of February 24, a person familiar with the “Polycrystalline Silicon Capacity Integration and Acquisition Platform” told Shanghai Securities News that Tongwei’s action does not belong to the original planned acquisition model of the platform, which was to acquire capacity that needed to be exited by the platform, but is instead a decision made by the company itself.

Tongwei stated that this transaction will not lead to changes in the company’s controlling shareholder or actual controller, does not constitute a related-party transaction, and is not expected to constitute a major asset restructuring.

The transaction is still in the planning stage. The company has already signed a letter of intent for equity acquisition with potential transaction parties Duan Yong, Hainan Zhuoyue Enterprise Management Partnership (Limited Partnership), and Hainan Haoyue Enterprise Management Partnership (Limited Partnership).

Public information shows that Lihao Qingneng was established in April 2021, mainly engaged in the research, production, and sales of photovoltaic-grade high-purity silicon and electronic-grade polycrystalline silicon, among other semiconductor materials.

According to Lihao Qingneng’s official website, the company is located in the Nanchuan Industrial Park of Xining Economic and Technological Development Zone, Qinghai. It plans a total investment of 20 billion yuan to build an annual production project of 200,000 tons of photovoltaic-grade high-purity silicon and 2,000 tons of electronic-grade high-purity silicon. Its wholly owned subsidiary, Sichuan Lihao Qingneng Co., Ltd., was established in January 2023 and is based in Yibin, Sichuan, leveraging Sichuan’s abundant clean energy water resources. It plans to build an annual production project of 200,000 tons of photovoltaic-grade high-purity silicon, 5,000 tons of electronic-grade high-purity silicon, and 250,000 tons of industrial silicon.

Currently, the polycrystalline silicon market is in a severe supply-demand imbalance, with the market awaiting capacity clearance. As a leading company in the industry, Tongwei is expected to incur a loss of 9 billion to 10 billion yuan in 2025.

To address the polycrystalline silicon capacity issue, the “Polycrystalline Silicon Capacity Integration and Acquisition Platform” was officially established at the end of 2025. Beijing Guanghe Qiancheng Technology Co., Ltd. (referred to as “Guanghe Qiancheng”) is the platform’s main entity. Both Tongwei and Lihao Qingneng’s wholly owned subsidiaries are shareholders of Guanghe Qiancheng. The platform also includes several major polycrystalline silicon producers and related parties from the China Photovoltaic Industry Association.

According to the China Photovoltaic Industry Association’s report at the end of 2025, the platform plans to adopt an innovative “two-pronged” approach, implementing a “debt-assisted acquisition + flexible capacity utilization” dual-track model. The goal is to use market-based and legal mechanisms, drawing on successful historical examples such as Japan’s cement industry and China’s electrolytic aluminum industry in resolving supply-demand mismatches. The approach involves “government guidance + industry coordination + market-based mergers and acquisitions” to address the “involution” and vicious competition within the entire industry, starting from the upstream of the industry chain.

However, shortly afterward, the State Administration for Market Regulation (SAMR) held talks with relevant companies, citing monopoly risks in the integration plan, and issued rectification instructions, requiring the companies to implement corrective measures.

According to industry sources, the implementation plan for the “Polycrystalline Silicon Capacity Integration and Acquisition Platform” is still being adjusted.

On February 24, Tongwei’s stock closed at 18.16 yuan per share, with a market capitalization of 81.76 billion yuan.

(Article source: Shanghai Securities News)