Recent developments at GCL-Poly Energy Holdings have attracted significant attention within the photovoltaic industry. This company, known for its traditionally low profile, has recently taken on a more prominent stance by issuing several important announcements and implementing numerous management changes and internal restructuring measures.
On April 6, GCL-Poly released a voluntary announcement revealing that its photovoltaic materials division achieved an EBITDA of approximately 505 million yuan. This figure is interpreted as the company being the first in the industry to attain stable positive cash flow. The announcement also highlighted that the average cash production cost of its granular silicon (including R&D expenses) is around 27.07 yuan/kg, emphasizing that this cost remains at the industry’s leading level. Just a week earlier, on March 29, during the 2024 annual performance briefing, GCL-Poly had stated that this cost would be 27.14 yuan/kg for 2024, indicating a significant decrease from 33.18 yuan/kg in the third quarter of 2024.
Earlier personnel changes within GCL-Poly also drew attention from industry insiders. On February 20, Zhu Gongshan, Chairman of GCL Group and Chairman of GCL-Poly’s Board, took over as CEO of GCL-Poly, signaling his personal involvement in management. Following that, on March 20, GCL-Poly announced a forecasted loss of 4.8 billion yuan and declared that management would lead by example with salary cuts exceeding 90%. This series of actions has sparked curiosity regarding Zhu Gongshan’s intentions.
According to sources close to GCL-Poly, Zhu Gongshan expressed satisfaction with the company’s management level, production process stability, and product capabilities, but he was not pleased with the projected performance and financial results for 2024. He also expressed dissatisfaction regarding the “high salaries and low output” of senior executives. Consequently, he opted for a strategy focused on internal restructuring while enhancing external communication.
Notably, GCL-Poly’s recent high-profile moves are closely related to the upcoming IPOs of two companies: Xinhua Semiconductor and GCL Photovoltaics. Xinhua Semiconductor, which has been established for over ten years, specializes in electronic-grade polysilicon and large-scale semiconductor wafers, and recently initiated its listing guidance in October of last year. GCL Photovoltaics, on the other hand, is a spin-off focused on perovskite technology, and it is expected to file for listing on the Hong Kong Stock Exchange this year, potentially becoming the first Chinese perovskite stock.
From the perspective of GCL Group’s capital structure, Zhu Gongshan is highly adept at capital operations. Currently, GCL Group boasts four publicly listed companies, including GCL-Poly, which focuses on silicon materials and wafers; GCL New Energy, which engages in the development and operation of photovoltaic power plants; GCL Integrated, which manufactures components; and GCL Energy Technology, which centers on comprehensive energy services. Zhu Gongshan has utilized strategies such as mergers and spin-offs to secure independent financing channels for each business segment, thereby enhancing market value and management efficiency.
In terms of photovoltaic technology, GCL-Poly has demonstrated a strategy of diversified layout. Unlike other integrated giants that firmly align with a single camp, GCL-Poly has adopted a multi-pronged approach, engaging in various fields, including TOPCon, BC, and perovskite technology. This diversified leverage strategy allows GCL-Poly to avoid direct competition with giants like LONGi and JA Solar on a single technology front while ensuring that it remains competitive overall. For instance, regarding TOPCon technology, GCL Integrated invested 800 million yuan to establish a joint venture with an affiliated company, acquiring a 90.957% stake in Zhuoyao New Energy, which has a capacity of 12 GW. This move not only balances GCL Integrated’s component and cell production at a 1:1 ratio but also provides opportunities for flexible capacity allocation and technological upgrades.
In the BC domain, GCL-Poly has leveraged its upstream silicon material advantages to collaborate with leading companies, successfully entering the BC camp. The layout in perovskite technology showcases Zhu Gongshan’s astuteness. Although GCL Photovoltaics currently generates less than 100 million HKD in revenue and is still in a research and development phase without profitability, GCL has opted to spin it off for separate listing, using capital market leverage to nurture this emerging business. Previously, GCL Photovoltaics had already attracted numerous well-known investment institutions, which also have exit needs.
This diversified layout strategy enables GCL-Poly to maintain a competitive edge in the fierce photovoltaic market. However, Zhu Gongshan recognizes that there is always a limit to leverage in both primary and secondary capital markets. GCL Integrated’s debt-to-asset ratio has reached 87.57%, and GCL-Poly has recently completed two financing rounds totaling approximately 5.1 billion yuan. Therefore, moving forward, GCL-Poly must exercise greater caution in utilizing capital leverage to ensure the company’s sustainable development.
Risk Warning: This article is for reference only and does not constitute investment advice. Investors should bear their own investment risks.
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