Jinlang Technology Sells 72 Subsidiaries to Restructure Business

Jinlang Technology has recently announced the sale of four subsidiaries for a total of 29.059 million yuan, with the equity change registration already completed. This is not the first time the company has disposed of subsidiaries; between 2024 and June 2025, it canceled 505 subsidiaries and transferred 72 equity stakes through related parties. Most of these divested companies were part of Jinlang’s residential photovoltaic power generation business, which has been a key revenue driver for the company.

In the first half of 2025, Jinlang’s total installed capacity for power generation reached approximately 1300 MW, placing it among the top producers in the country. This significant divestment raises questions about Jinlang Technology’s strategic direction and future plans.

Financial Overview

On the surface, Jinlang appears to be “using assets to supplement cash.” The average gross profit margin for its residential photovoltaic generation systems and new energy production has consistently remained above 50%, which is higher than its inverter business. The photovoltaic generation systems require minimal capital investment, which reduces depreciation costs and mitigates inventory risks, contributing to a long-term gross margin exceeding 58%.

The high gross margins in power generation are driven by the scale of self-developed, owned, and operated photovoltaic plants, which lowers the unit cost of electricity generation. However, achieving such cost advantages necessitates scale. Jinlang’s revenue of under 1 billion yuan is backed by over 10 billion yuan in fixed asset investments. From 2021 to 2023, Jinlang spent over 14.104 billion yuan on long-term assets, and by the end of 2023, its fixed assets amounted to 15.318 billion yuan, accounting for over 70% of total assets. A substantial portion of Jinlang’s funding relies on loans, with long-term borrowings increasing from 134 million yuan at the end of 2020 to 7.339 billion yuan by mid-2025, a more than 50-fold increase.

This situation has created dual pressures: the need to incur depreciation on fixed assets and to service loan interest. In the first half of 2025, these costs totaled 569 million yuan, significantly eroding profits. To alleviate financial pressure, Jinlang has reduced its capital expenditures, with cash spent on long-term asset acquisitions dropping to 3.631 billion yuan in 2024 and further down to 153 million yuan in the first half of 2025. Selling off certain photovoltaic subsidiaries generated 518 million yuan in cash, providing some relief.

During a research event in March 2025, Jinlang indicated that there would not be significant new investments in power plants, with only minor sales expected.

Impact on Profitability

Will the continued sale of core assets affect Jinlang’s profitability? The answer is yes, but the impact may not be substantial. In the first half of 2025, the two power generation segments still contributed 629 million yuan in operating profit, accounting for over 45% of total profits. This led to a remarkable 70.96% year-on-year increase in net profit attributable to shareholders, outperforming competitors like Sunshine Power and Shihang New Energy.

Moreover, having numerous subsidiaries is not detrimental to Jinlang; in 2023 alone, they established 794 new subsidiaries. Although control over some power plants has been sold, Jinlang can continue providing comprehensive system services to bolster its performance.

Strategic Shift

In 2024, Jinlang emphasized the need to “align with DeYe,” another player in the photovoltaic industry, particularly in the inverter sector. In the first half of 2025, DeYe’s inverter revenues reached 2.644 billion yuan, while Jinlang’s inverter revenue was 2.613 billion yuan, indicating similar scales. Jinlang ranks third nationally in market share for photovoltaic inverters as of 2024.

DeYe has shown remarkable growth, with inverter revenues growing from 384 million yuan in 2020 to 5.556 billion yuan in 2024, a compound annual growth rate of 56.5%, compared to Jinlang’s 21.3%. By mid-2025, DeYe’s inverter gross margin was approximately 45%, while Jinlang’s higher-margin storage inverters only reached 30.27%.

To enhance its product offerings, Jinlang is shifting toward high-value products. In the first half of 2025, income from storage inverters surged from 192 million yuan in the same period in 2024 to 793 million yuan, a remarkable increase of 313.51%. Jinlang is also capitalizing on opportunities in European markets and emerging markets in Asia, Africa, and Latin America.

On August 21, 2025, Jinlang announced a fundraising initiative of 1.677 billion yuan, with 625 million allocated for upgrading inverter production capacity to meet increasing demands in Europe and emerging markets.

In summary, Jinlang Technology is not merely seeking to replicate DeYe’s model but aims to recreate its own version of success. While the company previously established an advantage in photovoltaic power generation through substantial fixed investments, its recent divestitures are part of a broader strategy to adapt and thrive in a changing market landscape.