Zerun New Energy Goes Public, Highlighting New Trends in the Photovoltaic Capital Market

Zerun New Energy officially launched its initial public offering (IPO) online subscription on April 28, 2025, with the results to be announced on April 30. After passing its IPO review in February 2024, Zerun New Energy took a year to successfully list on the Growth Enterprise Market, becoming the second photovoltaic company this year to receive registration approval from the China Securities Regulatory Commission.

The photovoltaic industry is currently facing increased profitability pressure due to a complex financing environment and intense competition. This has resulted in a noticeable slowdown in IPOs within the sector. As we enter 2025, the photovoltaic capital market is showing signs of revitalization, with companies striving to expand their financing channels.

Zerun New Energy aims to raise 720 million yuan through its IPO. The funds will primarily be used for the expansion of photovoltaic module production and smart junction box projects, as well as the establishment of a research and development center. These initiatives are expected to enhance production capacity, improve technological standards, and further penetrate the market.

According to incomplete statistics from China Energy News, three companies have been approved for listing this year; Zerun New Energy and Shouhang New Energy have entered the A-share market, while SkyMoon Solar is set to list on the NASDAQ in the United States. Additionally, six other photovoltaic companies have announced their intentions to pursue IPOs, with four planning to list in Hong Kong, making this market an attractive option for many photovoltaic enterprises.

In 2024, the pace of IPOs in the photovoltaic sector significantly slowed, with 24 companies planning to list on the Shanghai, Shenzhen, and Beijing exchanges, aiming to raise over 30 billion yuan. However, only three companies successfully completed their listings, while most remain in the inquiry or review stages. Some have opted to withdraw their IPO applications due to unfavorable market conditions or internal issues.

As we move into 2025, the photovoltaic capital market is exhibiting a more active dynamic, with internal investment intentions surfacing and several acquisition plans underway. With an increasing number of photovoltaic companies setting their sights on the Hong Kong market, the industry is broadening its horizons beyond traditional domestic capital markets to explore more diverse financing pathways and strengthen its capital base.

The challenges in the photovoltaic industry are partly attributed to a difficult financing landscape. Wang Bohua, honorary chairman of the China Photovoltaic Industry Association, stated that losses among photovoltaic companies continue to expand, exacerbating the industry’s cash flow crisis. Rapid declines in the prices of silicon materials, wafers, solar cells, and modules have intensified operational losses. Particularly in the fourth quarter of 2023, net profits in the photovoltaic module sector experienced negative growth, while the pressure on auxiliary materials has also increased.

Wang noted that under the backdrop of significant price drops, the profit margins for photovoltaic companies have been severely compressed, leading some small and medium-sized enterprises to declare bankruptcy. By the end of February this year, over 30 listed photovoltaic companies disclosed preliminary earnings reports due to revenue declines, shifts from profit to loss, performance forecasts, project suspensions, and changes in equity.

Profitability pressures and uncertainties are surfacing across the photovoltaic industry chain. Wang further pointed out that revenues and profits in the main industry chain have decreased, with high debt ratios and a doubling of accounts receivable turnover days. Although revenues in the auxiliary materials sector have seen slight declines, profit reductions have been significant, and days for accounts receivable have also increased notably. Meanwhile, the production equipment sector has shown a trend of increased revenue without corresponding profit increases, with revenue growing against the current but net profits declining.

For instance, Zerun New Energy reported revenues of 149 million yuan, 297 million yuan, 522 million yuan, 844 million yuan, and 876 million yuan from 2021 to 2024. While overall revenue displays an upward trend, growth has begun to level off in recent years. The sales revenue from its top five customers has consistently accounted for over 70% of its total revenue. During the reporting period, the company’s customer concentration has remained high, leading to a continued rise in accounts receivable.

Despite the array of challenges, Wang remains optimistic about the future of China’s photovoltaic industry, predicting that the new installed capacity in 2025 will maintain a high level, potentially reaching 215 gigawatts conservatively, and 255 gigawatts under optimistic conditions. The steady growth in societal electricity demand and the advancement of green energy transitions suggest a promising long-term outlook for the photovoltaic sector. Moreover, ongoing technological innovations within the photovoltaic industry chain are expected to continually expand application scenarios, fostering deeper integration with various sectors.

Wang emphasized that continuous technological advancements will drive the photovoltaic industry to uncover new application landscapes. With sustained innovation and improvement, the photovoltaic sector is poised to contribute significantly to China’s green energy transition. According to CICC, the photovoltaic industry stands as a competitive advantage for China on a global scale. By 2025, driven by the dual carbon goals, along with market self-regulation and industry self-discipline, the photovoltaic industry is likely to witness a significant rebound in fundamentals. Guojin Securities forecasts that the profitability turning point across various segments of the industry may appear as early as the second quarter of 2025, further propelled by the emergence of new technologies and demands.

In summary, despite facing multiple challenges such as price pressures, intense market competition, and compressed profit margins, the long-term growth potential of the photovoltaic industry remains substantial, supported by policy backing, technological progress, and market demand. As photovoltaic companies continuously adjust their strategies and optimize their structures, the industry is set to embrace new development opportunities.