Xinjiang Dachuan New Energy Co., Ltd. (Dachuan Energy) saw a decrease in both revenue and net profit in the first half of this year, with the net profit loss expanding to 1.174 billion yuan (RMB). Facing the loss, Dachuan Energy significantly reduced production capacity, but the effect was not satisfactory.
According to the “2025 Interim Report” of Dachuan Energy, in the first half of this year, the company achieved a revenue of 1.47 billion yuan, a decrease of 67.93% year-on-year; and a net profit of -1.174 billion yuan, a decrease of 71.1% year-on-year. In the same period last year, Dachuan Energy’s production of polycrystalline silicon was 50,821 tons, a decrease of about 60% year-on-year.
The report indicates that despite the significant production cutbacks, the net profit loss continues to widen, indicating that the improvement in operating conditions from the production reduction is very limited.
Public data shows that Dachuan Energy’s main business is the research, production, and sale of high-purity polycrystalline silicon, with an annual production capacity of 305,000 tons, making it one of the “Four Giants” in the mainland silicon materials sector. In the first half of this year, Dachuan Energy’s share of polycrystalline silicon production in the industry was 8.52%. However, its production in the first half of the year was only 50,800 tons, with a capacity utilization rate of only about one-third.
Furthermore, the interim report shows that in the first half of the year, Dachuan Energy’s main product was “high-purity polycrystalline silicon,” accounting for 97.75% of revenue. However, the gross profit margin for “high-purity polycrystalline silicon” was -36.41%, a significant drop compared to 2.2% in the same period last year, leading to a sharp deterioration in the company’s profitability. In terms of overall profit margins, in the first half of the year, Dachuan Energy’s gross profit margin and net profit margin were -34.05% and -78%, respectively.
The interim report also indicates that in the first half of this year, the unit cost of Dachuan Energy’s polycrystalline silicon reached 55.07 yuan/kg, an increase of 19.80% year-on-year, forming an inverted relationship with the unit selling price of 31.20 yuan/kg. This means the company incurs a loss of about 24 yuan for every kilogram of polycrystalline silicon sold.
In response to this, the Chinese macroeconomics and finance author “Kan Jian Finance” stated on September 17 that although Dachuan Energy has proactively reduced production, the oversupply issue in the photovoltaic industry cannot be easily solved simply by cutting production. It will take a long time to reduce inventory through production cuts and then drive prices back up.
Data shows that in the first half of this year, leading photovoltaic companies have proactively reduced production, with the operating rates of polycrystalline silicon, industrial silicon, and silicon wafers reaching historically low levels of 41.9%, 38.6%, and 44.3%, respectively. However, the prices of related products have not shown a significant rebound after the production reduction, with the average price in the first half of the year at 36,800 yuan/ton, down 28.8% year-on-year.