In recent years, an increasing number of solar energy companies have been caught in restructuring or bankruptcy due to overcapacity and brutal price wars. Zhejiang Aike New Energy Technology Co., Ltd. (referred to as ST Aikang), a subsidiary of ST Aikang, became the latest company to fall into bankruptcy restructuring.
According to the announcement released by ST Aikang on Monday, July 29th, creditor Jiangyin Kanda Packaging Products Co., Ltd. applied to Changxing Court for the bankruptcy restructuring of Aikang Optoelectronics, citing that Aikang Optoelectronics “cannot repay its due debts and lacks clear repayment capability.” The court accepted the bankruptcy restructuring application.
The recent financial data indicated in the announcement showed that as of April 30, 2024, Aikang Optoelectronics had total assets of 2.513 billion RMB (346.4 million USD), total liabilities of 1.562 billion RMB, and net assets of 951 million RMB.
The announcement stated that if the bankruptcy restructuring process is unsuccessful, it will be converted into bankruptcy liquidation.
According to Reuters, the decision to undergo bankruptcy restructuring by Aikang Optoelectronics came after financial problems surfaced in its parent company ST Aikang.
ST Aikang’s stock has been suspended from trading since June 19, as the closing price remained below 1 RMB (0.14 USD) for 20 consecutive days. On June 22, the Shenzhen Stock Exchange announced the termination of ST Aikang’s stock listing.
On June 14, the company announced the suspension of production of certain components due to sales and supply chain issues.
ST Aikang also cancelled its plan to exhibit at the largest annual industry conference at the last minute. On June 8, Aikang posted on WeChat that due to “internal reasons,” the company would withdraw from the International Solar Photovoltaic and Smart Energy Conference and Exhibition that was set to open on June 13.
With the exacerbation of oversupply, the prices of finished solar panels in China have significantly dropped, pushing many manufacturers into a situation where prices fall below production costs, squeezing profit margins.
The mid-year outlook report released by the China Photovoltaic Industry Association (CPIA) last week indicated that in the first half of 2024, the number of new solar energy manufacturing projects had dropped by over 75% year-on-year.
More than 20 projects in the planning or construction stages have been canceled or suspended, representing over 300,000 tons of polycrystalline silicon capacity, over 15 gigawatts (GW) of silicon wafer capacity, over 60 GW of solar cell capacity, and over 20 GW of component capacity.
According to data compiled by CPIA, the average utilization rate of cell and component factories is about 50% to 60%, with at least six companies suspending some domestic factory operations and two companies halting production at overseas factories.