Shenzhen TrustHo Precision Technology Co., Ltd. (TrustHo Optoelectronics) plans to transfer 100% equity of its wholly-owned subsidiary Anhui Xinguang to Luxshare Precision. TrustHo Optoelectronics stated that the overall excess capacity in the photovoltaic industry has led to price competition and a significant decline in sales gross profit.
On June 22, TrustHo Optoelectronics announced that the company signed an “Intention Agreement for Equity Transfer” with Luxshare Precision on the same day. The agreement indicates that TrustHo Optoelectronics intends to transfer 100% equity of its wholly-owned subsidiary Anhui Xinguang Energy Technology (Anhui Xinguang) to Luxshare Precision.
TrustHo Optoelectronics explained that the overall excess capacity in the photovoltaic industry has resulted in a significant decline in sales gross profit. Transferring the 100% equity of Anhui Xinguang is expected to help the company optimize its industry layout and resource allocation, focusing on the glass protective screen business.
Anhui Xinguang is the main subsidiary of TrustHo Optoelectronics in the photovoltaic business. According to the 2024 annual report, the photovoltaic equipment and components business of TrustHo Optoelectronics incurred significant losses. In 2024, TrustHo Optoelectronics achieved operating income of 1.687 billion yuan, a year-on-year decrease of 2.72%, with a net loss attributable to shareholders of 353 million yuan, a year-on-year decrease of 972.54%; the net cash flow generated from operating activities was -90.948 million yuan, a year-on-year decrease of 171.37%.
In response, on June 22, the “Daily Economic News” cited TrustHo Optoelectronics’ explanation that the substantial losses in the photovoltaic equipment and components business are mainly due to the current excess capacity in the photovoltaic industry, leading to price competition, excess capacity, continuous increase in overseas inventory, continuous price decline, significant decrease in sales gross profit, and continuous increase in overseas related sales expenses and warehousing costs. Due to the overseas inventory price drop and overdue account receivables, the company has made significant provisions for asset impairment and credit impairment.
In addition, the 2023 annual report and 2024 semi-annual report of Anhui Xinguang show that the company achieved operating income of 78.5813 million yuan and 8.4891 million yuan respectively, with a net loss of 40.5237 million yuan and 54.6568 million yuan, respectively.
Anhui Xinguang was established in February 2023 with a registered capital of 100 million yuan. Its business scope includes the manufacturing and sales of new energy primary devices, photovoltaic equipment and components, as well as the production and sales of battery accessories. In May 2023, the company was acquired by TrustHo Optoelectronics.
Back then, TrustHo Optoelectronics stated that acquiring Anhui Xinguang could help the company quickly enter smart photovoltaics, smart energy, and other related fields but also noted that if Anhui Xinguang continues to incur losses, it may have a certain adverse impact on the company’s business performance.