China’s photovoltaic industry is currently facing an unprecedented “winter.” With debts reaching nearly 30 billion yuan, “Runyang Corporation,” which once ranked third globally in photovoltaic cell production, is attempting to use a debt-to-equity swap to relist on the stock market in order to secure its survival. However, experts say it will be challenging, given the unfavorable overall situation in the photovoltaic industry and the urgent financial situation at the local level.
Recently, Xizhuang Corporation proposed a debt-to-equity swap to acquire about 0.26% equity of Runyang Corporation and establish a new limited partnership enterprise as a holding platform with other investors, with a total debt-to-equity swap amount of 2.96 billion yuan.
The commitment associated with the debt-to-equity swap is that “Runyang Corporation promises to complete its IPO or be merged into an A-share listed company by the specified deadline.” Public information indicates that the deadline for achieving the IPO is set at December 31, 2028.
Up to now, a total of seven companies have participated in Runyang Corporation’s debt-to-equity swap, with the total amount exceeding 1.6 billion yuan. Based on publicly available data, the pre-investment valuation is estimated to be around 8 billion yuan, much lower than the planned valuation of 40 billion yuan during the IPO.
According to insiders, there are still enterprises in contact with Runyang Corporation, intending to become the next shareholder through this method.
However, an industry practitioner in the photovoltaic industry quoted by “Chinese Entrepreneur” magazine expressed doubts, stating that Runyang Corporation is accumulating debt intensively for the purpose of IPO, but going public with such a high debt burden presents clear challenges.
Fang Wenzheng, a photovoltaic industry chain analyst at Longzhong Information, mentioned that the development of the photovoltaic industry in the next five years is unpredictable, and Runyang Corporation’s ability to stay in the market ultimately depends on its profitability.
Established in 2013, Runyang Corporation is a company headquartered in Yancheng City, Jiangsu Province, focusing on the research, production, and sale of high-efficiency solar cells and components.
Since 2019, Runyang Corporation has consistently ranked among the top five in global cell shipments. By 2020, it had climbed to third place globally, following only Tongwei Corporation and JinkoSolar. It maintained this position for three consecutive years until 2022.
In 2022, amidst its upward trend, Runyang Corporation initiated plans for an IPO with a fundraising target of 4 billion yuan, reaching an overall valuation of 40 billion yuan. Despite facing setbacks and accumulating more than 6.5 billion yuan in valuation through two rounds of pre-investment by the end of 2022, the company planned to raise capital again in less than six months. Tang Jun, known as the “Golden Finger” in the industry, joined Runyang Corporation as the president.
In 2023, new photovoltaic installations reached 216 GW, nearly equivalent to the total of the previous four years. Leading companies, such as Tongwei Corporation, JinkoSolar, and Longi Green Energy, continued expanding production in 2023, with a cumulative investment budget of nearly 300 billion yuan.
However, due to overcapacity and continuous price declines, the photovoltaic index experienced a more than 40% drop in 2023 following the ‘post-boom’ period. Runyang Corporation, once ranked third globally in cell shipments, slipped to fourth place in the first half of the year and further to fifth by the end of the year. In June 2024, the registration approval for its IPO expired.
In May 2024, Runyang Corporation’s US subsidiary faced accusations of patent infringement from Tenergy Solar; in June, its IPO registration materials expired, and from July onwards, it was frequently involved in court litigation as a defendant.
Simultaneously, news surfaced about several of Runyang Corporation’s facilities halting production. According to InfoLink’s data for the first half of 2024, the company dropped out of the top five in global cell shipments. As of December 31, 2024, its total assets were valued at 36.42 billion yuan, with total liabilities amounting to 28.996 billion yuan, resulting in a net asset value of 7.424 billion yuan. With a total assets-to-liabilities ratio of nearly 80%, the company reported a net loss of nearly 0.9 billion yuan for the year.
Multiple suppliers have now taken legal action against Runyang Corporation.
Following the failed IPO plans in 2024, Runyang Corporation found itself in operational distress, grappling with significant debt burdens and other issues. Thus, it adopted the debt-to-equity swap model, becoming one of the prominent players in China’s recent “largest photovoltaic acquisition case.”
On August 13, 2024, Tongwei Corporation issued a statement announcing an intent agreement with Runyang Corporation and related parties, as well as Jiangsu Yueda Group, to increase investments totaling no more than 5 billion yuan, aiming to collectively acquire at least 51% of Runyang Corporation’s shares.
By the end of September 2024, Yancheng State-owned Jiangsu Yueda Group injected 1 billion yuan into Runyang Corporation, becoming the largest single shareholder. The company’s chairman transitioned from Tao Longzhong to Zhang Naiwen.
However, by February 14, 2025, Tongwei Corporation decided to discontinue its intended investment in Runyang Corporation. Nevertheless, Yueda Group’s capital injection provided some financial support to Runyang Corporation.
Subsequently, on February 25, 2025, listed companies Jouwalth and Aotewei announced plans to increase investments in Runyang Corporation by 720 million yuan and 180 million yuan, respectively, through debt-to-equity conversions. With the support of Jiangsu Yueda Group, Runyang Corporation restarted its IPO listing plan.
Throughout its development, Yancheng State-owned Yueda Group has played a pivotal role in Runyang Corporation’s operations. In 2020, the company’s operational base was relocated from Kunshan to Yancheng Economic Development Zone.
Amidst the current debt restructuring and debt-to-equity conversions, Yueda Group and its holding companies continue to stand behind Runyang Corporation’s founder, Tao Longzhong, as “supplementary obligors.” In scenarios where the main obligation party fails to meet debt obligations or is incapable of debt repayment, supplementary obligors are liable proportionally. This structure is seen as a core foundation for Runyang Corporation to convert debts through equity swaps.
Chinese public account “Carbon Rush” recently noted that state-owned enterprise Yueda has taken complete control of Runyang Corporation, with many old team members leaving or stepping back, including Tang Jun, who was overseeing troubleshooting within the company.
However, concerns have been raised within the industry due to the strong takeover by state-owned Yueda, as excessive involvement from local governments could prolong and complicate the industry reshuffle. The article also pointed out that while Runyang had debts owed to suppliers, the affiliated companies of major shareholders had been consistently profiting through Runyang. This pattern of the company’s funds being used for the benefit of shareholders occurred frequently in the photovoltaic industry. When an enterprise encounters issues, major shareholders often shield themselves from losses…
The article highlights the challenges faced by Runyang Corporation in successfully entering the A-share market against the backdrop of the current unfavorable conditions in the photovoltaic industry.
Against the backdrop of China’s continuing economic downturn, the country’s photovoltaic sector is undergoing an unprecedented “winter,” with the overall situation of losses becoming more severe.
In 2024, 64 listed photovoltaic companies reported a shift from profits of around 100 billion yuan in 2023 to losses of approximately 30 billion yuan. The total revenue of listed photovoltaic companies in 2024 was 931.096 billion yuan, a significant decrease of 22.4% compared to the previous year. Several formerly successful companies with billion-yuan revenues had disappeared by 2024. The industry’s overall net profit declined dramatically from 104.955 billion yuan in 2023 to a loss of 29.757 billion yuan in 2024.
Despite official efforts to promote “controlling assets” and combating internal competition, various segments of the industry remain mired in financial losses. On July 14, 2025, nearly 1500 listed companies released interim performance forecasts for the year, with over 820 companies expressing performance concerns (forecasted decrease, continued losses, first losses, slight decreases).
Chinese economist Li Hengqing mentioned that both the photovoltaic and new energy vehicle industries, which are strongly supported by the Chinese government, are facing significant challenges. Companies like BYD are experiencing considerable losses and may face collapse at any time, similar to what Evergrande Group has encountered in the new energy vehicle sector. Runyang’s current crisis mirrors this trend. The primary focus of any business should be profit generation, which is no longer the case for many companies due to excessive debt, making fundraising difficult. Therefore, they opt for debt-to-equity swaps to convert debt into shares and work towards paying off debts through year-end bonuses. If companies eventually go bankrupt, creditors may face significant losses, hence, agreeing to this method.
“This method allows Runyang to temporarily alleviate debt pressures but given the unfavorable market conditions for photovoltaic enterprises, marked by significant losses, China, despite leading in such industries globally, faces resistance from the international community due to dumping practices that undermine local companies in various countries,” he stated.
Sun Guoxiang, a professor at Nan Hua University’s Department of International Affairs and Business, also expressed concerns that in China’s capital market, there exists a grey area of high-risk symbiotic relationships between private enterprises and creditors. Debt-to-equity swaps were originally designed to resolve non-performing assets and alleviate debt pressure but have unfortunately become temporary solutions, failing to address underlying issues of asset liquidity and cash flow disruption.
Sun also mentioned that in China, asset reorganizations and debt extensions often involve strong personal relationships and influence from banks, local governments, and companies, forming networks of interrelations rather than operating based on market rules. Debt-to-equity swaps often become more politically and relationally driven operations rather than purely financial engineering. In the absence of a market-based clearing mechanism, the practice perpetuates a cycle of rolling debt and lacks a sustainable resolution for zombie enterprises relying solely on a “penny saved” mechanism.
Regarding the support provided by local state-owned enterprises to aid Runyang Corporation, Li Hengqing suggested that with vast majorities of provincial and municipal finances facing deficits, local governments have no choice but to rely on state-owned enterprises to rescue the photovoltaic industry. However, with state-owned enterprises facing their own operational challenges, every sector is in dire need of support, and the outcome may ultimately lead to insufficient rescue efforts.
Sun Guoxiang also acknowledged that as local hidden debts continue to accumulate and land finances exhaust, the pressure to exchange debts grows, and the government is unlikely to fully intervene.