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Cell producer halts 10 GW TOPCon project amidst industry challenges

Chinese company Sunflower (300111.SZ) has decided to halt its 10 GW TOPCon solar cell facility project. The unexpected move comes after discussions with project partners and amidst changing dynamics in the solar industry.

Cell producer halts 10 GW TOPCon project amidst industry challenges

Sunflower, known for its pharmaceutical and solar ventures, shared its intention to terminate the project agreement with collaborators like Shanghai Longxiang Private Equity Fund Management, Shanghai Longhe Enterprise Management Center, Shaoxing Binhai New Area Integrated Circuit Industry Equity Investment Fund, and Zhejiang Longxiang New Energy Technology.

Established in 2005, Sunflower focuses on pharmaceuticals and entered the solar sector in 2023.

The company’s 2023 performance outlook forecasts a net profit between 19 and 27 million yuan, indicating a significant improvement from the previous year’s loss. However, the net profit excluding non-recurring items is expected to face a deficit ranging from 10.5 to 18.5 million yuan.

Sunflower initially revealed plans for the 10 GW TOPCon solar cell production line on March 14, 2023.

The project included a 5 GW initial phase with a total investment of approximately 1.5 billion yuan. Sunflower contributed 270 million yuan, holding a 54% stake. Other partners also made substantial contributions.

The decision to terminate follows scrutiny from the Shenzhen Stock Exchange, which raised concerns about the project’s relevance, alignment with business strategies, uncertainties in implementation, and subsequent risks. Sunflower responded comprehensively to these inquiries.

Despite completing capital injections and addressing regulatory concerns, Sunflower cites challenges in the second half of 2023.

Industry data reveals a nearly 40% drop in the average price of 182 mm TOPCon solar cells.

Experts anticipate further price declines in 2024, posing challenges and risks for solar projects. Sunflower’s decision to cancel the project aims to mitigate risks, optimize resources, and streamline operations, said the company.

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