Against the backdrop of rising silver prices and a rush for exports, leading photovoltaic module manufacturer Jinko Solar (SH688223, stock price 5.96 yuan, market cap 59.6 billion yuan) has made a significant move.
On the evening of January 16, Jinko Solar announced that its controlling subsidiary, Jinko Solar (Haining) Co., Ltd., plans to implement a capital increase and expansion and introduce strategic investors including Xingyin Financial Asset Investment Co., Ltd. and China Orient Asset Management Co., Ltd. The parties intend to make a total cash capital injection of up to 3 billion yuan, collectively acquiring no more than 24.6771% of the equity in Haining Jinko post-capital increase. The funds raised will primarily be used by Haining Jinko to repay financial liabilities or operational debts.
This marks another instance, following Tongwei Co., Ltd., of a major PV player utilizing subsidiary capital increases for financing. If this capital increase is successfully completed, it could potentially help create necessary financial space for Jinko Solar's subsequent technology iterations, particularly for its new-generation high-efficiency TOPCon modules and TOPCon silver-coated copper technology, both of which require substantial capital investment.
From this perspective, this move represents a crucial strategy for Jinko Solar to break out from the intensely competitive "red ocean."
As of June 30, 2025, the audited owner's equity of Haining Jinko was 8.672 billion yuan. Based on an assessment report from a third-party evaluator, and considering factors such as Haining Jinko's market competitiveness and profits/losses during the transition period for the capital increase, and after negotiation with the strategic investors, the planned pre-increase equity valuation for Haining Jinko was set at 9.157 billion yuan as the benchmark for a total capital injection of up to 3 billion yuan.
After the capital increase, strategic investors including Xingyin Asset and Orient Asset will collectively acquire no more than 24.6771% of the equity. Jinko Solar will still directly and indirectly hold no less than 68.9419% of Haining Jinko's equity, and Haining Jinko will continue to be consolidated within the company's financial statements.
It is reported that Haining Jinko is a key manufacturing base for Jinko Solar in East China, focusing on the R&D and production of high-efficiency solar cells and modules, with an intelligent production line project capable of producing 11GW of high-efficiency cells and 15GW of high-efficiency modules annually.
As of September 30, 2025, Haining Jinko had total assets of 20.537 billion yuan, net assets of 8.476 billion yuan, and an asset-liability ratio of approximately 59%. At the listed company level, as of the end of the third quarter of 2025, Jinko Solar's asset-liability ratio was 74%.
Notably, for the first three quarters of 2025, Jinko Solar's net cash outflow from operating activities was 1.341 billion yuan; net cash outflow from investing activities was 1.772 billion yuan, while net cash inflow from financing activities was 1.451 billion yuan. Consequently, Jinko Solar's cash and cash equivalents saw a net decrease of 1.681 billion yuan.
The 2025 interim report showed that Jinko Solar's cash and cash equivalents were still experiencing a net increase in the first half of 2025. This indicates that Jinko Solar's funding pressure intensified significantly in the second half of 2025, with the turning point from positive to negative cash flow likely closely related to the deepening price war in the industry and the decline in profitability at the module segment.
Against this backdrop, introducing strategic investors can not only alleviate short-term debt repayment risks but also enhance financial institutions' confidence in the Jinko group and optimize its financing structure.
Jinko Solar stated that the planned capital increase and introduction of strategic investors for its subsidiary Haining Jinko is a prudent decision based on its future business development and strategic planning. It is beneficial for optimizing Haining Jinko's capital structure, reducing its asset-liability ratio, and bolstering its cash flow. The funds will primarily be used by Haining Jinko to repay financial or operational liabilities.
Jinko Solar disclosed that this capital increase aims to strengthen Haining Jinko's capital base, optimize the company's asset structure and resource allocation, improve asset operational efficiency, and firmly grasp the development opportunities within the photovoltaic industry.
The so-called "development opportunities" likely lie in creating a technological gap with numerous other TOPCon manufacturers through increased capital expenditure.
CSC Financial believes that the current industry consolidation depends firstly on policy, and secondly on new technology iterations. For instance, the upgrade to new-generation TOPCon products and the deployment of BC capacity both require substantial capital expenditure. However, at the bottom of the industry cycle, many companies lack sufficient funds and technical reserves for capacity upgrades, leading to the gradual phasing out of obsolete capacity that cannot secure orders.
This implies that TOPCon manufacturers increasing capital expenditure, utilizing technologies like passivated edge, 0BB, to enhance the light conversion efficiency of TOPCon products, can create a technological generation gap with other TOPCon players and capture market share for high-efficiency products.