Jolywood (Suzhou) Sunwatt Co., Ltd. (300393) has delivered a half-year report filled with paradoxes. On August 25, the company announced operating revenue of RMB 1.166 billion, a year-on-year decline of 64.71%, alongside a net loss attributable to shareholders of RMB 345 million. On the surface, these numbers paint a picture of a company being crushed by the industry. Yet, its net cash flow from operating activities swung to a positive RMB 382 million, a dramatic reversal from the negative RMB 447 million recorded in the same period last year. The shift represents a swing of over RMB 800 million within just twelve months.

Revenue collapse and cash flow recovery occurring simultaneously is an unusual combination. During an industry-wide cycle of capital drain, the question arises: is this a sign of survival capability, or merely a passive consequence of a contraction strategy? Meanwhile, the company's founder, Lin Jianwei, who established Jolywood in Changshu in 2008 and led it to a ChiNext listing in 2014, officially exited in June 2026 upon reaching the statutory retirement age. This departure is entangled with state-owned capital entry, failed performance commitments, and founder share sales to repay debts. These intertwined capital stories and operational data make the half-year report particularly complex to decipher.


The cash isn't earned - it's saved

During the first half of 2026, the photovoltaic industry experienced its coldest cycle on record. Domestic new installations fell approximately 66% year-on-year, price systems collapsed, and second and third-tier companies saw module quotes dip below RMB 0.7/W. Industry giants like LONGi forecast losses of RMB 3.4 to 3.8 billion, Tongwei lost RMB 5.1 billion, JA Solar lost RMB 2.6 billion, and JinkoSolar lost RMB 3 billion. In this capital-draining environment, how did Jolywood achieve positive cash flow?

The answer lies not in earning more, but in spending less. The company's operating cash flow improvement was directly attributed to reduced cash payments for goods purchased, services received, and various taxes. This is a textbook case of passive cash flow repair - it wasn't that collection from sales increased, but rather that procurement expenditures were slashed. Jolywood's business scale contracted from RMB 3.3 billion to RMB 1.166 billion, naturally reducing purchasing needs. Operating costs fell 64.27% year-on-year, roughly matching the revenue decline. With fewer expenses, cash flow naturally improved. Additionally, the company's notes receivable and accounts receivable decreased by 23.41% from year-end levels, indicating accelerated collections.

Comparing Jolywood's situation with peers reveals interesting divergences. JA Solar reported operating cash flow of RMB 861 million, but this represented a 80.90% year-on-year decline due to reduced sales collections from lower module sales volumes. JA Solar's cash flow deterioration stems from earning less. Jolywood's improvement comes from spending less. JinkoSolar achieved operating cash flow of RMB 682 million, up RMB 4.494 billion year-on-year, by retreating from low-margin markets and increasing investment in high-profit regions - a structural adjustment while compressing. Jolywood's RMB 382 million cash flow recovery is essentially a byproduct of substantial business contraction. The company acknowledged that its core business remains under pressure due to industry-wide overcapacity and significant product price declines. This is not proactive improvement from strategic adjustment, but a natural outcome of passive contraction.

The sustainability of these savings depends on how long the industry downturn lasts. The cost of this passive contraction is evident: Jolywood's domestic revenue in the first half of 2026 was just RMB 445 million, a steep 82.73% year-on-year drop. The photovoltaic application business generated only RMB 9.74 million in revenue, a 99.47% plunge, as the company explained that its earlier residential distributed EPC business had been suspended. Meanwhile, overseas revenue reached RMB 721 million, accounting for 61.87% of total revenue, making international markets the company's primary income source for the first time. While China's PV module exports grew 14.4% in the first half, Jolywood captured overseas market growth at the cost of losing its domestic business.


Namic technology as a future bet, but the industry needs the present

Three months before the half-year report, Jolywood held a mass production ceremony at its Taiyuan base, where the first Namic battery cell rolled off the production line. The company claims this battery achieves conversion efficiency exceeding 27%, on par with TOPCon technology. Its core selling point is "silver-free" manufacturing - replacing silver with aluminum, achieving reduced or zero silver usage on the backside. With silver prices at elevated levels, this represents an attractive cost-reduction direction. The company has mapped out a clear technology roadmap: Namic 1.0 reduces silver consumption by approximately 35%, 2.0 by around 60%, and 3.0 targets fully aluminum-based BC batteries. An 8GW capacity retrofit has already begun at the Shanxi base. In March this year, Jolywood also released a modified BC product, equally emphasizing "all-aluminum, silver-free" attributes. The technology narrative is complete and logically consistent.

The problem is timing. The entire industry was in a hard landing during the first half of 2026. In May alone, new installations fell 91% year-on-year, as the whole sector underwent capacity reduction and inventory destocking. In this environment, any new technology requires time to progress from mass production to revenue contribution - capacity ramping, customer validation, market promotion. Each step takes time, and time is precisely what the industry lacks most right now. Jolywood's high-efficiency battery average test efficiency has surpassed 27%, which is respectable from a product perspective. However, with market price systems already shattered, a few percentage points of efficiency advantage can hardly translate into profits at module prices of RMB 0.7/W. Furthermore, Jolywood is not an integrated company - it manufactures cells, modules, and backsheets, but lacks polysilicon and ingot-wafer segments. In industry price wars, integrated players can subsidize downstream losses with upstream profits. Jolywood has no such buffer. Namic technology may be one of Jolywood's long-term trump cards, but in the short term, the company still faces a difficult winter.


Founder exits, state capital stuck, performance bets outstanding

The central figure in Jolywood's capital story is founder Lin Jianwei. Born in 1966, Lin established the company in Changshu in 2008 and led it to a ChiNext listing in 2014. The company subsequently expanded from backsheets to N-type cells, modules, and distributed PV, with Lin serving as chairman throughout. In November 2022, Zhejiang Zheneng Electric Power signed agreements with Lin Jianwei and his wife Zhang Yuzheng. Zheneng Electric Power, Zhejiang Province's largest power generation company primarily focused on traditional thermal power, saw clear logic in acquiring Jolywood: the PV industry aligns with energy transition trends, and controlling Jolywood would allow it to share in renewable energy dividends while transitioning from pure thermal power to a coordinated thermal-plus-renewable portfolio, simultaneously avoiding industry incubation risks.

The transaction structure was: Zheneng Electric Power paid RMB 1.817 billion to acquire Zhang Yuzheng's 9.70% stake at RMB 17.18 per share, while obtaining voting rights corresponding to Lin Jianwei's 10% shareholding. Upon completion, Zheneng Electric Power held 9.70% of shares with 19.70% voting rights, becoming the controlling shareholder. Lin Jianwei committed that Jolywood's cumulative net profit attributable to shareholders would not be less than RMB 1.6 billion from 2022 to 2024. What followed exceeded everyone's expectations. In 2023, Jolywood recorded revenue of RMB 12.259 billion and net profit of RMB 527 million - respectable results. But in 2024, the industry took a sharp downturn, and the three-year cumulative net profit only reached 4.47% of the commitment. A performance compensation payment of RMB 148 million fell on Lin Jianwei.

In February 2026, the voting rights entrustment expired. Lin Jianwei relinquished voting rights for all his 16.36% shareholding for a 36-month period. In June, having reached statutory retirement age, he ceased holding any position at the company. To raise funds for the compensation payment, Lin reduced his holdings by approximately 32.6791 million shares between March and May, cashing out over RMB 300 million. On June 26, he made the first installment payment of RMB 40 million, still owing approximately RMB 108 million. Looking back, no one came out ahead in this transaction. Zheneng Electric Power entered at RMB 17.18 per share, investing RMB 1.817 billion. By August 2026, Jolywood's share price had fallen to the RMB 6 range, representing a book loss exceeding 60%. In 2024, Zheneng Electric Power had already recorded goodwill impairment of approximately RMB 496 million related to the acquisition. Lin Jianwei, meanwhile, lost the company he founded and carries RMB 108 million in debt. After all the turmoil surrounding Jolywood's control and continuous insider selling, the last thing a company weathering an industry winter needs is this kind of uncertainty.

In my assessment, the most interesting element in Jolywood's half-year report is not the RMB 345 million loss, but the RMB 382 million positive cash flow. In an industry-wide capital drain cycle, the ability to stop the bleeding is itself a capability. But this money wasn't earned - it was saved. Revenue cut by 60%, domestic business halved, residential EPC business eliminated - the company exchanged this level of contraction for cash flow safety. The Namic technology sounds promising, but the industry doesn't need the future right now; it needs cash flow to survive the present. The founder has departed, state capital is trapped, and the performance bet tail hasn't been fully settled. Positive cash flow is good news, but until industry consolidation completes, the distance between "positive cash flow from saving" and "positive cash flow from earning" could well be the difference between life and death.