TCL Zhonghuan plans to invest 1.26B yuan to acquire a controlling stake in Yida New Energy: the target's pre-investment valuation is 800 million yuan, with last year's revenue exceeding 9 billion yuan.

Reporter from The Daily Economic News｜Chen Pengli Editor from The Daily Economic News｜Wei Guanhong

This is an M&A integration in the photovoltaic industry that has drawn considerable attention.

On the evening of March 30, the photovoltaic silicon wafer giant TCL Zhonghuan (SZ002129, share price 9.11 yuan, market cap 36.83 billion yuan) disclosed in detail to the public the transaction plan involving its investment in Yidao New Energy Technology Co., Ltd. (hereinafter referred to as “Yidao New Energy”).

It is understood that TCL Zhonghuan plans to use a total cash amount of 1.258 billion yuan to ultimately obtain a 59.14% stake in Yidao New Energy through a combination of share transfers and capital increases. At the same time, TCL Zhonghuan will also, through accepting a voting-rights entrustment for the transferred shares, ultimately hold voting rights that correspond to a total of 66.34% of Yidao New Energy, thereby achieving absolute control.

It is noteworthy that in its announcement, TCL Zhonghuan disclosed that Yidao New Energy’s pre-deal valuation was only 800 million yuan. By the end of 2025, Yidao New Energy has been insolvent. Last year, the target company generated operating revenue of 9.279 billion yuan, and its net profit attributable to shareholders was -1.97 billion yuan, with the year-over-year loss narrowing.

This transaction by TCL Zhonghuan is intended to strengthen the company’s weaknesses in the battery module segment and to accelerate breakthroughs in new technology areas such as BC cells. However, amid the current situation where TCL Zhonghuan and Yidao New Energy are both losing money, whether this “bargain-basement” style acquisition can achieve synergy with “1+1>2” as scheduled remains to be answered by time.

According to TCL Zhonghuan’s announcement, the company recently signed a series of documents, including the “Share Transfer and Capital Increase Agreement,” with Yidao New Energy and its shareholders, and the detailed transaction terms have come to light.

TCL Zhonghuan will use 258 million yuan in cash to acquire, from 50 shareholders including Quzhou Zhidao Enterprise Management Partnership (Limited Partnership) and Suzhou Shanshi Equity Investment Partnership (Limited Partnership), a total of 8.06% of Yidao New Energy’s shares (before the capital increase). The announcement shows that the share transfer price is determined through differentiated pricing based on the respective shareholders’ entry (investment) costs.

At the same time, TCL Zhonghuan will inject 1.0 billion yuan of capital into Yidao New Energy, subscribing for 661 million new shares, to obtain 55.56% of Yidao New Energy’s shares after the capital increase. The pricing for this capital injection was determined through negotiation based on Yidao New Energy’s pre-deal valuation of 800 million yuan.

After the completion of both transactions, TCL Zhonghuan will cumulatively invest 1.258 billion yuan and directly hold 59.14% of Yidao New Energy’s shares. Meanwhile, TCL Zhonghuan will also accept voting-rights entrustments for a total of 7.2% of the shares held by shareholders, including founder Liu Yong and multiple employee shareholding platforms. By this point, TCL Zhonghuan will cumulatively control 66.34% of Yidao New Energy’s voting rights, and Yidao New Energy will also become its controlling subsidiary and be included in the scope of consolidated financial statements.

As a “photovoltaic dark horse” with experience in both N-type modules and BC cell technology, Yidao New Energy has previously attracted strong attention from the capital market. According to publicly available information, in December 2023 Yidao New Energy submitted its IPO application to the ChiNext board, with the original plan to raise 2.5 billion yuan for high-efficiency monocrystalline cell and module projects and to replenish working capital. Later, the sponsor withdrew the application, and its path to listing ended abruptly in August 2024.

Reporters from 《The Daily Economic News》 learned through inquiries that in July 2023, Yidao New Energy officially announced the completion of Pre-IPO financing. At that time, some media reports said that the post-investment valuation in that round of financing for Yidao New Energy was close to 8 billion yuan.

It is noteworthy that in this acquisition, both transaction parties are currently in a loss-making position. TCL Zhonghuan’s 2025 annual report shows that the company achieved operating revenue of 29.05 billion yuan that year, but net profit attributable to shareholders was -9.264 billion yuan, marking a second consecutive year of losses. However, while 2025 revenue continued to grow, the year-over-year loss narrowed. The financial report states that during the reporting period, the photovoltaic industry faced an imbalance in supply and demand, prices of products across the main industrial chain were adjusted at low levels, and the company’s operations continued to face significant pressure.

The acquired Yidao New Energy also faces pressure to turn profitable. According to the financial data most recently disclosed by TCL Zhonghuan, in 2025, the target company Yidao New Energy achieved operating revenue of 9.279 billion yuan and net profit attributable to shareholders of -1.97 billion yuan. Meanwhile, in 2024, Yidao New Energy’s revenue was 15.607 billion yuan and net profit attributable to shareholders was -2.611 billion yuan. By the end of 2025, Yidao New Energy’s total assets were 12.887 billion yuan and its total liabilities were 14.189 billion yuan.

In its announcement, TCL Zhonghuan clearly stated that “taking control” of Yidao New Energy is a strategic move to seize consolidation opportunities in the photovoltaic industry and to respond to the requirements for high-quality development in the sector. For TCL Zhonghuan, the core intention of this deal is to strengthen weaknesses in the industrial chain and to secure leadership in new technology areas.

The transaction is viewed as a key step for TCL Zhonghuan to accelerate breakthroughs in BC cell technology. TCL Zhonghuan, through its overseas subsidiary Maxeon that it controls, owns core patents for BC cells, while Yidao New Energy has accumulated experience in the processes and capacity for BC cell module manufacturing. TCL Zhonghuan stated that this investment is an important path to achieve synergy between the BC patented technology of the company’s controlling subsidiaries and the target company’s BC cell module processes and capacity, and it is also a strategic focus of the company.

Cover image source: Every Daily Media Resource Library

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