China’s photovoltaic (PV) equipment industry has delivered its strongest results in years, signaling a tentative recovery for the once-battered solar manufacturing chain.
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With third-quarter earnings now out, a sector that had been in deep losses has swung back into profit — albeit modestly — as companies slash costs and benefit from a rebound in polysilicon prices.
According to financial data from Choice, the 78 companies tracked in the photovoltaic equipment sector posted a combined net profit of 758 million yuan ($104 million) in the third quarter, compared with a net loss of 4.2 billion yuan in the second quarter. The turnaround ends a prolonged slump dating back to late 2023, when the industry’s profits collapsed from nearly 30 billion yuan in a single quarter to losses exceeding 1.6 billion yuan.
The pain continued through most of 2024, with price declines across the industry chain, costly equipment upgrades, and heavy impairment charges tied to obsolete capacity. The sector even recorded a staggering 27.8 billion yuan loss in the fourth quarter of 2024, its worst performance in a decade. Against that backdrop, even a sub-1-billion-yuan profit in Q3 now counts as a milestone achievement.
Nearly half of the companies tracked — 39 in total — reported quarter-on-quarter improvements, narrower losses, or outright profit reversals. Notably, Hongyuan Green Energy, Daqo New Energy, Shuangliang Eco-Energy, and GCL System Integration all returned to the black in Q3.
Ten firms recorded profit growth of more than 100%, led by GoodWe, the inverter manufacturer, which saw its net profit soar nearly 7.6 times from the prior quarter. After reporting a small loss in Q1 and a modest 11 million yuan profit in Q2, GoodWe’s earnings surged to 97 million yuan in Q3.
Inverter producers remained the industry’s strongest profit engine. Sungrow Power Supply, whose market capitalization has recently hit a record high, reported 4.15 billion yuan in net profit in the third quarter, up 6.1% from Q2 — the only firm to post a single-quarter profit above 1 billion yuan. Deye Technology ranked third in the sector with 825 million yuan, while Ginlong Technologies earned 263 million yuan, placing ninth. However, both companies saw weaker quarter-on-quarter momentum, with Deye edging up just 1% and Ginlong falling 35%.
Equipment and auxiliary material suppliers also showed resilience. Jiejia Weichuang, which sells production tools to PV cell makers, earned 858 million yuan, slightly down from Q2 but still the second-highest profit across the industry. Flat Glass, Maxwell Technologies, and Jinggong Science & Technology each posted over 200 million yuan in profits, signaling solid underlying demand and restocking activity along the supply chain.
While the upstream material makers still dominate the sector’s revenue share, their recovery remains fragile. Aside from Canadian Solar, which has diversified into energy storage, most integrated giants continued to post heavy losses.
Among the six largest material producers by revenue — LONGi Green Energy, Tongwei, Trina Solar, JinkoSolar, TCL Zhonghuan, and JA Solar — all but JA managed to narrow losses in Q3, with reductions generally exceeding 20%. Tongwei stood out with a dramatic rebound: its net loss shrank from 2.59 billion yuan in Q1 and 2.36 billion yuan in Q2to just 315 million yuan in Q3, helped by a sharp rise in polysilicon prices.
Polysilicon prices jumped 45% during the third quarter, driven by what Chinese analysts call a series of “anti-involution” measures — efforts by the government and industry leaders to curb destructive price competition. The rally boosted margins for upstream firms such as Daqo New Energy, which swung to a 74 million yuan profit in Q3 after a 1.15 billion yuan loss in the first half.
Wafer manufacturers also benefited from the turnaround, with prices rising around 40% during the period. LONGi Green Energy and TCL Zhonghuan, which together dominate the wafer market, both sharply reduced their losses. LONGi even signaled that it expects to return to profitability in the fourth quarter, after trimming its Q3 loss to 834 million yuan from over 1 billion yuan in each of the previous two quarters. Shuangliang Eco-Energy and Jingsheng Mechanical & Electrical, another major equipment supplier, also managed to swing back into profit.
Despite the rebound, analysts warn that structural challenges persist. Total industry revenue fell 4.2% from the second quarter, reflecting subdued end-market demand following the rollout of policy curbs such as the so-called “Document 136.” Module prices — a key downstream product — remain at historical lows, weighing heavily on firms like JA Solar, which rely on module sales for the bulk of their income.
Aiko Solar, which had briefly regained profitability in Q2, slipped back into loss in Q3, underscoring how fragile the recovery remains.
Even some of the quarter’s top performers face scrutiny. Hongyuan Green Energy, which staged one of the fastest comebacks, reporting 532 million yuan in profit after a 297 million yuan loss in the first half, has been embroiled in controversy. The company, once dubbed a “Mini LONGi” for its aggressive push into vertical integration, was rumored to have been removed from an industry “self-discipline list” for underbidding — a claim it denied.
Hongyuan attributed its strong results to higher product prices and increased shipments, but some analysts argue the improvement may reflect inventory timing gains rather than sustainable growth.
As the solar sector navigates its latest cycle of consolidation and policy shifts, the Q3 results offer both relief and caution. The modest recovery shows that China’s photovoltaic supply chain — from polysilicon to inverters — retains resilience, yet the volatility of pricing, policy, and demand still looms large.
In the words of one industry analyst, “This quarter marks a pause in the decline, not a full recovery. The real test will come in 2026, when capacity upgrades and global trade pressures converge again.”
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