TCL Zhonghuan's high-difficulty gear shifting at the bottom of the cycle
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Author | Huang Yu
On the evening of April 27, TCL Zhonghuan released its first quarter 2026 financial report. Against the backdrop of the photovoltaic industry continuing the deep “involution” of 2025, this financial report still reveals the tough reality of PV companies' survival: slight increase in revenue, ongoing losses.
The report shows TCL Zhonghuan achieved 6.549 billion yuan in revenue in the first quarter of 2026, up 7.34% year-on-year; net loss attributable to shareholders was 1.647 billion yuan.
Although still in the red, the loss narrowed compared to the same period last year (loss of 1.906 billion yuan), with a quarter-on-quarter improvement of 52.8%.
In the first quarter, TCL Zhonghuan generated net cash flow from operating activities of about 304 million yuan, down 37.97% year-on-year, mainly due to increased production, higher procurement payments, and decreased government subsidies compared to last year.
For TCL Zhonghuan to truly turn the tide and achieve profitability, it must continue to further expand its performance growth, but for now, the revenue growth in the first quarter does not appear to be sustainable.
The revenue increase for TCL Zhonghuan in the first quarter benefited largely from a surge in demand driven by adjustments to the export tax rebate policy.
Starting April 1, 2026, China officially canceled export tax rebates on photovoltaic and other products. To lock in profits before this policy benefit disappeared, overseas customers exhibited obvious “rush order, rush installation” behavior in the first quarter.
According to InfoLink's compilation of China Customs data, in March 2026, China's exports of PV modules and cells both surged; modules were driven by Asia-Pacific and Europe, while cell exports saw notable growth in Africa in addition to Asia-Pacific.
In PV modules, China exported about 37.32 GW in March 2026, a sharp increase of about 123% from February’s 16.75 GW, and up about 60% from 23.38 GW in March 2025. Cumulatively from January to March 2026, China exported about 71.42 GW of PV modules, up about 15% from 61.89 GW in the same period last year.
InfoLink Senior Analyst Amy Fang said that March's export data “clearly reflects the concentrated shipment trend before the April policy adjustment.”
She also mentioned that the distribution of export regions changed: in March, Asia-Pacific imports were about 13.82 GW, 37% of the total exports, surpassing Europe for the first time; Europe imported about 13.05 GW, or 35%; Americas and Africa each imported about 4.4 GW; the Middle East followed closely with 1.62 GW.
Fang believes this regional distribution indicates that the surge in March exports was not due to an overall acceleration in terminal demand but resulted from early stocking before the policy change. Market attention has now shifted to whether second-quarter demand can absorb the concentrated shipments from the previous period, with the focus moving from “rush export installations” to price trends, cost transmission, and inventory digestion.
This “head start” supported first-quarter shipment volumes but may also signal a temporary “cliff” in overseas demand for the second quarter.
TCL Zhonghuan pointed out that tax policy adjustments provided short-term support for PV industry demand, but supply and demand remain severely imbalanced, and prices of silicon materials and wafers continue to weaken; meanwhile, the prices of major raw materials have risen, and module makers are raising prices to ease cost pressures, yet the main links in the supply chain remain at the bottom of the cycle.
For TCL Zhonghuan, maintaining bargaining power in the global market after the tax rebate policy adjustment will be a tough battle going forward.
Facing the price war in the wafer segment, Zhonghuan is accelerating its escape from the “homogenization” quagmire. On March 30, Zhonghuan announced it planned to acquire control of Yida New Energy for 1.258 billion yuan, which has become the most watched variable after the first-quarter report.
Yida New Energy has a mature process in BC (back contact) cell modules, which complements Zhonghuan’s accumulated BC patents.
In the past, Zhonghuan was known as a “wafer giant,” but relatively weak in modules. By integrating Yida New Energy, Zhonghuan is trying to strengthen the “wafer-cell-module” BC integrated closed loop, directly competing in high-margin markets.
But the challenges of integration cannot be ignored. Yida New Energy lost 1.97 billion yuan in 2025 and is in negative asset status.
It can be said that Zhonghuan’s “bottom fishing” at this time is not just a technical marriage, but an extreme test of its capital management and integration capabilities.
Faced with no obvious improvement in market transaction sentiment, breaking the “involution” style competition remains a challenge for the entire photovoltaic industry.
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