Investment Value Analysis of Tongwei Co., Ltd. and Hesheng Silicon Industry Co., Ltd.

Based on comprehensive data obtained, I provide the following systematic analysis:

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• Current Stock Price
  : 21.80 CNY (↑1.96%)
• Market Capitalization
  : 95.93 billion CNY
• P/E Ratio
  : -11.51x (in loss status)
• P/B Ratio
  : 2.19x
• ROE
  : -18.28% (deep loss)
• Net Profit Margin
  : -9.44%
• Current Ratio
  : 1.24
• Quick Ratio
  : 0.99

: Conservative accounting treatment; investments are not yet fully mature, with room for improvement as production capacity is released [0]

• Current Stock Price
  : 54.96 CNY (↑3.37%)
• Market Capitalization
  : 64.43 billion CNY
• P/E Ratio
  : -1,820x (severe loss)
• P/B Ratio
  : 2.01x
• ROE
  : -0.11% (close to break-even)
• Net Profit Margin
  : -0.16%
• Current Ratio
  : 0.31
• Quick Ratio
  : 0.11

: Neutral accounting treatment, but with high short-term liquidity pressure and a low quick ratio [0]

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:

The chart above shows a four-dimensional technical comparison of Tongwei and Hesheng from the beginning of 2024 to the end of 2025:

• Top-left & Top-right
  : Closing prices and 20/50/200-day moving averages of the two companies. Tongwei’s stock price fluctuates around MA20 (current 21.80 CNY, about +0.95% from MA20); Hesheng’s stock price runs above MA20 (current 54.96 CNY, about +3.70% from MA20), showing relatively stronger short-term performance.

• Bottom-left
  : RSI(14) comparison. Tongwei’s RSI is around 49.2, in the neutral range; Hesheng’s RSI is around 56.0, slightly bullish but not entering overbought territory (above 70), indicating that bullish momentum is slightly dominant.

• Bottom-right
  : Cumulative return comparison since 2024. Tongwei’s cumulative return is about -12.8%, Hesheng’s about +8.0%, indicating that Hesheng’s relative performance over the past year is better.

:

• Tongwei
  : Annualized volatility of 44.72%, Beta=0.7, lower than market volatility; currently in a sideways consolidation phase, support level at $21.39, resistance level at $22.21 [0]
• Hesheng
  : Annualized volatility of 38.35%, Beta=0.25, extremely low volatility; technical side is sideways, MACD golden cross is bullish, but RSI has overbought risk, support level at $53.00, resistance level at $55.93 [0]

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:

:

1. Industry Position Advantage
   :
   • Global polysilicon leader, cost control capability leading the industry
   • Integrated production capacity advantage (upstream industrial silicon → polysilicon → battery cells)
   • Already close to break-even point in Q3 2024 (ROE significantly narrowed from -18%) [0]

2. High Price Sensitivity
   :
   • User assumption: If polysilicon average price reaches 60,000 CNY/ton → can achieve 20% gross margin and about 15% ROE
   • High profit elasticity; a small price recovery can turn losses into profits

3. Better Financial Health
   :
   • Current ratio of 1.24, quick ratio of 0.99, short-term debt repayment ability is acceptable [0]
   • Relatively stable cash flow, positive free cash flow [0]

:

• If polysilicon prices remain sluggish, profit recovery will be delayed until Q4 2025
• Price wars may intensify during capacity clearance

:

:

1. Business Diversification
   :
   • Dual main businesses of industrial silicon + organic silicon, strong anti-cycle ability
   • Expected ROE recovery of 5-8%, profit improvement is relatively moderate

2. Stock Price Relatively Resistant to Decline
   :
   • Since 2024, stock price has risen +8.02%, significantly better than Tongwei’s -12.80% [0]
   • Market has higher recognition of its profit stability

:

1. Low ROE Ceiling
   :
   • Expected ROE is only 5-8%, significantly lower than Tongwei’s target of 15%
   • “Price-to-Earnings Rate” (PR) value is relatively high (1.9-5.0), insufficient valuation attractiveness

2. Liquidity Pressure
   :
   • Current ratio only 0.31, quick ratio 0.11, short-term capital chain tight [0]
   • May limit the speed of profit improvement

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:

The chart above conducts multi-dimensional comparisons and scenario simulations around the “Price-to-Earnings Rate” (PR=PE/ROE/100):

• Top-left
  : Comparison of comprehensive valuation indicators (P/B, market capitalization scale, price position in 52-week range, volatility, RSI). Hesheng is more attractive in terms of P/B and market capitalization scale; Tongwei is neutral in RSI and price position; the two have similar volatility.

• Top-right
  : PR heatmap. Calculating PR values with different PE multiples and ROE combinations: in Tongwei’s scenario, ROE=15% and PE=20x correspond to PR≈1.33, PE=30x corresponds to PR≈2.0 (green-yellow range); if Hesheng’s ROE is only 5-8%, PR value will be significantly higher under the same PE (color tends to red/warm), with lower valuation cost-effectiveness.

• Bottom-left
  : ROE recovery path simulation (illustrative). Tongwei is expected to approach break-even in Q3 2024, turn slightly positive in Q4 2024, and move towards the 10-15% range in Q2-Q3 2025; Hesheng’s improvement slope is flatter, with expected ROE of about 5-8% in 2025. The inflection point is roughly in Q4 2024-Q1 2025.

• Bottom-right
  : Multi-dimensional investment value score (1-10 points). Tongwei scores higher in profit recovery speed, industry position, cost advantage, and technical barriers; Hesheng is slightly better in market capitalization elasticity. Tongwei has an overall advantage in total scores (50 points vs 35 points).

:

• Tongwei
  : If it recovers to 15% ROE, reasonable PE is 20-30x → PR value of 1.3-2.0 →
  Undervalued Range
• Hesheng
  : If it recovers to 5-8% ROE, reasonable PE is15-25x → PR value of1.9-5.0 →
  Reasonable to Slightly Overvalued Range

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##5. Investment Strategy Recommendations

:

• Time Window
  : Q1-Q2 2025
• Price Range
  : Pullback to20-21 CNY (close to the 200-day moving average support level of $20.35)

:

1. High profit elasticity; a rebound in polysilicon prices will bring rapid ROE repair to15%+
2. PR is in the undervalued range, sufficient safety margin
3. After industry clearance, leading position is consolidated, long-term competitive barriers are enhanced

:

• Strict stop-loss: Break below19.5 CNY
• Position control: No more than 20% of the portfolio
• Diversified investment: Match with other industries to hedge against photovoltaic cycle risks

:

1. Limited ROE recovery space (5-8% ceiling)
2. High short-term liquidity pressure, high financial risk
3. PR valuation advantage is not obvious, cost-effectiveness is worse than Tongwei

:

• Stock price pulls back below50 CNY
• Liquidity situation improves (current ratio回升 to above0.6)
• Organic silicon industry shows clear prosperity inflection point signals

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##6. Forward-looking Indicators for Industry Inflection Points

:

1. Polysilicon Spot Price
   : Break through65,000 CNY/ton and stabilize
2. Industry Inventory Level
   : Downstream silicon wafer/battery cell inventory is cleared to a reasonable level
3. Capacity Clearance Progress
   : Accelerated shutdown of backward capacity, increased industry concentration
4. Demand-side Recovery
   : Domestic installation data, export orders pick up
5. Company Financial Report Verification
   : 2024Q4/2025Q1 results confirm profit inflection point

: Tongwei Co., Ltd.'s profit reversal inflection point is expected to arrive in Q2-Q32025, while Hesheng Silicon Industry will be delayed until Q3-Q42025. From the perspective of PR and profit elasticity, Tongwei has more investment value; it is recommended to adopt the “undervalued + diversified” strategy, focus on allocating Tongwei, and participate in Hesheng cautiously.

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[0] Gilin API Data - Financial Data, Technical Indicators, Market Data of Tongwei Co., Ltd. and Hesheng Silicon Industry Co., Ltd.