In-depth Analysis of the Impact of Yijing Optoelectronics' Chuzhou Project Shutdown and PV Industry Overcapacity

As an established enterprise in the A-share PV module sector, Yijing Optoelectronics (600537.SH) is facing a major survival crisis. On the evening of December 28, 2024, the company disclosed that it had received a “Hearing Notice” from the Management Committee of Quanjiao Economic Development Zone in Anhui Province. Due to the failure to advance the 10.3-billion-yuan Chuzhou PV project as agreed and its shutdown, the committee intends to terminate the investment agreement, recover 140 million yuan in government capital contributions, and pursue liability for breach of contract [1][2]. This event reflects the deep pains of China’s PV industry’s transformation from “scale expansion” to “quality competition”, and also exposes the huge risks of blind expansion in the downward cycle of the industry.

In September 2022, Yijing Optoelectronics’ board of directors and extraordinary general meeting approved the proposal to invest in the construction of a 10GW PV cell, 10GW PV wafer, and 10GW PV module project in Quanjiao County, Chuzhou City, Anhui Province. The project was promoted by Chuzhou Yijing, a joint venture between Yijing Optoelectronics’ holding subsidiary Changzhou Yijing and Quanjiao County platform company Jiachen Fund. The registered capital of the project company was 1.5 billion yuan, of which Changzhou Yijing planned to contribute 800 million yuan and Jiachen Fund planned to contribute 700 million yuan [2][3].

Against the backdrop of high prosperity in the PV industry at that time, Yijing Optoelectronics had high hopes for the project, hoping to “fully grasp the major development opportunities of current N-type PV products and make up for the company’s battery gap”. The project officially started construction in November 2022 and began to put into production sequentially in July 2023. However, the company’s book monetary funds were about 3 billion yuan, and there was a certain funding gap for this investment project. The company planned to make up for it through bank financing, which had already indicated potential funding risks [1].

The turnaround occurred during the adjustment of the PV industry cycle. In the past three years, the PV industry has experienced phased structural capacity mismatch, the market has continued to be weak, and the capacity utilization rate of the entire industry has dropped sharply [1][2]. Affected by this, Yijing Optoelectronics’ Chuzhou project finally only completed the landing of 7.5GW capacity in the first phase of the PV cell project; the remaining cell capacity and the second and third phases of PV wafer and PV module projects were not started.

More seriously, in October 2024, affected by the cyclical nature of the PV industry, Yijing Optoelectronics had fully shut down the Chuzhou base. The 5GW PERC cell capacity at the Changzhou base and the 7.5GW TOPCon cell capacity at the Chuzhou base have all been shut down, and the utilization rate of the remaining module capacity is only about 40% [1][3]. From a “guest of honor” project expected by the local government to a “hot potato” that is eager to cut losses now, this three-year 10-billion layout finally ended in shutdown, triggering this accountability storm.

The shutdown of the Quanjiao project is not an isolated incident; behind it is Yijing Optoelectronics’ continuously deteriorating financial situation. According to the company’s financial report data:

From the data, it is clear that the company’s operating revenue plummeted from 8.248 billion yuan in 2022 to 1.556 billion yuan in the first three quarters of 2025, a drop of up to 81%. Net profit has turned from profit to continuous huge losses, losing 2.09 billion yuan in 2024 alone [1][3].

While profitability is weak, the company’s debt pressure is even more alarming. As of the end of September 2025, the company’s total assets were 5.317 billion yuan, while total liabilities were as high as 5.063 billion yuan, and the asset-liability ratio soared to 95.24%, far exceeding the industry average [1][2]. This data means that the company’s net assets are only 254 million yuan, and the financial leverage is approaching the limit.

The company also faces great capital pressure: the end-of-period monetary funds are 786 million yuan, interest-bearing liabilities are 556 million yuan, but notes payable and accounts payable are as high as 1.439 billion yuan, and long-term payables are 2.008 billion yuan [3]. Although monetary funds can cover interest-bearing liabilities, the overall capital turnover pressure is extremely high.

It is worth noting that Yijing Optoelectronics is currently in a state of no controlling shareholder or actual controller. The company’s equity is highly dispersed, and the shareholding ratio of the top four shareholders is less than 5% each [2]. This situation stems from multiple changes in the company’s control rights: in 2017, Xun Jianhua transferred control to Qinchengda Investment; at the end of 2020, Gu Yaoming gave his shares to his son Gu Hanning; after the shares held by Weizhi Energy were auctioned and transferred in batches in 2025, the original actual controller completely withdrew.

Against the background of no actual controller, matters involving major investment project adjustments, administrative dispute response, and potential financial risk resolution put higher requirements on the company’s governance coordination, decision-making efficiency, and external communication capabilities [2]. The company’s stock price has also been falling all the way; as of the close of December 29, 2025, it was reported at 4.23 yuan per share, a drop of about 93% from the historical high of 60.42 yuan per share in 2011.

Yijing Optoelectronics’ predicament is a microcosm of the overcapacity in the entire PV industry. In 2023, PV module prices fell by “half”, from 1.8-1.9 yuan/W at the beginning of the year to less than 1 yuan/W at the end of the year; in 2024, the PV industry continued to be mired in a “price war” quagmire, and module prices not only did not stop falling but even continued to drop to less than 0.6 yuan/W, and PV module enterprises suffered overall losses [4].

According to industry research data, the global total silicon wafer capacity at the end of 2023 was about 974.2GW, an increase of 46.7% year-on-year, while the global new installation demand in the same period was only about 530GW. Even if no new capacity is added in 2024, the manufacturing capacity scale at the end of 2023 has far exceeded the installation demand of that year, and the PV industry chain shows a state of phased and structural serious overcapacity [5].

Currently, the capacity utilization rate of all segments in the PV industry chain is at a historical low:

Silicon wafer prices have continued to decline since the fourth quarter of 2022; since the second quarter of 2024, PV silicon wafer prices have been lower than the cash cost, and the operating rate of silicon wafer manufacturers has decreased significantly [5]. This dilemma of “the more you produce, the more you lose” has forced enterprises to shrink and survive by reducing production, shutting down production, or even closing production lines.

Facing the持续低迷 market environment, the industry is actively seeking countermeasures. At the policy level, the Ministry of Industry and Information Technology issued the new version of the “Photovoltaic Manufacturing Industry Specification Conditions” in November 2024, which raised the access thresholds in terms of technology, energy consumption, capital, and intellectual property rights, aiming to curb the blind expansion of inefficient capacity and accelerate the exit of backward capacity [5]. Fiscal policies have been tightened simultaneously; the export tax rebate rate for some PV cells, modules, and silicon wafers has been reduced from 13% to 9%, compressing the profit space of enterprises relying on low-price competition.

At the market level, since the second half of 2024, many Chinese PV manufacturers have actively announced production cuts, shutdowns, or suspension of new expansion plans. Leading enterprises have reached preliminary consensus on capacity regulation through forums and alliances, and the industry has launched a self-discipline production reduction negotiation mechanism [5]. Rating agencies such as S&P Global Ratings predict that in 2025, under the constraints of PV manufacturing industry norms and self-discipline treaties, backward and inefficient capacity will continue to be eliminated, the supply and demand pattern of the PV industry may be improved, and the industry will gradually enter a stage of benign development.

1. Legal Risks and Financial Claims
   : The local government intends to recover 140 million yuan in capital contributions and pursue liability for breach of contract such as construction costs, rent, and capital occupation costs. Although the final amount is uncertain, it will undoubtedly exacerbate the company’s financial pressure [1][2].

2. 23 Lawsuits Pending
   : Up to now, the company and its consolidated subsidiaries have accumulated 23 lawsuits and arbitrations, involving an amount of about 71.163 million yuan. Among them, there are 13 cases as defendants, involving an amount of about 44.8215 million yuan [3].

3. Production and Operation Restricted
   : The battery capacity of the two major production bases in Changzhou and Chuzhou has been fully shut down, and the utilization rate of the remaining module capacity is only about 40%, so the company’s business scale has shrunk significantly.

The Yijing Optoelectronics case has issued a warning to local governments’ investment promotion work. During the upward cycle of the PV industry, local governments competed to introduce PV projects, but subsequent supervision and risk prevention and control were often absent. When the industry enters a downward cycle, enterprise projects are shut down and cannot perform their contracts, so local governments have to bear losses and启动 accountability procedures [1]. This reminds local governments to more carefully evaluate enterprise strength and industry risks when attracting investment and establish a sound follow-up supervision mechanism.

1. Respect Industry Cycles and Rational Investment
   : The shutdown of Yijing Optoelectronics’ 10-billion project warns PV enterprises that they must respect industry cycles, fully evaluate market risks and their own bearing capacity when making expansion decisions, and avoid blind expansion [1].

2. Accelerate Industry Clearing and Integration
   : This case reflects that the PV industry is undergoing a deep reshuffle; enterprises lacking technical advantages, cost control, and capital strength will accelerate their exit, and the industry concentration is expected to further increase [5].

3. Promote Transformation to High-quality Development
   : In the long run, industry pains will promote the PV industry to shift from disorderly expansion to high-quality development; technological innovation, green manufacturing, and higher concentration will become the development direction.

When Yijing Optoelectronics can get out of the predicament depends on whether the PV industry can recover and whether the company can effectively resolve risks. In the state of no actual controller, the company needs to establish a more stable governance structure to improve decision-making efficiency and risk response capabilities. The result of the hearing will have an important impact on the company’s future direction [2].

Rating agencies such as S&P Global Ratings predict that the supply and demand pattern of the PV industry will gradually improve in 2025, but the recovery path is still full of challenges. On the one hand, the demand for overseas markets (especially emerging markets such as the Middle East and India) has great growth potential; on the other hand, domestic market competition is fierce, and there is limited room for price increases. Enterprises need to rely on technological innovation and cost control to survive in the industry reshuffle [5].

The impact of overcapacity in the PV industry is still deepening, and enterprises in trouble like Yijing Optoelectronics may still appear. Investors need to closely follow the progress of industry capacity clearing, changes in policy orientation, and enterprise financial conditions, and avoid blind bottom-fishing. For Yijing Optoelectronics, the hearing result, lawsuit progress, and industry recovery rhythm will be key variables affecting the company’s prospects.

[1] Sina Finance - “Yijing Optoelectronics’ 10-billion PV Project Shutdown and Accountability, Double Pressure of No Actual Controller + High Debt” (https://finance.sina.com.cn/roll/2025-12-30/doc-inheqixn9658985.shtml)

[2] Securities Times - “Project Not Advanced as Scheduled, Yijing Optoelectronics Faces Hearing” (https://stcn.com/article/detail/3561362.html)

[3] NetEase Finance - “Yijing Optoelectronics’ 10.3-billion Project Shutdown and Capital Contribution Recovery, 95% Debt Ratio Involved in 23 Lawsuits Hoping for Industry Recovery” (https://m.163.com/dy/article/KI15D7D00530KCTU.html)

[4] East Money - “Yijing Optoelectronics Being Pursued for 140 Million yuan, These PV Enterprises Also Ordered to Return Investment Funds” (https://wap.eastmoney.com/a/202512303605964814.html)

[5] S&P Global Ratings - “Deep Adjustment Under PV Anti-involution, Who Can Survive the Cold Winter?” (https://www.spgchinaratings.cn/upload/20251209_Commentary_PV Industry_R.pdf)