Analysis Report on the Silver Reduction Trend and Transformation Strategy of Juhe Materials (688503)'s Silver Paste Business

Based on the collected information, I will provide you with an in-depth analysis report on the transformation direction of Juhe Materials amid the silver reduction trend in its silver paste business.

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Over the past six months, the international silver price has nearly doubled, a trend that has had a profound impact on the photovoltaic industry. According to industry data, the proportion of silver in photovoltaic module costs has surged from less than 5% before 2024 to approximately 20% currently [1][2]. Data from the World Silver Association shows that silver usage in photovoltaics reached 6,146 tons in 2024, accounting for 29% of industrial silver consumption and 17% of total silver demand [3]. The core reasons for the continuous surge in silver prices include:

• Persistent supply-demand gap
  : The silver supply gaps from 2022 to 2024 were 7,762 tons, 6,240 tons, and 4,632 tons respectively [4]
• Strong growth in industrial demand
  : Demand continues to rise in industrial sectors such as photovoltaics, electric vehicles, and AI data centers [5]
• Geopolitics and financial attributes
  : Intensified global geopolitical conflicts and the impact of interest rate cut cycles [6]

The current photovoltaic industry is in a periodic adjustment phase, with profit pressure across all links due to periodic supply-demand mismatch and technological homogeneity. Silver paste accounts for over 50% of the non-silicon cost of batteries, and the rise in silver prices has made it the largest single raw material cost item (approximately 17%) [7]. Driven by the “anti-involution” policy, all links in the industrial chain have strong expectations of turning profitable in 2026, and silver paste cost reduction has become a key breakthrough.

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Centering on the “silver reduction - silver substitution - silver elimination” technological evolution route, Juhe Materials has built a complete silver reduction product matrix [8]:

Technical Route	Silver Content	Technical Level	Application Status
Silver-coated Copper Paste	≤20%	Leading in China	Mass Production
Pure Copper Paste	0% (Full Substitution)	Technological Breakthrough	Small-batch Supply
Ultra-fine Line Printing + Low Solid Content	Physical Reduction	Leading in China	Mass Production Application
Seed Layer + Copper Paste	80% Silver Consumption Reduction	Problem Overcome	Verification Phase

• Launched silver-coated copper paste with silver content ≤30% (volume resistivity 5.5 μΩ·cm) [9]
• Completed product development of silver-coated copper fine grid with 12% silver content
• Ultra-low silver content silver-coated copper paste has volume resistivity ≤8 μΩ·cm, with tight bonding to TCO

• Achieved a breakthrough in “seed layer + copper paste” technology, overcoming the problem of high-temperature copper oxidation inhibition [10]
• Volume resistivity of pure copper paste is 0.7 mΩ·cm²
• Matches narrow-opening screen (steel mesh ≤8μm), with full line shape and high H/W

• “Ultra-fine Line Printing + Low Solid Content + No Main Grid” technical solution
• High-performance silver paste adapted to LECO (Laser Enhanced Contact) technology
• UV attenuation-resistant silver paste technology

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Subsidiary Shanghai Jiangjuhe relies on electronic paste platform technology to implement a diversified strategic layout [11]:

• MLCC Electrode Paste
  : Passed customer small-scale tests, copper end paste formulas cover products of different specifications for large and small MLCC sizes
• LTCC Low-Temperature Co-fired Ceramic Paste
  : Developed membrane tape products with different shrinkage rates, 82% solid content high-conductivity via-filling paste
• Semiconductor Packaging Paste
  : Low-temperature sintered silver paste, power semiconductor chip bonding sintered silver
• 5G Communication Devices and Basic Electronic Components
  : Special pastes for miniaturized, high-frequency components such as chip resistors, capacitors, and inductors

• Completed product layout in the communication device and basic electronic component markets in H1 2025
• Achieved monthly tonnage-scale shipments
• In the automotive electronics field, has been integrated into multiple new energy vehicle models
• Undergoing certification in more vehicle models

• Developed gold paste technology for sensors (preliminary formula finalized)
• Developed new electronic semiconductor bonding materials (completed customer-side verification)
• Developed low-temperature sintered silver (feasibility verification with Hongwei Technology passed)

Subsidiary Shanghai Delangju focuses on the development of adhesive series products, forming differentiated competitive advantages [12]:

Product Category	Application Field	Technical Features	Commercialization Status
Packaging Positioning Adhesive	PV 0BB Modules	Dual UV Curing/Heat Curing Solution	Large-scale Mass Production
Insulating Adhesive	BC Modules	Solves Process Pain Points of BC Modules	Customer Introduction Phase
ECA Conductive Adhesive	New Energy Vehicles	Industry-leading Performance	Batch Supply
Battery Protection Adhesive	PV Cells	Excellent Comprehensive Performance	Verification Phase

• Consumer Electronics Field
  : DA adhesive, AA adhesive, window bonding adhesive, OLED LIPO packaging adhesive (expected to break import monopoly)
• Automotive Electronics Field
  : Thermal conductive structural adhesive, conductive adhesive, IGBT potting adhesive, magnetic steel bonding adhesive (complete solution package)
• Cutting-Edge Fields
  : Structural adhesive for water treatment membranes, adhesive for low-altitude aircraft, mechanical structural adhesive for robots

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According to the 2025 Half-Year Report [13]:

Financial Indicator	Current Period	Same Period Last Year	Change Ratio
Operating Revenue	RMB 6.435 Billion	RMB 6.765 Billion	-4.87%
Net Profit Attributable to Parent Company	RMB 181 Million	RMB 300 Million	-39.58%
Non-Recurring Net Profit	RMB 156 Million	RMB 330 Million	-52.66%
R&D Expenses	RMB 138 Million	RMB 161 Million	-14.32%
R&D Investment Ratio	5.34%	6.05%	-0.71pct

• The decline in net profit is mainly due to the more significant periodic increase in silver prices in the same period last year, which brought substantial profit growth
• Net cash flow from operating activities was -RMB 1.098 Billion, mainly due to the increased proportion of bank acceptance notes used for payment by downstream customers
• Financial expenses decreased by 41.62%, mainly due to the decline in bill discounting expenses

Subsidiary	Registered Capital	Total Assets	Net Assets	Operating Revenue	Net Profit
Shanghai Jiangjuhe	RMB 15 Million	RMB 73.54 Million	-RMB 52.17 Million	RMB 40.59 Million	-RMB 18.01 Million
Changzhou Juqi	RMB 60 Million	RMB 1.29359 Billion	RMB 57.09 Million	RMB 2.21855 Billion	-RMB 4.61 Million
Shanghai Delangju	RMB 20 Million	RMB 29.34 Million	-RMB 44.83 Million	RMB 6.95 Million	-RMB 14.04 Million

: The non-photovoltaic business segments are still in the strategic investment phase, with both Jiangjuhe and Delangju operating at a loss. However, they have established technological and market foundations in their respective fields and possess medium-to-long-term growth potential.

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Technical Route	Silver Consumption Reduction	Industrialization Level	Core Advantages	Main Bottlenecks
Steel Plate Printing	20%-40%	Large-scale Mass Production	Compatible with Existing Production Lines	Limited Cost Reduction Space
Silver-coated Copper (HJT)	30%-50%	Standard for Mass Production	Stable Performance	Only Compatible with HJT
Silver-coated Copper (TOPCon)	50%+	GW-scale Mass Production	Significant Cost Reduction	Copper Diffusion Problem
Pure Copper Paste	50%+	Small-batch Production	Lowest Cost	High Contact Resistance
Copper Plating	80%+	Large-scale Mass Production	Completely Silver-free	High Equipment Cost

According to industry analysis [14], Juhe Materials has the following competitive advantages in its silver reduction technology layout:

1. Technological Leadership
   : Mass production of ultra-low silver content silver-coated copper paste (≤20% silver content) places it at the forefront of the industry
2. Complete Product Matrix
   : Covers multiple technical routes including silver-coated copper, pure copper paste, and ultra-fine line printing
3. Abundant Customer Resources
   : Relying on its photovoltaic silver paste customer base, it has favorable conditions for expanding non-photovoltaic businesses
4. Strong R&D Team
   : Has 243 R&D personnel, including 62 master’s and doctoral degree holders

• Silver-coated copper technology will become the industry standard, and Juhe Materials is expected to gain a larger market share in the TOPCon battery segment
• Non-photovoltaic businesses (Jiangjuhe and Delangju) are expected to reduce losses, with some product lines achieving break-even

• Copper plating technology will improve in maturity and may become the mainstream technical route
• Juhe Materials’ “seed layer + copper paste” technology is expected to achieve industrialization breakthroughs
• The electronic paste business is expected to form an independent growth driver

• The company’s vision is to become a “leading global material technology group”
• Seize technological high ground in cutting-edge fields such as third-generation semiconductor packaging and flexible printed electronics

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1. Technological Iteration Risk
   : Uncertainties exist in silver reduction technical routes, which may affect the company’s product competitiveness
2. Silver Price Fluctuation Risk
   : Sharp fluctuations in silver prices may affect the company’s inventory value and profitability
3. Non-Photovoltaic Business Cultivation Risk
   : Subsidiaries such as Jiangjuhe and Delangju are still in the strategic investment phase and may continue to incur losses in the short term
4. Intensified Industry Competition
   : Competitors like Dike Co., Ltd. and Suzhou Good-Ark Electronics are also laying out silver reduction technologies
5. Photovoltaic Industry Cycle Risk
   : May face pressure of simultaneous decline in volume and price during the industry capacity clearing process

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As a leading global photovoltaic silver paste enterprise, Juhe Materials has adopted a dual-drive strategy of “technological upgrading + business diversification” in response to the silver reduction trend:

• Technical Aspect
  : Maintains competitiveness in its photovoltaic business through technical reserves such as silver-coated copper paste, pure copper paste, and ultra-fine line printing
• Business Aspect
  : Actively expands non-photovoltaic electronic paste and adhesive businesses through its subsidiaries Jiangjuhe and Delangju
• Strategic Aspect
  : Transforms from a single photovoltaic silver paste supplier to a “leading global material technology group”

Despite short-term performance pressure, the company has strong risk resistance and long-term growth potential amid industry changes through forward-looking layout and technical accumulation. It is recommended to continue focusing on the industrialization progress of the company’s silver reduction technologies and the expansion of its non-photovoltaic businesses.

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[1] Securities Times - “Continuous Breakthroughs in PV ‘Silver Elimination’ Technologies, Will the Supply-Demand Pattern of Silver for PV Reverse?” (https://www.stcn.com/article/detail/3554851.html)

[2] China Business News - “Silver Price Surge Adds to Photovoltaic Industry’s Woes” (http://dianzibao.cb.com.cn/images/2025-12/29/19/2634B15B.pdf)

[3] Hualian Futures - “Silver Supply and Demand Analysis” (Industry Research Report)

[4] World Silver Association - “2025 Global Silver Supply and Demand Report” (https://www.silverinstitute.org/)

[5] EET-china - “Responding to Silver Price Hikes: Localization and Cost Reduction Paths for Key Metal Material Supply Chains in Semiconductors” (https://www.eet-china.com/mp/a463776.html)

[6] China Photovoltaic Industry Association - “2025 Photovoltaic Industry Development Outlook” (https://www.china-pv.org.cn/)

[7] Yao Yao, Guojin Securities - Speech at “2025 Photovoltaic Industry Annual Conference” (https://www.gjzc.com/)

[8] Juhe Materials 2025 Half-Year Report (http://static.cninfo.com.cn/finalpage/2025-08-27/1224582703.PDF)

[9] Dongfang Fortune Securities - “Special Research on Photovoltaic Silver Paste Industry” (https://reportify-1252068037.cos.ap-beijing.myqcloud.com/media/production/s_a8a94572.pdf)

[10] Asia Consulting - “Silver Powder and Electronic Silver Paste Technology Forum 2026” (https://www.asia-pv.com/)

[11] Juhe Materials Investor Relations Announcement - “Announcement on the Company’s 2025 ‘Improve Quality, Enhance Efficiency, Prioritize Returns’ Action Plan” (http://money.finance.sina.com.cn/corp/view/vCB_AllBulletinDetail.php?stockid=688503&id=11373578)

[12] Guotou Securities - “Research Report on Changzhou Juhe New Materials Co., Ltd.” (https://file.finance.qq.com/finance/hs/pdf/2025/09/06/1224641637.PDF)

[13] Juhe Materials 2025 Half-Year Financial Data (http://static.cninfo.com.cn/finalpage/2025-08-27/1224582703.PDF)

[14] China Galaxy Securities - “Anti-Involution Drives Profit Recovery in Photovoltaic Industry, Technological Innovation Leads New Cycle” (https://cn.investing.com/news/stock-market-news/article-3140414)