A small Chinese solar maker that rallied more than sevenfold late last year now faces a sober reckoning: a forecast of its sixth consecutive annual loss and five straight trading days capped at exchange-imposed limits. The company's performance warning crystallises how structural overcapacity and brutal price competition in China's photovoltaic (PV) sector are translating into real pain for manufacturers — even as investors hunt for the next hot theme.
Guosheng Technology (国晟科技) told investors it expects a 2025 net loss of between RMB 325 million and RMB 650 million, extending a run of annual losses to six years. Management blamed prolonged weakness in module prices driven by supply outstripping demand, and said it took conservative provisions for inventory write‑downs and long‑lived asset impairment, which together account for a large share of the hit to results.
The company’s third‑quarter figures already signalled the severity of the problem: revenue fell about 80% year‑on‑year to roughly RMB 143 million and net losses widened compared with the prior year. In parallel, Guosheng has been trying to reposition itself in hotter areas of the energy transition — announcing in October plans to invest roughly RMB 230 million in a prospective 10GWh solid‑state battery manufacturing project and later proposing a RMB 240.6 million cash acquisition to enter high‑precision lithium‑battery structural parts.
Those strategic moves did not placate the market. From a low in October the stock climbed spectacularly, at one point registering cumulative gains of more than 500% in the window flagged by the Shanghai exchange, and over 700% from its trough at its peak. Regulators intervened, citing abnormal trading behaviour and pausing accounts; after a trading halt and a short resumption rally, the stock has been pinned by five consecutive limit‑down sessions since mid‑January as investors fled.
Guosheng’s fate mirrors broader distress across China’s PV chain. Several large, formerly profitable names have reported or warned of sizeable 2025 losses: top module and component manufacturers have flagged multi‑billion‑RMB deficits as excess capacity, depressed prices and margin compression bite. The deterioration is industry‑wide — from polysilicon and wafer producers through to module assemblers — turning what once looked like a multi‑year growth story into a cycle of painful consolidation.
The pressure has prompted policy responses and strategic shifts. Beijing has signalled a desire to curb disorderly competition — including removing certain export tax rebates — and industrial ministries say competition ecology is stabilising. Meanwhile, technology upgrades (for example, moves to reduce silver in cells or to develop higher‑efficiency modules) and a wave of M&A and vertical moves into batteries are starting to sort winners from losers, though that process will be disruptive and uneven.
For international observers the episode is a reminder that China’s clean‑energy transition is both a market opportunity and a source of systemic strains. Oversupply and speculative trading can amplify corporate distress rapidly, while regulatory scrutiny of market behaviour is likely to intensify. The near‑term outlook for many PV names is weak, but industry consolidation and technology improvements leave open the possibility of a recovery in 2026 if demand and pricing normalise.