Phoenix Finance "IPO Observation Side"

From the power director in the system to the leader in the photovoltaic industry, Jin Baofang, founder of Jingao Technology, spent 30 years writing a business legend, and the company once reached the peak of its market value of 170 billion yuan.

However, the aggressive capacity expansion and the imbalance between industry supply and demand have put this star company in a dilemma of both revenue and net profit decline and high debt.

In 2024, Jingao Technology lost 4.6 billion yuan, and its market value shrank to one-fifth of its peak period. Behind the "breaking arm survival" of 25.8% of its employees was a cruel reshuffle after the collective surge in the photovoltaic industry.

Faced with overcapacity and debt pressure, whether JAO Technology can achieve a Jedi counterattack through its Hong Kong stock IPO has attracted much attention from the market.

01

From the head of the power department to the godfather of photovoltaics

Jin Baofang was born in Ningjin County, Xingtai, Hebei in 1952. In her early years, she was forced to drop out of school and work as a farmer due to her poor family. Later, she successfully entered the system through the study of the Finance and Trade School. During his tenure within the system, he served as deputy director of the Agricultural Machinery Bureau of Ningjin County and director of the Electric Power Bureau, demonstrating outstanding management skills. Especially when he was the director of the Electric Power Bureau, he successfully turned the loss-making power bureau into profits through a series of measures such as streamlining institutions and reforming the electricity bill system, and accumulated valuable management experience for his future entrepreneurship.

This system experience laid a solid foundation for Jin Baofang's entrepreneurial journey. In 1996, he resolutely resigned from his public office and founded the Jinglong Semiconductor Factory with a start-up capital of 3.5 million yuan, and introduced Japan's Matsumiya technology to produce monocrystalline silicon, becoming a pioneer in domestic photovoltaic upstream materials. On this basis, in 2005, he keenly grasped the industry's development opportunities and led the establishment of Jin Ao Solar Energy, opening up a complete industrial chain from silicon wafers to components through a joint venture model. With its excellent business operation capabilities, it took only two years to lead the company to successfully land on Nasdaq in 2007, becoming the first Chinese photovoltaic company to be listed in the United States.

However, Jin Baofang's capital operation path has not stopped here. Faced with the dilemma of sluggish valuation in 2018, he decisively promoted the privatization and delisting of JAO Solar, and successfully returned to A-shares through a backdoor of Tianye Tonglian the following year, achieving a gorgeous turn from the low of the US stock period to the peak of A-shares of 170 billion yuan.

02

More than 20 billion yuan has been raised since its listing

However, glory is always short-lived. Since 2023, JAO Technology has been questioned by many investors that the substantial expansion of production has led to an excessive debt ratio and that market demand cannot keep up with production capacity.

Wind data shows that since its backdoor listing, in more than five years, JAO Technology has reached 28.626 billion yuan through direct financing alone, and most of this funds are used to expand production capacity.

In 2019, JinkoAo Technology's fixed assets and projects under construction were 10.41 billion and 1.025 billion respectively, with the total of 11.43 billion; by the end of 2024, JinkoAo Technology's fixed assets and projects under construction were 41.584 billion and 3.244 billion respectively, with the total of 44.828 billion respectively. In just a few years, JinkoAo Technology's production capacity has increased by nearly 4 times.

Some institutions predict that the new domestic photovoltaic installed capacity in 2025 is expected to be between 215GW and 302GW. However, in the past five years, the investment in the photovoltaic manufacturing process (announcement) has exceeded 3.4 trillion yuan. Up to now, the production capacity of silicon materials, silicon wafers, battery cells and modules in the main photovoltaic industry chain has reached 1447GW, 1160GW, 1193GW and 1428GW respectively, far exceeding the theoretical demand.

Amid investors' doubts, the valuation of the photovoltaic industry represented by JAO Technology has plummeted, of which JAO Technology's current market value is 32.1 billion yuan, less than one-fifth of its peak.

03

High debt and enterprises both decline in revenue and net profit

In 2024, Jingao Technology's annual revenue was 70.121 billion yuan, a year-on-year decrease of 14.02%; attributable net profit was a huge loss of 4.656 billion yuan, a year-on-year change from profit to loss (profit in 2023 was 7.039 billion yuan), and a net profit loss of 4.269 billion yuan after deducting non-net profit. This performance set the company's worst record in the past decade, especially the loss in the fourth quarter was as high as 4.172 billion yuan, far exceeding the total in the first three quarters.

In the first quarter of this year, JAO Technology continued its loss trend, with net profit of -1.638 billion yuan, a year-on-year decrease of 239.35%. In addition to net profit, its revenue also declined sharply, with operating income falling by 14.02% year-on-year to 70.121 billion yuan in 2024, and a year-on-year decrease of 33.18% in the first quarter of 2025.

At the same time, JAO Technology's overall gross profit margin in 2024 dropped from 18.13% in 2023 to 4.48%, and its net profit margin dropped from 8.82% in 2023 to -7.27%.

In the first quarter of this year, JAO Technology's gross profit margin was -6.71%, a year-on-year decrease of 11.3%.

Regarding the reasons for the huge losses, JAO Technology explained that due to the continuous impact of the supply and demand mismatch of the photovoltaic industry, market competition has intensified, the prices of major products in each link have dropped sharply, and the international trade environment has become increasingly severe, resulting in the continued decline in the profitability of the company's main business during the reporting period.

As performance declined sharply, due to the significant expansion of production capacity in the early stage, JAO Technology became a high debt, and at the same time, the cash on the account was insufficient.

As of the first quarter of 2025, JAO Technology's debt-to-asset ratio reached 76.33%, a ten-year high. Among companies with revenue of more than 50 billion yuan in the photovoltaic field, the debt-to-asset ratio is the highest.

As of the first quarter of this year, Jingao Technology had 25.554 billion yuan in cash on its account, which seemed to be sufficient cash. However, Jingao Technology's short-term loans, notes payable and accounts payable, non-current liabilities due within one year exceeded 32 billion yuan, and the debt pressure was still relatively high.

In this Hong Kong stock IPO, Jingao Technology stated that it will use part of the raised funds to repay bank loans with interest rates of 3.50%-3.80% due after May 2025, in order to optimize the company's financial situation.

04

Last year, 25.8% of the staff were reduced

According to the previous annual report of Jinko Technology, it is not difficult to find that the company's early overseas revenue accounted for a relatively high proportion. In 2019, its overseas revenue reached 15.172 billion yuan, its domestic revenue was 5.982 billion yuan, and its overseas revenue was 2.54 times its domestic revenue; and by 2024, the company's overseas revenue was 40.42 billion yuan, its domestic revenue was 29.701 billion yuan, and its overseas revenue was 1.36 times its domestic revenue.

In five years, Jinko Technology's overseas revenue increased by 25.2 billion yuan, and domestic revenue increased by 23.719 billion yuan. Overall, the scale of overseas growth is relatively large, while the domestic growth rate is relatively high.

This time, Phoenix Finance’s "IPO Observation Poster" noticed that Jingao Technology also plans to use the funds raised to build factories overseas to expand production capacity and strengthen global marketing and R&D capabilities.

It is not difficult to understand that JAO Technology is ready to focus on overseas markets and seek a larger market share.

However, unlike this expansion of production capacity and R&D, in the 2024 annual report, Phoenix Finance's "IPO Observation" found that Jingao Technology's R&D expenses have declined significantly.

In 2023, JAO Technology's R&D expenses were 1.142 billion yuan, and in 2024 it dropped to 987 million yuan, a year-on-year decrease of 13.57%. Although sales expenses increased by 8.96% year-on-year, they were not effectively converted into revenue.

Moreover, compared with 2023, the overall number of JAO Technology has dropped significantly, from 50,258 to 37,289, a year-on-year decrease of 25.8%. Among them, the production staff was the most reduced, followed by the technical personnel engaged in R&D, and the only one who achieved growth was sales personnel.