Recently, the China Securities Regulatory Commission (CSRC) announced the "Measures for Coordinating the Balance of the Primary and Secondary Markets and Optimising the IPO and Refinancing Regulatory Arrangements," which includes control of large-amount refinancing and restrictions on refinancing for listed companies experiencing breakdowns and losses.
The CSRC has selected 12 listed companies that meet IPO criteria for the new round of refinancing, including LONGi, Tongwei Group, Trinasolar, Jinko Solar, CSISolar, Risen, JA Solar, SUN GROW, Aiko Solar, and TCL ZHONGHUAN.
Refinancing rules have been significantly tightened. Many companies received Refinancing Review Inquiry Letters from the stock exchange, focusing on the "rationality of the financing scale" and the "necessity of the fundraising and investment project." Some companies have opted to cancel the issuance of additional capital shares in the new round of IPOs.
CSRC plans to improve the overall market
The CSRC plans to enhance the overall market by balancing IPOs in the primary and secondary markets and controlling refinancing appropriately.
To create a more comprehensive mechanism for improving the economy in the primary and secondary markets, the CSRC has turned its attention to regulating IPOs, financing, setting timing for new share issuance, supporting well-performing listed companies, and inspecting the use of funds raised, including more refinancing exemptions for listed companies in the real estate industry.
This tightening of the refinancing policy has led many companies to withdraw their requests for permission to do so.
Report on Refinancing Recipients or New IPO Rounds:
Amidst the tightened refinancing environment, even Tongwei Group, a leader in the integration of crystalline silicon cells and modules, has cancelled its share issuance plan, stating that they will not provide additional financing.
Canadian Solar has shipped 6.1 GW of modules through CSI Solar, primarily to China, Brazil, and the United States. In April, the company consolidated its global solar energy development business under the name "Recurrent Energy," which was previously operated in North America only. CSI Solar currently has financial statements of RMB 20,489 million and debt of RMB 13,700 million, with a positive margin of RMB 6,790 million.
SUNGROW has previously collaborated with LONGi as an industry expert with technology insights and modern solar energy products. SUNGROW is prepared to exchange insights on optimising commercial and industrial solar (C&I). Currently, SUNGROW has a financial statement of RMB 11.55 billion and debt of RMB 8.87 billion, with a positive margin of RMB 2.68 billion.
TCL ZHONGHUAN, a Chinese solar cell (PV) manufacturer, faces long-term debt repayment pressure with interest-bearing liabilities of up to RMB 39,490 million, posing a challenge in managing funds from this round of IPO.
One of the most notable companies is LONGi, a leading solar panel manufacturer with a financial status at the end of June 2023 of RMB 561.10 million and debt of only RMB 105.6 million, resulting in a difference of RMB 45,550 million. Although the share price is lower than the IPO price, LONGi holds a significant amount of monetary assets and aims to prepare for the future market with a clear direction.
LONGi holds substantial cash reserves for future opportunities and market direction. Chairman Zhong Baoshen recently stated that the company's caution about capacity expansion in the previous two years was due to the rapidly changing technical route of PV and associated risks. Now, LONGi Green Energy has a clear viewpoint: BC cells, including bifacial and monofacial cells, are expected to become the mainstream of crystalline silicon solar cells in the next 5-6 years.
Source: The China Securities Regulatory Commission (CSRC), August 27, 2023