Xinyi Energy Holdings Ltd. warned first-half net profit will fall 25% to 35% from a year earlier, citing curtailment losses, lower market electricity prices under China's new pricing policy, and the partial disposal of a subsidiary. The solar power producer said on-grid generation declined due to consumption capacity constraints in certain Chinese provinces, particularly for subsidized projects. The company's shares have fallen 13.9% year-to-date, giving it a market value of HK$7.75 billion.
Xinyi Energy expects first-half net profit to fall 25% to 35%, blaming curtailment losses and lower market electricity prices in China.
"The decline reflects reduced on-grid generation from curtailment losses in certain provinces, particularly on subsidized projects," the company said in a Hong Kong stock exchange filing.
Net profit for the six months ended June 30 is expected to drop to between RMB292 million and RMB337 million from RMB449.8 million a year earlier. The company also cited China's new electricity pricing policy, which has increased market-based trading volumes while lowering power prices. The December 2025 disposal of a 51% stake in Xinyi Solar Tianjin, which is now treated as an associate rather than a wholly owned subsidiary, further reduced earnings contributions.
The profit warning puts Xinyi Energy on track for its weakest interim result since at least 2023. Shares have fallen 13.9% year-to-date, giving the company a market capitalization of HK$7.75 billion. The stock carries a Buy rating from analysts, with a consensus price target of HK$1.57.
Xinyi Energy operates solar power generation projects across mainland China, deriving revenue from on-grid electricity sales including subsidized projects under the nation's renewable energy framework. The company's portfolio shifted after the Tianjin disposal, reducing the scale of its consolidated asset base and changing how earnings from that unit are recognized.
The warning adds to headwinds facing China's renewable energy sector, where grid congestion and policy changes are squeezing margins for solar and wind producers. Peer companies operating subsidized solar projects in provinces with consumption capacity limits face similar risks from the new pricing regime, which began phasing in across multiple regions this year.
The guidance signals that regulatory shifts are eroding profitability for China's solar power operators faster than anticipated. Investors will watch for Xinyi Energy's interim results, expected in late August, for full details on the earnings decline and any interim dividend declaration.
This article is for informational purposes only and does not constitute investment advice.
