Hangzhou First Faces H1 2025 Profit Slump With Low Prices

China-based solar PV encapsulation materials manufacturer Hangzhou First Applied Material anticipates stronger 2nd half demand, despite a 46.6% year-on-year (YoY) decline in H1 2025 net profit to RMB 495.7 million. The company plans to expand overseas capacity, develop differentiated products, and boost global sales to navigate the challenging PV environment and achieve profitability in the next growth cycle. 

The company’s management attributed the sharp drop in PV film prices and sales volume to the decline in revenue and net profit, despite higher-than-expected 212 GW of new PV capacity installed in China during H1 2025 (see China’s June 2025 Solar PV Additions Fall To 14.36 GW). 

“The photovoltaic industry is currently at the bottom of its cycle, and prices for the company's photovoltaic materials products are low, putting pressure on profitability. During the reporting period, the company's net profit declined significantly year-on-year. However, compared to other loss-making film companies, the company's product shipments have been more stable, and its product profitability has been more outstanding, fully demonstrating its advantages as a leading photovoltaic film company,” stated Hangzhou First in its H1 2025 financial results announcement. 

The company’s operating income of RMB 7.95 billion during the period were down 26.06% YoY, pressured by a 27% decline in its PV film business that contributed RMB 7.2 billion to the total. Sales volume for the PV film business was flat at 1,386 million m2 (see Hangzhou First Reports H1 2024 YoY Net Profit Increase Of 4.95 Percent).

Its backsheet business declined 57.78% with operating income of RMB 175 million as sales fell 50.28% to 33.7 million m2. 

The dry film photoresist (DFR) business generated RMB 325 million in operating income, an increase of 18%, with the sales volume increasing 21.62% to 89.6 million m2.

Hangzhou First says it expects its performance to remain sensitive to PV market conditions going forward, but plans to boost competitiveness, increase shipments, and control costs as strategies to navigate this time. It expects diversification into electronic and functional films to stabilize earnings and provide new growth drivers.

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