Major Company Exits POE Film Market

On August 28, Changhong Gaoke officially announced the termination of its previously planned external investment to establish a joint venture. The joint venture, which has now been canceled, was originally intended to focus on the production of modified alternative materials for photovoltaic POE film and hydrogenated nitrile rubber products.

In August 2023, to align with the development trend of domestic substitution in the new era of new materials, and to accurately meet the market application demands of national key industries such as new energy vehicles and photovoltaic solar energy, Changhong Hi-tech and Panjin Shengteng Industrial Development Co., Ltd. (hereinafter referred to as "Panjin Shengteng") reached a consensus on deep cooperation. The two parties plan to jointly conduct research and development on two key products: modified alternative materials for photovoltaic POE films and their supporting production processes, as well as hydrogenated nitrile rubber and its corresponding production processes. According to the "Cooperation Agreement on the Establishment of a Joint Venture" (hereinafter referred to as the "Agreement") drafted at the time, Changhong Hi-tech and Panjin Shengteng will subscribe to the capital contribution in the form of their own funds or self-raised funds. Changhong Hi-tech will subscribe an amount of 225 million RMB, while Panjin Shengteng will subscribe 275 million RMB, with a total capital contribution of 500 million RMB. In terms of equity distribution, Changhong Hi-tech will hold 45% of the joint venture's equity, while Panjin Shengteng will hold 55%.

According to the Color Masterbatch Industry Network, since the third quarter of 2023, the entire photovoltaic industry chain has entered a period of sustained decline. Affected by the overall industry environment, the price of POE film products has continued to fall. As of now, the price of this product has dropped to a historically low range, and from the current market situation, there are still no signs of recovery. This also means that the future profit margin of related products faces high uncertainty. In order to effectively safeguard the legitimate interests of the company itself and all shareholders, Changhong Gaoke and Panjin Shengteng, after multiple rounds of prudent research and communication, have ultimately reached a consensus to terminate the investment and establishment plan for this joint venture company.

It is worth noting that as of the time of this announcement, the joint venture company has not yet been established.

The current market price of photovoltaic POE films has dropped by over 30% from historical highs, with no clear signs of rebound. EVA films, benefiting from a cost advantage (30-40% lower), continue to squeeze the market. Meanwhile, the gradual commissioning of domestic POE industrial plants (such as Wanhua Chemical’s 200,000 tons/year facility) intensifies supply pressure. On the technical side, although domestic POE has achieved scaled production, high-end grades (such as carbon-8 level) still rely on imports, and performance in resisting potential-induced degradation needs improvement. This raises concerns not only about whether current prices have bottomed out but also whether domestic technology can break through the high-end grade barriers.