On December 8, GCL Technology Holdings Limited (03800.HK) announced a major transaction, proposing to establish a limited partnership to acquire an additional 42.469% equity interest in Inner Mongolia Xinyuan Silicon Materials Technology Co., Ltd. (“Inner Mongolia Xinyuan”) for a total consideration of RMB 2.01 billion. Upon completion, GCL Technology’s ownership in Inner Mongolia Xinyuan will increase to nearly 100%, enabling the full consolidation of this industry-leading granular silicon production capacity and delivering a substantial uplift to profit attributable to shareholders. The move highlights the company’s strategic foresight in acquiring high-quality assets at the bottom of the industry cycle.

As the core operating platform for GCL Technology’s granular silicon business, Inner Mongolia Xinyuan has established itself as a benchmark for high-quality capacity in the industry, underpinned by its advanced silane-based fluidized bed reactor (FBR) technology. With signs of an earnings inflection point emerging in the photovoltaic industry in the third quarter of 2025, coupled with GCL Technology’s granular silicon cash cost falling to an industry-leading low of RMB 24.16 per kilogram, Inner Mongolia Xinyuan has successfully returned to profitability. This performance underscores its resilience across industry cycles and provides a solid earnings foundation for the equity acquisition.

Industry analysts note that the transaction comes at a strategic window during the industry’s bottom-cycle adjustment, offering GCL Technology a cost-effective opportunity for asset integration. Although the photovoltaic sector has shown short-term profit recovery, structural supply-demand adjustments remain incomplete, and market valuations are still near cyclical lows. The total consideration reflects a reasonable valuation level and offers a clear cost advantage compared with asset prices during industry upcycles. Through this acquisition, GCL Technology efficiently repurchases minority interests in a core subsidiary on a market-oriented basis, avoiding premium risks associated with an upturn while further consolidating its leadership in granular silicon capacity—demonstrating strong capital operation capabilities and precise cycle timing.

Moreover, the full integration of the equity structure is expected to unlock significant synergies and directly enhance profit attributable to shareholders. Following completion, Inner Mongolia Xinyuan will become a wholly owned subsidiary under GCL Technology’s effective control, with all of its operating profits fully consolidated into the group’s financial statements. Compared with its previous non-wholly-owned status, the contribution to attributable profit will increase substantially. For reference, GCL Technology achieved RMB 960 million in profit from its granular silicon business in the third quarter of 2025, with EBITDA reaching RMB 1.41 billion, reflecting strong profitability. The full consolidation of Inner Mongolia Xinyuan, together with continued improvements in capacity utilization, is expected to provide further momentum for earnings growth, optimize the company’s business structure, and strengthen its core competitiveness.

A representative of GCL Technology stated that the acquisition represents a strategic move during a period of industry value restructuring, reflecting the company’s firm confidence in the granular silicon technology pathway as well as its commitment to delivering returns to shareholders. Going forward, the company will continue to focus on its granular silicon core business, leverage the high-quality capacity of Inner Mongolia Xinyuan to further expand market share, and extend its silane gas business into high-end applications such as semiconductors and solid-state batteries, creating long-term and stable value for investors. Against the backdrop of an accelerating global energy transition, GCL Technology is driving the Chinese photovoltaic industry forward through the dual engines of asset integration and technological innovation—shifting from “scale leadership” to “value leadership.”

Link：http://finance.china.com.cn/roll/20251209/6282594.shtml