This report (chinatimes.net.cn) reporter Li Jiajia and Li Weilai reported from Beijing.

After a strong market performance with two limit-up days over four days, the stock price of Shuangliang Eco-Energy System Co., Ltd. (hereinafter referred to as "Shuangliang Eco-Energy", 600481.SH) continued to rise. As of the close on May 20, the company's stock price was 7.32 yuan/share, up 1.53% for the day, with a cumulative increase of 15.64% over the past five days.

However, the backdrop of this rebound is not optimistic. At the end of April this year, the company disclosed its 2025 annual report, revealing multiple operational risks such as a significant decline in performance, high debt levels, and tight cash flow. The stock price once dipped to an intra-year low of 5.91 yuan/share, and this rise marks the first round of strong rebound for the stock.

To understand the driving factors behind the stock price increase, a reporter from Huaxia Times sent interview questions to the company's email, but had not received a response before the publication of this report.

Aggressive Expansion

The development of Shuangliang Eco-Energy can be traced back to 1982, starting with lithium bromide chillers. In 1985, the predecessor of Shuangliang Eco-Energy, Jiangyin Lithium Bromide Refrigeration Plant, was established, producing China's first lithium bromide chiller and later participating in the formulation of national and industry standards for lithium bromide chillers. In 2003, Shuangliang Eco-Energy was listed on the Shanghai Stock Exchange, and for many years, it has focused on energy-saving development.

The polysilicon reduction furnace is the core equipment for producing polysilicon materials. Data shows that Shuangliang Eco-Energy laid out its new energy-related business early on. In 2015, the company acquired 85% equity in Shuangliang New Energy through asset swaps, integrating the polysilicon reduction furnace business into the listed company.

Shuangliang Eco-Energy truly took off during the photovoltaic industry's explosive growth period in 2021. With rapid terminal installations, leading silicon material companies launched expansion projects, and the company entered the upstream photovoltaic sector with its polysilicon reduction furnace, experiencing high order growth for three consecutive years from 2020 to 2022, with a market share exceeding 65%.

However, Shuangliang Eco-Energy is no longer satisfied with the role of "selling shovels"; the company is extending down the industrial chain. In 2021, it established a subsidiary, Shuangliang Silicon Materials (Baotou) Co., Ltd., investing 7 billion yuan to build a 20GW large-size monocrystalline silicon wafer project in the first phase. In 2022, Shuangliang Eco-Energy continued to increase its investment in monocrystalline silicon wafers and monocrystalline silicon pulling projects, with an investment exceeding 16 billion yuan. Moreover, Shuangliang Eco-Energy also laid out photovoltaic modules, establishing Shuangliang New Energy Technology (Baotou) Co., Ltd., to carry out large-scale module project investments and production in the Baotou area, with a first-phase capacity of 5GW completed and sold in 2022.

At that time, benefiting from the high prosperity of the photovoltaic industry, Shuangliang Eco-Energy's operating income rose from 2.072 billion yuan in 2020 to 23.149 billion yuan in 2023, and the net profit attributable to the parent company increased from 137 million yuan to 1.502 billion yuan in 2023, growing more than tenfold, with a bright future ahead Photovoltaic Backlash

However, success and failure often come from the same source. With a severe oversupply of photovoltaic capacity and a sharp decline in prices after 2023, Shuangliang Eco-Energy's aggressive expansion strategy has suffered a heavy blow.

In 2024, Shuangliang Eco-Energy reported a net loss attributable to the parent company of 2.141 billion yuan, with revenue dropping to 13.038 billion yuan; entering 2025, the situation did not improve, and Shuangliang Eco-Energy's performance remained under pressure, with revenue further shrinking to 7.565 billion yuan and a net loss attributable to the parent company of 1.116 billion yuan, nearly wiping out all profits from previous years.

Currently, Shuangliang Eco-Energy's main business revenue comes from three major segments: energy-saving and water-saving equipment, new energy equipment, and photovoltaic products. Among them, new energy equipment mainly refers to polysilicon reduction furnaces and their modules, green electricity intelligent hydrogen production equipment, etc., while photovoltaic products include large-size monocrystalline silicon rods, silicon wafers, and high-efficiency photovoltaic modules, all of which are under pressure.

In 2025, Shuangliang Eco-Energy's new energy equipment business suffered a severe blow, with the most significant decline in performance, reporting operating revenue of 98.3554 million yuan, a year-on-year decrease of 89.61%, and a gross profit margin plummeting by 21.02 percentage points to 14.35%. The company's photovoltaic product operating revenue was 4.42 billion yuan, halving year-on-year, with the lowest gross profit margin at -10.79%.

Product sales were even more dismal. According to the annual report, in 2025, Shuangliang Eco-Energy sold 544 MW of modules, a year-on-year decrease of 73.21%; only 13 new energy equipment units were sold, a year-on-year decrease of 96.21%; sales of energy-saving and water-saving equipment and monocrystalline silicon wafers also declined year-on-year, totaling 934 units and 4.9013 million pieces, with decreases of 21.05% and 9.13%, respectively.

At its peak in 2022, Shuangliang Eco-Energy's polysilicon reduction furnace equipment sales reached 1,127 units. In 2025, regarding the decline in operating revenue, Shuangliang Eco-Energy's annual report admitted that it was mainly due to reduced sales of polysilicon reduction furnaces and photovoltaic products affected by the industry. The former glory has turned into a "dream of Nanke."

In the first quarter of 2026, Shuangliang Eco-Energy reported a loss of 394 million yuan, a year-on-year decline of 144.6%. The company explained that this was mainly due to losses in its photovoltaic-related businesses.

Cash Flow Tightening

The cost of aggressive expansion is accelerating its manifestation, as Shuangliang Eco-Energy's cash reserves continue to shrink. Financial report data shows that cash reserves were 6.081 billion yuan at the end of 2024, dropping to 4.109 billion yuan at the end of 2025, and only 2.755 billion yuan remaining at the end of the first quarter of 2026, with funds continuously tightening.

New financial expert and economist Yu Fenghui told reporters from the "Huaxia Times" that this directly reflects the company's potential cash flow tightness during this period. This situation is usually related to factors such as the company's expansion of investment, debt repayment, or rising operating costs. Specifically, if Shuangliang Eco-Energy made large-scale capital expenditures during this period or faced significant financial pressure, then this reduction in cash reserves would be understandable. However, it also signals to investors and management that they need to pay attention to the company's cash flow management situation to ensure sufficient liquidity to support daily operations and future investment plans At the same time, Shuangliang Eco-Energy's leverage ratio has surged significantly, and debt risk has accumulated notably.

Before 2021, the company's debt-to-asset ratio was around 40%. In 2021, the company's debt-to-asset ratio exceeded 70%, and in 2024 and 2025, the company's debt-to-asset ratio exceeded 80% for two consecutive years. By the end of the first quarter of 2026, the company's debt-to-asset ratio was 80.67%. More critically, the company's short-term loans reached 6.551 billion yuan, far exceeding its cash and cash equivalents during the same period, indicating a significant short-term repayment gap.

Yu Fenghui stated to reporters that this indicates the company indeed faces liquidity risk. A high debt-to-asset ratio means the company relies heavily on debt financing for operations, while short-term loans significantly exceeding cash and cash equivalents suggest substantial pressure on the company to repay its debts in the short term.

He further pointed out that if the company cannot timely adjust its debt structure or increase cash flow, it will face the risk of repayment difficulties, which could even lead to a downgrade in its credit rating, affecting its ability to secure further financing. Therefore, for Shuangliang Eco-Energy, it is crucial to take effective measures to improve cash flow and optimize the capital structure to reduce financial risk. Additionally, strengthening internal management and improving operational efficiency are key to alleviating the current predicament