On June 26th, Lin Jianwei should have been quite pleased after transferring 40 million yuan to Zhejiang Zheneng Electric Power Co., Ltd. (SH: 600023). Although it was a performance compensation payment, it meant he was one step closer to successfully cashing out and completely severing ties with Jiangsu Zhongli Group Co., Ltd. (SZ: 300393).

Eighteen years ago, Lin Jianwei and his wife Zhang Yuzheng co-founded Zhongli. After several attempts to sell the company, he finally found a buyer in Zheneng Electric Power in 2022.

Now, Lin Jianwei has successfully exited with a large sum of cash, while Zheneng Electric Power is left holding the bag. The acquisition price at the time was 17.18 yuan per share, but Zhongli's stock price is now just over 6 yuan, having once fallen as low as 4.62 yuan per share.

Zhejiang Zheneng Electric Power is a listed company under the state-owned Zhejiang Energy Group. As a leading provincial-level energy group in China, Zhejiang Energy Group is robust, with total assets reaching 350 billion yuan. In recent years, the group has intensified its shift towards new energy, acquiring or investing in several related companies.

Unfortunately, Zhejiang Energy has repeatedly stumbled. The problematic investments are not limited to Zhongli but also include Jiangsu Akcome Science & Technology Co., Ltd., Guokang New Energy, Fuda Technology, and Longyan Energy, among others.

These companies once had their glory days but found Zhejiang Energy to take over as they declined. Now, they have become burdens for Zhejiang Energy to manage.

A Deeply Underwater 1.8 Billion Yuan Acquisition

Zhongli was founded in March 2008 and became China's first listed company specializing in photovoltaic backsheets in 2014. It is a global leader in PV backsheet film with a 30% global market share and has been recognized as a Global New Energy Top 500 enterprise, a national Torch Plan key high-tech enterprise, a national-level green factory, and a national-level "Little Giant" enterprise.

However, Lin Jianwei never intended to build Zhongli into a century-old enterprise. Due to disorderly expansion, risks surged, leading to a sharp decline in profits and a significant increase in liabilities. Lin Jianwei tried every means to sell the company.

Zhongli announced plans to transfer control three times, but all three attempts failed. In 2022, Lin Jianwei approached Zhejiang Energy, which was looking to expand into new energy and was somewhat interested in Zhongli's PV manufacturing capabilities.

To facilitate the deal, Lin Jianwei made bold promises: Zhongli's cumulative net profit over three years would be no less than 1.6 billion yuan, or he would personally compensate the difference. With this performance guarantee, Lin Jianwei's fourth attempt to sell the company finally succeeded.

Zheneng Electric Power paid 1.817 billion yuan to acquire a 9.70% stake in Zhongli and obtained voting rights for an additional 10% of shares held by Lin Jianwei, thereby gaining control. The share transfer was completed in February 2023.

After the acquisition, Zhongli initially seemed to perform well, reporting net profits of 401 million yuan in 2022 and 527 million yuan in 2023. However, the situation deteriorated sharply in 2024, with a full-year loss of 856 million yuan.

Calculated this way, Zhongli's total net profit for the three years was only 71.54 million yuan, achieving just 4.47% of the promised 1.6 billion yuan, falling short by nearly 1.5 billion yuan.

As agreed, Lin Jianwei was required to compensate Zheneng Electric Power with 148 million yuan in cash. Although this is a real cash payment, it pales in comparison to the 1.817 billion yuan acquisition cost. More importantly, after relinquishing control, Lin Jianwei could confidently sell shares to cash out.

From March to May this year, Lin Jianwei sold over 32.67 million shares, cashing out more than 300 million yuan. Now, the mess is left to Zhejiang Energy.

In 2025, Zhongli's losses further expanded to 1.372 billion yuan, and it reported another loss of 274 million yuan in the first quarter of 2026. The company's 2025 board report indicated that some existing orders are expected to incur significant losses, leading to a provision for expected liabilities of 605 million yuan.

Zheneng Electric Power's annual report shows that for 2025, impairment losses related solely to Zhongli amounted to 367 million yuan, including 201 million yuan in asset impairment losses and 166 million yuan in credit impairment losses.

Repeated Setbacks in Industrial Park Projects

Besides taking over Zhongli, Zheneng Electric Power was also interested in another listed PV company, Akcome Science & Technology (original stock code 002610, now delisted). In August 2021, Zheneng Electric Power strategically invested 300 million yuan to subscribe to a capital increase in Akcome's subsidiary, Zhejiang Akcome Optoelectronics, acquiring a 20% stake.

Zhejiang Akcome Optoelectronics focused on high-efficiency heterojunction (HJT) PV cells and modules. Due to consecutive annual losses, significant idle capacity, and extreme financial strain, it was applied for bankruptcy reorganization by creditors in July 2024.

In April 2026, Zheneng Electric Power announced that due to Zhejiang Akcome Optoelectronics' bankruptcy, its remaining 6.85 million yuan shareholding was fully written off, and a full impairment loss was recognized.

To transform and expand its clean energy portfolio, Zhejiang Energy Group also established the Zhejiang Zheneng Smart Energy Technology Industrial Park in Changxing County, Huzhou City, Zhejiang. The park, covering approximately 2000 acres, focuses primarily on PV and hydrogen equipment manufacturing.

It attracted numerous new energy manufacturing projects, such as Akcome's new-generation high-efficiency solar cell project, which claimed a total investment of 10.6 billion yuan. With Akcome's delisting and bankruptcy, this project was halted, and the project company applied for bankruptcy in November 2024 due to inability to repay debts.

Beyond the "Akcome" entities, the park houses other troubled projects, such as Guokang New Energy. This company, focused on TOPCon PV modules, was applied for bankruptcy liquidation by creditors in December 2024, and the court ruled to proceed with liquidation.

In the energy storage sector, Zhejiang Energy Fuda, a benchmark project once highly anticipated by the group, also encountered difficulties. Zhejiang Energy Fuda specializes in lithium battery manufacturing. The project commenced product offline in October 2024, with an annual production capacity of 0.1GWh of lithium batteries and 500 tons of anode material.

However, it took only about a year and a half from production to crisis. In March 2026, its parent company, Zhejiang Fuda Technology Co., Ltd., entered pre-reorganization. On April 27 of the same year, Zhejiang Energy Fuda itself was also placed into pre-reorganization by the court, subsequently publicly soliciting potential restructuring investors.

In October 2025, the industrial park had already auctioned off related废旧 equipment and materials from Zhejiang Energy Fuda.

Besides the four companies entering bankruptcy or pre-reorganization, another new energy joint venture in the park has drawn external attention. In 2018, Zhejiang Energy Group invested in Hangzhou Longyan Energy, which focuses on cadmium telluride thin-film batteries. In 2019, the two parties jointly established Zhejiang Zheneng Longyan Energy, registered within the industrial park with a capital of 160 million yuan, in which the park holds a 20% stake.

The project aimed to industrialize Hangzhou Longyan Energy's thin-film technology within the park. However, according to the latest business registration information, the company's operational status in 2025 was listed as "ceased operations," with zero employees enrolled in social insurance. This indicates the company has not achieved scaled production and operation for years, remaining a long-term "idle" industrial placeholder project.

The Path Forward for Provincial Energy Groups

Among provincial energy groups, Zhejiang Energy Group leads in comprehensive strength, consistently ranking in the first tier. As of the end of 2025, the group's total assets reached 352.27 billion yuan.

Yet, even such a strong enterprise has paid substantial "tuition fees" in its new energy transition, highlighting the challenges of this path.

However, transitioning to new energy is a necessary new road for Zhejiang Energy Group. First, it faces dual pressures from the national "dual carbon" goals and Zhejiang's status as a "resource-scarce but energy-intensive province." Second, its traditional core business is severely squeezed by coal price fluctuations and electricity pricing policies, urgently requiring the development of clean energy to optimize its power generation mix and hedge against cyclical risks.

These issues are common among other provincial energy groups. Zhejiang Energy Group's missteps in new energy are objectively linked to the cyclical volatility of the PV industry, but subjectively stem from insufficient precision in investment timing.

Several projects where Zhejiang Energy invested were entered during peak industry hype. The Zhongli acquisition occurred in November 2022, when the PV industry was at a cyclical high. The strategic investment in Akcome happened in August 2021, also a time of high market enthusiasm for heterojunction technology.

After Zhejiang Energy entered, the industry entered a deep adjustment phase, with module prices falling from around 1.8 yuan/W in early 2023 to about 0.6 yuan/W by the end of 2025.

For state-owned energy groups known for stability, making large-scale investments at the peak of an industry cycle results in higher investment risks and longer waiting periods.

Compared to other provincial energy groups, Zhejiang Energy's transition pace is rapid, and it has been willing to commit substantial capital for exploration, a courage worthy of recognition.

How to improve the precision of investment decisions amidst industrial cycles, and how to achieve synergy between traditional and new energy businesses, are key factors determining whether it can truly complete its green transformation. This is the challenge facing Zhejiang Energy, and indeed a question all provincial energy groups must answer.