Equity Research: Aiko Solar (600732.SH)

Date: February 12, 2026
Rating: BUY-A (Upgraded)
Current Price: CNY 14.63
Target Price Implied Upside: Significant upside based on 2026/2027 earnings recovery and valuation rerating.
Analysts: Xiao Suo, Jia Huilin

Executive Summary

Aiko Solar (600732.SH) stands at the forefront of the photovoltaic (PV) industry’s technological transition, leveraging its proprietary All-Back Contact (ABC) technology to redefine efficiency standards and cost structures in the solar module market. Following a challenging period marked by industry-wide overcapacity and margin compression, Aiko is demonstrating a decisive inflection point in profitability and market positioning. We upgrade our rating to BUY-A, citing three pivotal catalysts: (1) a strategic patent licensing agreement with Maxeon that solidifies Aiko’s intellectual property moat in overseas markets; (2) a structural cost advantage driven by silver-free metallization amidst soaring silver prices, which has inverted the cost differential against mainstream TOPCon technology; and (3) robust demand traction in high-value distributed markets, evidenced by record-breaking shipment growth and premium pricing power.

The global PV industry is currently navigating a severe supply-demand imbalance, yet differentiation through technology is emerging as the primary driver of alpha. Aiko’s ABC technology, characterized by front-side grid-less design and back-contact architecture, offers superior aesthetics, higher conversion efficiency, and enhanced reliability compared to conventional PERC and TOPCon modules. Crucially, the recent surge in silver prices (from ~CNY 6,000/kg to >CNY 20,000/kg) has disproportionately impacted silver-dependent technologies like TOPCon. Aiko’s silver-free copper plating process has transformed from a niche technical feature into a significant economic advantage, lowering non-silicon costs by an estimated CNY 0.07–0.12/W relative to TOPCon.

Financially, the company is exiting the trough. In 2H 2025, Aiko reported its first quarterly net profit turnaround, with Q2 2025 achieving a net profit of CNY 63 million and gross margins recovering to 7.4%. Looking ahead, we project a vigorous revenue recovery, with total revenues expected to reach CNY 18.76 billion in 2025 (+68.2% YoY), CNY 26.95 billion in 2026 (+43.7% YoY), and CNY 37.84 billion in 2027 (+40.4% YoY). Net attributable profits are forecast to swing from a loss of CNY 1.51 billion in 2025 to profits of CNY 1.15 billion in 2026 and CNY 2.85 billion in 2027. At the current price of CNY 14.63, the stock trades at a forward P/E of 26.9x for 2026 and 10.9x for 2027, representing a compelling valuation discount relative to its growth trajectory and technological leadership.

This report provides a comprehensive analysis of Aiko Solar’s competitive landscape, the structural advantages of BC technology, the impact of the Maxeon partnership, detailed financial modeling, and risk assessment. We argue that Aiko is not merely participating in the BC trend but is defining it, creating a sustainable competitive advantage that warrants a premium valuation multiple as earnings visibility improves.

Key Takeaways

1. Strategic Moat Strengthened: Maxeon Patent Licensing Agreement

On February 7, 2026, Aiko Solar announced a landmark intellectual property agreement with Maxeon Solar Technologies. Under this agreement, Aiko has secured authorization for all past and future (next 5 years) BC battery and module patents held solely or jointly by Maxeon for markets outside the United States.
* No Reverse Licensing: Critically, the agreement does not require Aiko to provide reverse licensing of its own proprietary ABC patents to Maxeon, preserving Aiko’s core IP independence.
* Cost Pass-Through: Any additional patent fees incurred are structured to be passed through via product price adjustments, mitigating margin impact.
* Global Barrier Construction: By combining its own proprietary silver-free BC patents with Maxeon’s extensive BC patent portfolio, Aiko constructs an exceptionally high technical and legal barrier in overseas markets. This effectively neutralizes potential IP litigation risks that have historically plagued cross-border PV expansion and extends the "dividend period" of BC technology superiority well beyond the typical lifecycle of PERC and TOPCon iterations.

2. Structural Cost Advantage: The Silver-Free Paradigm Shift

The economics of PV manufacturing have undergone a fundamental shift due to commodity price volatility. Silver paste, a critical material for conductive grids in standard cells, has seen prices skyrocket from CNY 5,000–7,000/kg in early 2025 to approximately CNY 20,000–21,000/kg by early 2026.
* TOPCon Cost Pressure: For standard TOPCon modules, this surge has increased non-silicon costs by an estimated CNY 0.11–0.15/W. Silver paste now constitutes the highest material cost component in module production.
* Aiko’s Inversion: Aiko’s ABC technology utilizes a copper-plating, silver-free metallization process. Prior to the silver price spike, ABC had a slight non-silicon cost disadvantage of CNY 0.03–0.05/W compared to TOPCon. However, post-spike, the dynamic has reversed. ABC now enjoys a non-silicon cost advantage of CNY 0.07–0.12/W over standard TOPCon.
* Sustainability: This cost advantage is structural, not cyclical. As long as silver remains expensive and scarce, Aiko’s copper-based approach offers a durable margin buffer that competitors relying on silver paste cannot easily replicate without significant capex and process re-engineering.

3. Product Leadership: Unmatched Efficiency and Performance

Aiko continues to lead the global industry in mass-production efficiency, a key metric for Levelized Cost of Energy (LCOE) reduction.
* Record Efficiency: As of January 2026, Aiko’s ABC modules have maintained the #1 spot in global mass-production module efficiency for 35 consecutive months. In December 2025, the company refreshed its own record with a mass-production efficiency of 24.8%.
* Generation Gain: Empirical data from pilot projects in Tianjin (residential), Jiangsu (C&I), and Shandong (offshore) demonstrates that ABC modules generate 6–10% more electricity per unit area compared to TOPCon modules under identical conditions. Specifically, generation gains were recorded at 6.89% (residential), 5.95% (C&I), and 10.14% (offshore).
* Low-Light Performance: In low-irradiance conditions (<400 W/m²), ABC modules show superior equivalent utilization hours, outperforming TOPCon by ~0.75% and HJT by ~3.34%, highlighting their advantage in diverse weather conditions.

4. Market Traction: Premium Pricing and Robust Order Book

Demand for ABC modules is accelerating, particularly in high-value overseas markets where aesthetics and efficiency command a premium.
* Shipment Growth: In 1H 2025, Aiko’s N-type ABC module shipments reached 8.57 GW, a year-over-year increase of over 40%.
* Order Visibility: The company secured new domestic and international procurement orders totaling approximately 10 GW in 1H 2025, indicating a supply-constrained environment for its premium products.
* Overseas Mix: In Q2 2025, overseas sales accounted for over 40% of total module volume. Markets such as Switzerland, Czech Republic, UK, Netherlands, Germany, and Australia have shown strong adoption.
* Pricing Power: ABC modules command a significant premium. According to Infolink data (Feb 4, 2026), centralized BC modules are priced at CNY 0.80/W (a 15.9% premium over TOPCon), while distributed BC modules are priced at CNY 0.84/W (a 10.5% premium). In specific high-end distributed segments, premiums can reach 10–50%, with third-generation "Full-Screen" modules achieving premiums exceeding 50%.

5. Financial Turnaround and Valuation Appeal

The company has successfully navigated the industry downturn, with operational metrics turning positive ahead of consensus expectations.
* Profitability Inflection: Q2 2025 marked the first quarter of net profit positivity (CNY 63 million) after several quarters of losses. Gross margins improved sequentially from 0.5% in Q1 to 7.4% in Q2. Operating cash flow turned positive in Q1 2025 (CNY 720 million) and strengthened in Q2 (CNY 1.14 billion).
* Earnings Forecast: We forecast a return to robust profitability in 2026, with Net Profit reaching CNY 1.15 billion, followed by CNY 2.85 billion in 2027.
* Valuation: At the current price, the 2026E P/E is 26.9x, and the 2027E P/E is 10.9x. This is below the average of comparable peers (Longi, Jinko, Trina, etc.), suggesting the market has not fully priced in the magnitude of Aiko’s earnings recovery and its unique technological moat.

Company Overview & Historical Context

Corporate Profile

Established in 2009, Aiko Solar has evolved from a specialized cell manufacturer into a globally integrated PV technology leader. The company’s strategic pivot towards Back Contact (BC) technology began in earnest with the invention of its proprietary ABC (All Back Contact) cell and module technology in 2021. Unlike traditional cells that have metal grids on the front surface, ABC technology moves all electrodes to the rear, maximizing light absorption and aesthetic appeal.

Key Milestones:
* 2009: Company founded.
* 2021: Invention of ABC PV cell/module technology.
* 2023-2024: Rapid scaling of ABC capacity in Zhuhai and Yiwu.
* 2025: Launch of 3rd Generation "Full-Screen" and "Navigator" ABC modules, achieving >25% efficiency in lab/prototype stages and 24.8% in mass production.
* 2026: Securing Maxeon patent license; achieving consistent quarterly profitability.

Shareholding Structure

The company is controlled by Chairman Mr. Chen Gang, who holds a 15.49% stake. Mr. Chen brings over a decade of experience in the PV industry, providing strategic continuity in technology roadmap and market expansion. Institutional investors, including UBS AG, Morgan Stanley, and various domestic funds (Invesco Great Wall, E Fund, etc.), participated in a recent private placement (completed Sept 2025), signaling strong institutional confidence in the company’s long-term prospects. The recent capital injection of CNY 3.5 billion (net) is primarily allocated to expanding the 15GW high-efficiency crystalline silicon cell project in Yiwu and supplementing working capital, thereby optimizing the capital structure and reducing leverage ratios.

Source: Company Announcement, Shanxi Securities Institute (Data as of Sept 22, 2025)

Recent Financial Performance: The Turning Point

The fiscal years 2023 and 2024 were challenging for the entire PV sector, characterized by intense price wars and inventory write-downs. Aiko was not immune, reporting a net loss of CNY 5.32 billion in 2024. However, the first half of 2025 signaled a decisive turnaround.

• Revenue: 1H 2025 revenue reached CNY 8.45 billion, up 63.6% YoY, driven by the ramp-up in ABC module shipments.
• Profitability: 1H 2025 Net Loss narrowed significantly to CNY 240 million (an 86.4% improvement YoY). Q2 2025 alone achieved a net profit of CNY 63 million.
• Cash Flow: Operating cash flow turned positive in Q1 2025 (CNY 720 million) after six consecutive quarters of outflows, further improving to CNY 1.14 billion in Q2. This indicates improved working capital management and stronger cash collection from sales.
• Gross Margin: Recovered from negative territory in 2024 (-9.9%) to 0.5% in Q1 2025 and 7.4% in Q2 2025. The sequential improvement of 6.9 percentage points in Q2 reflects the higher mix of high-margin overseas ABC sales and the cost benefits of the silver-free process.

Industry Analysis: The Rise of BC Technology

The photovoltaic industry is currently in a phase of technological iteration. While TOPCon (Tunnel Oxide Passivated Contact) has become the mainstream mainstream technology replacing PERC, Back Contact (BC) technology is emerging as the next-generation platform, particularly for high-end and distributed applications.

2.1 Cost Dynamics: The Silver Crisis and BC’s Advantage

The most immediate driver for BC adoption is economic, driven by the volatility of silver prices.

Silver Consumption in PV:
* PERC: ~74 mg/wafer.
* TOPCon: ~86 mg/wafer (due to double-sided printing requirements).
* HJT: ~75 mg/wafer (low-temperature silver paste).
* ABC: 0 mg silver (uses copper plating).

As of February 9, 2026, SMM data indicates TOPCon front-side fine grid silver paste is priced at CNY 21,000/ton, and back-side at CNY 20,000/ton.
* TOPCon Silver Cost: Estimated at CNY 0.18–0.22/W for standard modules and CNY 0.24–0.27/W for high-power modules. This represents an increase of CNY 0.11–0.15/W compared to six months ago when silver was ~CNY 8,650/kg.
* ABC Cost Structure: Aiko’s ABC process involves copper plating. The incremental costs include:
* Copper plating materials: +CNY 0.04–0.05/W
* Electricity: +CNY 0.03/W
* Depreciation/Other: +CNY 0.01–0.02/W
* Total Incremental Non-Silver Cost: ~CNY 0.08–0.10/W.
* Net Advantage: Before the silver spike, ABC was at a disadvantage of CNY 0.03–0.05/W. With silver at CNY 20,000/kg, the savings from eliminating silver (~CNY 0.16–0.20/W) far outweigh the incremental copper processing costs. Consequently, ABC now holds a non-silicon cost advantage of CNY 0.07–0.12/W over TOPCon.

This cost inversion is critical. It means that even if ABC modules were sold at parity with TOPCon, Aiko would enjoy higher gross margins. In reality, ABC sells at a premium, compounding the margin benefit.

2.2 Performance Superiority: Efficiency, Aesthetics, and Reliability

BC technology is widely regarded as the "ultimate" path for crystalline silicon solar cells due to its theoretical efficiency ceiling and physical advantages.

Efficiency

• Theoretical Limit: BC technology has a theoretical efficiency limit of 29.1%, higher than TOPCon (28.7%), HJT (28.5%), and PERC (25.0%).
• Optical Gains: By moving all electrodes to the back, BC cells eliminate front-side shading losses (typically 3–5% in standard cells). This increases photon utilization to 97.3%.
• Reduced Parasitic Absorption: The PN junction is located on the rear, avoiding parasitic absorption from front-side doping layers.
• Mass Production Leader: Aiko’s 24.8% mass-production efficiency is the industry benchmark, consistently leading TaiyangNews rankings for 35 months.

Aesthetics

• Pure Black Appearance: The absence of front busbars and finger grids gives BC modules a uniform, sleek, pure-black appearance. This is highly valued in residential and commercial building-integrated photovoltaics (BIPV) where visual integration is paramount.
• Market Differentiation: In European and Australian residential markets, aesthetics are a primary purchase driver, allowing BC modules to command significant brand premiums.

Reliability and Durability

• Temperature Coefficient: BC modules exhibit a better power temperature coefficient (-0.26%/°C) compared to TOPCon (-0.29%/°C). This means BC modules lose less power in hot climates, enhancing energy yield in regions like the Middle East, Southern Europe, and Australia.
• Degradation: BC modules offer a lower annual degradation rate (0.35% vs. 0.40% for TOPCon). Over a 30-year lifespan, this results in a cumulative performance advantage of ~1.45%.
• Shadow Tolerance: The distributed micro-grid structure of BC cells allows for independent bypass functionality. If one part of the module is shaded, only that specific section is affected, rather than shutting down a whole string. Lab tests show BC modules improve shadow tolerance by up to 34% compared to TOPCon.
• Hot Spot Resistance: TUV Rheinland tests indicate that under full shading for 1 hour, BC cell hot spot temperatures are 30% lower than TOPCon cells, significantly reducing fire risk and long-term damage.
• Micro-crack Resistance: Structural innovations in BC module assembly reduce the risk of micro-cracks by approximately 87% as verified by EL testing.

2.3 Pricing Power: Sustained Premiums

Despite the general deflationary trend in PV module prices, BC technology maintains a robust premium due to its differentiated value proposition.

Infolink Pricing Data (Feb 4, 2026):
* Centralized BC Modules (182/210mm): CNY 0.80/W.
* Premium vs. TOPCon: +15.9%
* Distributed BC Modules: CNY 0.84/W.
* Premium vs. TOPCon: +10.5%

In specific high-end overseas distributed channels, the premium is even higher, ranging from 10% to 50%. Aiko’s third-generation "Full-Screen" modules, with their enhanced efficiency and aesthetic appeal, often achieve premiums exceeding 50% in niche luxury residential segments. This pricing power insulates Aiko from the brutal price competition seen in the standardized TOPCon market.

2.4 Ecosystem Expansion: Industry-Wide Adoption

BC technology is no longer a niche strategy; it is becoming a mainstream industry direction.

• Capacity Growth: As of January 2025, annualized BC cell capacity in China reached 86 GW. Monthly production in Jan 2026 was 4.13 GW, with utilization rates at 57.63%.
• Competitor Entry: Over 20 major enterprises have announced BC initiatives, including:
  • LONGi Green Energy: Aggressively expanding HPBC 2.0 capacity to 50 GW by end-2025.
  • TCL Solar: Launched new BC modules in Japan.
  • Trina Solar: Showcased THBC products with >25.5% efficiency.
  • Jinko Solar & JA Solar: Developing HBC (Hybrid BC) lines.
  • Tongwei: R&D efficiency for TBC cells reached 26.84%.
• Supply Chain Maturation: The BC ecosystem is rapidly maturing, with specialized equipment and materials suppliers emerging:
  • Laser Equipment: DR Laser (帝尔激光) has developed laser micro-etching techniques replacing traditional lithography, reducing capex.
  • Materials: Foster (福斯特) developed ultra-low weight encapsulation films and black aesthetic films for BC. Saiwu Technology (赛伍技术) offers water-resistant backsheets. Polymer Material (聚和材料) and Boken New Materials (博迁新材) are developing silver-copper pastes and conductive adhesives tailored for BC.
• Collaborative Innovation: The establishment of the "Global BC Ecological Collaborative Innovation Center" in Jiaxing in August 2025 underscores the industry’s commitment to accelerating BC industrialization.

While competition is increasing, Aiko’s first-mover advantage, proprietary silver-free process, and now the Maxeon patent shield, position it favorably against late entrants who may still rely on silver-heavy processes or lack the same level of process optimization.

Aiko Solar: Competitive Positioning and Operational Analysis

3.1 Technological Leadership: The ABC Platform

Aiko’s ABC technology is built on five core pillars that differentiate it from competitors:

1. Full-Area Light Absorption & Full-Silicon Power Generation: Elimination of front grids ensures 100% of the front surface absorbs light. High-quality passivation minimizes recombination losses.
2. Full-Back Electrode Technology: All electrodes are on the rear, optimizing current transport and reducing resistive losses by 60%.
3. Full-Back Passivated Contact: Proprietary patent technology achieves front surface passivation <1 fA/cm² and weighted average rear recombination <2 fA/cm², crucial for high Voc (Open Circuit Voltage).
4. Silver-Free Metal Coating: The proprietary copper plating process eliminates silver dependency, solving the industry’s cost bottleneck and supply chain risk.
5. End-to-End Innovation: Integrated control from cell to module ensures quality consistency and supply chain stability.

Product Portfolio:
* Comet Series: High-efficiency standard modules.
* Navigator Series: Latest generation with >25% efficiency potential.
* Full-Screen Modules: Available in 54, 72, and 78 cell configurations. The 78-cell version reaches 800–810W power output with 25% efficiency.
* Bifacial ABC: Aiko has achieved a bifaciality factor of 80 ± 5% for its ABC modules, a significant improvement that makes them competitive in utility-scale applications where rear-side gain is valuable. This level of bifaciality was previously a weakness of BC tech but has been resolved by Aiko.

3.2 Empirical Performance: Real-World Generation Gains

Laboratory efficiency is one metric; real-world energy yield is what matters to customers. Aiko has conducted extensive empirical studies across diverse environments.

Case Study 1: Residential (Tianjin Jizhou)
* Scenario: Rooftop residential installation.
* Result: ABC modules generated 6.89% more electricity per unit area than TOPCon.
* Per kW Gain: 1.26% higher yield per installed kW.

Case Study 2: Commercial & Industrial (Jiangsu Nanjing)
* Scenario: Industrial rooftop.
* Result: ABC modules generated 5.95% more electricity per unit area than TOPCon.
* Per kW Gain: 1.81% higher yield per installed kW.

Case Study 3: Offshore/Marine (Shandong Yantai)
* Scenario: Coastal environment with high humidity and potential salt mist.
* Result: ABC modules generated 10.14% more electricity per unit area than TOPCon.
* Per kW Gain: 5.19% higher yield per installed kW.
* Note: The superior performance in offshore settings highlights ABC’s resilience to environmental stressors and potentially better low-light/reflective light utilization.

Irradiance Analysis (Foshan Project):
Data from a comparative project in Foshan (March–August 2025) showed:
* Low Irradiance (<400 W/m²): ABC equivalent utilization hours were +0.75% vs. TOPCon and +3.34% vs. HJT.
* High Irradiance (≥400 W/m²): ABC equivalent utilization hours were +2.19% vs. TOPCon and +3.38% vs. HJT.
This confirms that ABC’s efficiency advantage is consistent across all weather conditions, amplifying total annual energy yield.

3.3 Market Execution: Sales, Orders, and Global Footprint

Aiko has successfully transitioned from a technology developer to a commercial scale-up phase.

Shipment Volume:
* 1H 2025: ABC module shipments reached 8.57 GW, a >40% YoY increase.
* Order Book: New orders secured in 1H 2025 totaled ~10 GW, indicating strong demand visibility for the remainder of the year and into 2026.
* Capacity Utilization: The company’s production lines in Zhuhai and Yiwu are operating at high utilization rates to meet this demand.

Geographic Mix:
* Overseas Focus: In Q2 2025, overseas sales accounted for >40% of total volume. This is a strategic shift towards higher-margin markets.
* Key Markets:
* Europe: Leading market share in Switzerland, Czech Republic, and UK. Rapid growth in Netherlands and Germany. Aiko is establishing itself as a premium brand in Europe.
* Asia-Pacific: Strong presence in Japan, Australia, and South Korea.
* Domestic: While focusing on exports, Aiko is also breaking into the domestic centralized market.

Breakthroughs in Centralized Procurement:
Historically, BC was seen as a distributed-only product due to cost. However, Aiko’s cost reductions and the introduction of high-bifaciality (80%) modules have opened the utility-scale segment.
* Datang Group: Won the bid for a 1 GW BC module package in early 2025.
* CNPC & South-to-North Water Diversion: Successfully won BC packages in central SOE (State-Owned Enterprise) procurements.
These wins validate that ABC is now cost-competitive and technically viable for large-scale ground-mounted plants, significantly expanding the total addressable market (TAM).

Capacity Expansion Roadmap:
Aiko is aggressively expanding capacity to meet demand, with a long-term plan of 106 GW.
* Zhuhai Phase I: 10 GW (Operational).
* Yiwu Phase I: 8 GW (Operational).
* Yiwu Phase II: 7 GW (Under Construction).
* Shandong Phase I: 10 GW (Under Construction).
* Guangxi Baise: 12 GW Cell / 6 GW Module (Planned, via joint venture/tech licensing).
* Recent Financing: The CNY 3.5 billion private placement will fund the Yiwu Phase III (15 GW) project, ensuring capacity keeps pace with order growth.

Financial Analysis and Valuation

4.1 Revenue and Profitability Forecast

Our financial model is built on the following key assumptions:

1. ABC Module Segment:
* Shipments: We project shipments of 18 GW in 2025, 28 GW in 2026, and 42 GW in 2027. This reflects the ramp-up of new capacity and increasing market penetration.
* Pricing: Assuming an average selling price (ASP) of CNY 0.76/W in 2025, CNY 0.78/W in 2026, and CNY 0.77/W in 2027. These prices reflect a moderate decline from current premium levels as volume scales, but remain significantly above TOPCon averages.
* Revenue: CNY 13.68 billion (2025E), CNY 21.84 billion (2026E), CNY 32.34 billion (2027E).
* Gross Margin: Expected to improve from 10.5% in 2025 to 20.5% in 2026 and 20.8% in 2027, driven by economies of scale, yield improvements, and the sustained cost advantage of silver-free production.

2. Battery Cell Segment:
* Shipments: External cell sales are expected to decline as Aiko integrates more capacity into its own module production. Shipments forecast at 15 GW (2025E), 12 GW (2026E), and 10 GW (2027E).
* Pricing: ASP assumed at CNY 0.25–0.27/W.
* Revenue: CNY 3.78 billion (2025E), CNY 3.19 billion (2026E), CNY 2.65 billion (2027E).
* Gross Margin: Margins in the cell segment remain thin or slightly negative (-7.1% in 2025E) due to competitive pressure, but this is a strategic trade-off to support the higher-margin module business.

Consolidated Forecast:

Source: Shanxi Securities Institute Estimates

Key Observations:
* 2025: A transition year. Revenue surges, but full-year net loss persists due to residual inventory write-downs and ramp-up costs. However, H2 2025 is expected to be strongly profitable.
* 2026: The breakout year. Full-year profitability returns with CNY 1.15 billion net profit. Margins expand to 17.5% as the high-margin overseas mix increases and silver cost savings fully materialize.
* 2027: Scale effects dominate. Revenue approaches CNY 38 billion, with net profit nearing CNY 2.85 billion. Net margin expands to 7.5%.

4.2 Cash Flow and Balance Sheet Health

• Operating Cash Flow: Projected to turn positive in 2025 (CNY 916 million) and strengthen significantly in 2026 (CNY 1.79 billion) and 2027 (CNY 7.24 billion). This reflects improved working capital cycles and profitable operations.
• Capital Expenditure: Capex remains elevated in 2025–2026 to fund the Yiwu and Shandong expansions but is expected to stabilize as capacity targets are met.
• Debt Management: The recent equity raise helps deleverage the balance sheet. We expect the debt-to-asset ratio to peak in 2025 (89.6%) and gradually decline to 82.9% by 2027 as retained earnings accumulate.

4.3 Valuation Analysis

We employ a relative valuation approach, comparing Aiko to its primary peers: LONGi Green Energy, Junda Shares, and Tongwei Co.

Peer Comparison (as of Feb 11, 2026):

Source: Wind, Shanxi Securities Institute. Note: P/E for loss-making years is not meaningful.

Valuation Conclusion:
* Discount to Peers: Aiko trades at a 2026E P/E of 26.9x, which is a significant discount to the peer average of 46.3x. For 2027E, the discount widens further (10.9x vs 24.6x).
* Justification for Rerating: This discount likely reflects lingering concerns about the 2024/2025 losses and execution risk. However, given:
1. The confirmed turnaround in 2H 2025.
2. The structural cost advantage (silver-free) that peers do not fully possess.
3. The higher growth rate projected for Aiko (40%+ revenue CAGR) compared to mature peers.
4. The protective moat from the Maxeon agreement.

We believe the market is undervaluing Aiko’s earnings power. A rerating towards the peer average P/E would imply significant upside. Even maintaining a conservative P/E of 20x on 2027 earnings would suggest a target price well above current levels.

Investment Rating: BUY-A (Upgraded). The combination of visible earnings recovery, technological moat, and attractive valuation supports a positive outlook.

Risks / Headwinds

While the investment thesis is strong, investors must consider the following risks:

1. Overseas Market Risk

Aiko’s profitability is increasingly dependent on overseas markets (Europe, Australia, etc.), which offer higher margins.
* Trade Barriers: Potential tariffs, anti-dumping duties, or local content requirements in the EU or US could disrupt sales channels.
* Regulatory Changes: Changes in subsidy schemes (e.g., net metering policies) in key European markets could dampen residential demand.
* Currency Fluctuation: Revenue is earned in foreign currencies (EUR, USD, AUD), while costs are largely in CNY. Significant appreciation of the CNY could erode margins.

2. Intensifying Industry Competition

The BC track is attracting significant competition.
* Capacity Oversupply: If competitors like LONGi, Trina, and Jinko ramp up BC capacity faster than demand grows, it could lead to price erosion, compressing the premium Aiko currently enjoys.
* "Involution" (Neijuan): If government policies to curb excessive capacity expansion are ineffective, the industry may revert to destructive price wars, dragging down margins for all players, including Aiko.

3. Supply Chain Stability

• Raw Material Prices: While Aiko is insulated from silver prices, it relies on copper, chemicals, and silicon wafers. Volatility in these inputs could impact costs.
• Equipment Availability: The ramp-up of BC capacity depends on the availability of specialized laser and plating equipment. Bottlenecks here could delay expansion plans.

4. Execution Risk: Shipment Misses

• Demand Uncertainty: If global PV demand growth slows due to macroeconomic factors or grid connection bottlenecks, Aiko’s ambitious shipment targets (18GW in 2025, 28GW in 2026) may not be met.
• Production Yield: Achieving high yields in complex BC processes is challenging. Any technical hiccups in new factories (Yiwu/Shandong) could impact profitability.

5. Share Unlocking Pressure

The private placement shares issued in September 2025 will have a lock-up period. Upon unlocking, institutional investors may choose to sell, creating short-term downward pressure on the stock price. Investors should monitor the unlock schedule and potential trading plans of major shareholders.

Investment View

Aiko Solar represents a compelling "Turnaround + Growth" opportunity in the PV sector.

The narrative for Aiko has shifted from a story of technological promise to one of commercial validation and financial recovery. The convergence of three factors creates a powerful investment case:

1. Technological Moat is Real and Monetizable: The silver-free ABC process is no longer just a lab curiosity; it is a cost-saving engine in a high-silver-price environment. The Maxeon patent deal secures this advantage globally, removing a major overhang for international expansion.
2. Financial Inflection is Confirmed: The return to positive operating cash flow and net profit in Q2 2025 is a hard data point that validates the operational turnaround. The guidance for 2026–2027 suggests this is not a one-quarter blip but the start of a multi-year growth cycle.
3. Valuation Disconnect: The market is pricing Aiko as a distressed asset emerging from losses, rather than a high-growth technology leader. The forward P/E of 10.9x for 2027 is excessively cheap for a company with 40%+ revenue growth and a unique competitive position.

Strategic Recommendation:
We recommend institutional investors accumulate positions in Aiko Solar. The stock offers asymmetric upside: the downside is limited by the tangible asset base and current cash flow generation, while the upside is driven by earnings multiple expansion as profitability becomes consistent and the market recognizes the durability of the BC premium.

Key Catalysts to Monitor:
* Quarterly Earnings Reports: Confirmation of margin expansion in H2 2025 and full-year 2025.
* Overseas Order Announcements: Continued wins in Europe and Australia.
* Competitor Pricing: Monitoring whether BC premiums hold steady as more supply enters the market.
* Silver Price Trends: Continued high silver prices reinforce Aiko’s cost advantage.

In conclusion, Aiko Solar has successfully navigated the "valley of death" for new PV technologies. It is now poised to capture significant value in the next generation of solar manufacturing. We maintain our BUY-A rating with a positive long-term outlook.

Appendix: Detailed Financial Statements

Income Statement Forecast (CNY Million)

Balance Sheet Forecast (CNY Million)

Cash Flow Forecast (CNY Million)

Key Financial Ratios

Analyst Certification

The analysts named in this report certify that they have accurately represented their personal, objective views regarding the subject securities or issuers. They confirm that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this report.

Disclaimer

This report is prepared by Shanxi Securities Co., Ltd. ("the Company"). The information contained herein is based on sources believed to be reliable, but the Company does not guarantee its accuracy or completeness. This report is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investors should conduct their own independent research and consult with financial advisors before making investment decisions. The Company and its affiliates may hold positions in the securities mentioned and may engage in transactions inconsistent with the views expressed herein. Past performance is not indicative of future results.