Strategic Pivot to Space Photovoltaics: Junda Shares (002865.SZ) Initiates Partnership with Shangyi Optoelectronics

Date: December 30, 2025
Ticker: 002865.SZ (Shenzhen Stock Exchange)
Rating: BUY (Maintained)
Current Price: CNY 53.63
Target Valuation Context: 2026E P/E of 27.1x; 2027E P/E of 15.4x
Analysts: Zhang Han (S1050521110008), Luo Dixiao (S1050525070001)
Source: Huaxin Securities Research

Executive Summary

Junda Shares (002865.SZ), a leading specialized manufacturer of N-type solar cells, has announced a strategic collaboration with Shangyi Optoelectronics to pioneer the development and industrialization of flexible perovskite photovoltaic (PV) technologies for space applications. This partnership, formalized through a "Strategic Cooperation Framework Agreement" signed on December 21, 2025, marks a significant diversification of Junda’s technological portfolio beyond terrestrial solar markets into the high-value, emerging sector of space energy solutions. The agreement encompasses joint R&D, potential strategic equity investment by Junda in Shangyi, and the eventual commercial deployment of space-grade perovskite products.

From a fundamental perspective, Junda is navigating a transitional phase in the broader PV industry. While the company reported a net loss of CNY 155 million in Q3 2025, this represents a notable narrowing of losses compared to the previous year, signaling an inflection point driven by industry-wide anti-involution policies and stabilizing supply chain prices. Crucially, Junda’s overseas sales contribution has surpassed 50% as of Q3 2025, underscoring the success of its international expansion strategy and mitigating reliance on the saturated domestic market.

Technologically, Junda maintains a competitive edge in next-generation cell efficiency. Its laboratory efficiency for perovskite-tandem cells has reached 32.08%, placing it at the forefront of the industry. The successful offline production of its first industrialized N-type + perovskite tandem cell in November 2025 demonstrates tangible progress in scaling these advanced technologies.

We maintain our BUY rating on Junda Shares. Our investment thesis is anchored in three pillars: (1) the cyclical recovery of the PV industry benefiting specialized leaders like Junda; (2) robust growth in high-margin overseas markets; and (3) the optionality and long-term growth potential provided by the strategic entry into the space photovoltaics sector via the Shangyi partnership. We project a return to profitability in 2026, with estimated EPS of CNY 1.98, rising to CNY 3.49 in 2027. At current levels, the stock trades at attractive forward multiples relative to its projected earnings recovery and technological leadership.

Key Takeaways

1. Strategic Entry into Space Photovoltaics: A High-Barrier Moat

The collaboration with Shangyi Optoelectronics is not merely a symbolic gesture but a calculated move to secure a position in a nascent, high-barrier market segment. Space photovoltaics require distinct material properties compared to terrestrial applications, specifically demanding ultra-lightweight structures, high radiation resistance, and flexibility for deployment on satellites and space stations.

• Technological Synergy: Perovskite cells are uniquely suited for space applications due to their high power-to-weight ratio and tunable bandgaps. Junda’s existing expertise in N-type cell manufacturing and its advanced R&D in perovskite tandem technologies provide the industrial foundation, while Shangyi brings specialized knowledge in aerospace adaptation and satellite integration.
• Competitive Landscape: The space PV market is currently dominated by traditional multi-junction III-V compound semiconductor cells, which are expensive and rigid. Flexible perovskite technology offers a disruptive cost-performance advantage. By partnering with Shangyi, a scarce domestic producer of satellite batteries with a core team focused on aerospace perovskites, Junda effectively bypasses the steep learning curve associated with aerospace certification and application-specific engineering.
• Commercialization Pathway: The agreement outlines a clear roadmap: joint R&D $\rightarrow$ strategic investment $\rightarrow$ industrialization. This phased approach allows Junda to manage capital expenditure risks while securing early access to intellectual property and future revenue streams from space infrastructure projects, which are expected to grow exponentially with the proliferation of low-earth orbit (LEO) satellite constellations.

2. Technological Leadership in Next-Generation Cells

Junda continues to demonstrate superior R&D capabilities, particularly in the transition from standard N-type TOPCon to advanced tandem architectures.

• Efficiency Milestones: The company’s perovskite-tandem cell laboratory efficiency of 32.08% is a critical metric. In the PV industry, every percentage point gain in efficiency translates directly to lower Levelized Cost of Energy (LCOE). This efficiency level places Junda among the global leaders, competing closely with top-tier international research institutes and tech giants.
• Industrialization Progress: The milestone achieved in November 2025—downlining the first industrialized N-type + perovskite tandem cell—validates the scalability of their lab results. Moving from lab-scale spin-coating to industrial-scale deposition is the primary bottleneck for perovskite commercialization. Junda’s ability to produce pilot units suggests mastery over process control, uniformity, and yield management, which are prerequisites for mass production.
• R&D Ecosystem: Junda’s collaborative network includes Ren Shuo Guangdian, the Chinese Academy of Sciences (CAS), and Soochow University. This open-innovation model accelerates technology transfer and reduces internal R&D burdens, allowing the company to stay ahead of the technology curve without bearing the full cost of basic research.

3. Financial Inflection: Loss Narrowing and Overseas Resilience

Despite the challenging macro environment for the PV sector in 2024-2025, Junda’s financials show signs of stabilization and structural improvement.

• Q3 2025 Performance: The single-quarter net loss of CNY 155 million in Q3 2025, while still negative, indicates a significant reduction in loss magnitude compared to prior periods. This improvement is attributed to:
  • Price Stabilization: Industry-wide efforts to curb irrational price competition ("anti-involution") have led to a gradual recovery in module and cell prices.
  • Cost Optimization: As a specialized player, Junda benefits from economies of scale and operational efficiencies that integrated giants may struggle to achieve during downturns.
• Overseas Expansion Success: With overseas sales accounting for over 50% of total revenue in Q3 2025, Junda has successfully diversified its geographic risk. International markets, particularly in the Middle East, Europe, and emerging Asia, often offer higher margins than the fiercely competitive domestic Chinese market. The company’s planned expansion of high-efficiency battery capacity overseas is strategically timed to capture this demand.
• Balance Sheet Health: The company maintains a robust cash position, with cash and cash equivalents totaling CNY 3.235 billion (2025E). This liquidity buffer is crucial for funding R&D in perovskite technologies and supporting the strategic investment in Shangyi Optoelectronics without jeopardizing operational stability.

4. Valuation and Earnings Recovery Trajectory

Our financial models project a sharp turnaround in Junda’s profitability starting in 2026, driven by volume growth, margin expansion, and the maturation of high-efficiency product lines.

• Revenue Growth: We forecast revenue to decline by 19.9% in 2025 to CNY 7.97 billion, reflecting the ongoing industry consolidation and price adjustments. However, we anticipate a strong rebound in 2026, with revenue growing 39.9% to CNY 11.14 billion, and further expanding to CNY 13.37 billion in 2027.
• Profitability Swing: The company is expected to swing from a net loss of CNY 532 million in 2025E to a net profit of CNY 580 million in 2026E, and CNY 1.02 billion in 2027E. This implies a Net Margin expansion from -6.7% in 2025E to 5.2% in 2026E and 7.6% in 2027E.
• Valuation Metrics: At the current price of CNY 53.63, the stock trades at a 2026E P/E of 27.1x and a 2027E P/E of 15.4x. Given the high growth rate of earnings (76.1% CAGR from 2026 to 2027) and the strategic optionality of the space PV business, this valuation appears reasonable for a technology leader in a recovering cyclical industry.

Detailed Analysis: The Space Photovoltaics Opportunity

The Case for Perovskites in Space

Traditional space solar cells are predominantly based on Gallium Arsenide (GaAs) multi-junction technologies. While highly efficient (often >30%), they are characterized by:
1. High Cost: Complex epitaxial growth processes make them prohibitively expensive for large-scale constellation deployments.
2. Rigidity and Weight: They are typically mounted on rigid substrates, adding significant mass to launch payloads.
3. Supply Chain Constraints: Limited global production capacity for space-grade III-V materials.

Perovskite solar cells (PSCs) offer a compelling alternative:
* Ultra-Lightweight & Flexible: PSCs can be deposited on thin, flexible polymer substrates, enabling roll-to-roll manufacturing and conformal integration onto satellite surfaces. This reduces launch costs significantly, as mass is a primary driver of launch expenses.
* High Specific Power: The power-to-weight ratio of perovskites is superior to silicon and competitive with GaAs, making them ideal for power-constrained space missions.
* Radiation Hardness: Recent studies indicate that certain perovskite compositions exhibit surprising resilience to proton and electron radiation, a key requirement for space durability.
* Low-Cost Potential: Solution-processable manufacturing techniques promise a drastic reduction in production costs compared to vacuum-deposited III-V cells.

Shangyi Optoelectronics: A Strategic Partner

Shangyi Optoelectronics is identified in the report as a "scarce" domestic producer of satellite batteries. Its core competency lies in adapting perovskite technology for the harsh conditions of space. Key attributes include:
* Specialized Focus: Unlike generalist PV firms, Shangyi’s team has long focused exclusively on aerospace applications. This niche expertise includes understanding thermal cycling, vacuum outgassing, and atomic oxygen erosion—critical failure modes in Low Earth Orbit (LEO).
* Complementarity: Junda brings industrial scale, supply chain management, and capital. Shangyi brings application-specific know-how and potentially existing relationships with aerospace contractors and satellite manufacturers.
* Investment Structure: Junda’s intention to become a strategic shareholder aligns interests and ensures priority access to Shangyi’s technological breakthroughs. This equity link transforms the relationship from a vendor-client dynamic to a deep strategic alliance.

Market Implications

The global space economy is projected to grow substantially, driven by:
* Satellite Constellations: Projects like Starlink, Guowang (China), and others require thousands of satellites, each needing reliable, lightweight power sources.
* Deep Space Exploration: Future missions to the Moon and Mars will require high-efficiency, durable power systems that can operate in low-light or high-radiation environments.
* Space-Based Solar Power (SBSP): While longer-term, the concept of beaming solar energy from space to Earth relies heavily on advancements in lightweight, high-efficiency PV arrays.

By entering this field now, Junda positions itself as a first-mover in the next generation of space energy infrastructure. While revenue contributions from this segment may be negligible in the short term (2025-2026), the strategic value and potential for high-margin contracts in the late 2020s are significant.

Operational Review: Terrestrial Business Dynamics

While the space PV narrative captures imagination, Junda’s near-term financial performance is dictated by its terrestrial N-type cell business.

Industry Context: From "Involution" to Rationalization

The Chinese PV industry experienced severe overcapacity and price wars in 2023-2024, leading to widespread losses. However, recent policy interventions and market forces are driving a correction:
* Policy Support: Government guidelines aimed at preventing low-quality expansion and encouraging technological innovation are helping to clear inefficient capacity.
* Price Recovery: Module and cell prices have bottomed out and are showing signs of gradual recovery. For a specialized cell manufacturer like Junda, this stabilizes revenue per watt and improves gross margins.
* Technology Shift: The market is rapidly shifting from P-type PERC to N-type TOPCon and HJT cells. Junda, having exited the P-type market early and focused entirely on N-type, is well-positioned to capture the premium associated with higher-efficiency products.

Overseas Strategy: The Growth Engine

Junda’s overseas sales exceeding 50% is a testament to its successful globalization strategy.
* Market Diversification: By selling globally, Junda reduces exposure to domestic policy shifts and subsidy changes.
* Higher Margins: International customers, particularly in regions with less local manufacturing capacity, are often willing to pay a premium for high-quality, reliable N-type cells.
* Capacity Layout: The company’s plan to build overseas production capacity (mentioned in previous reports and implied in the current strategy) will further enhance its competitiveness. Localized production can mitigate trade barriers (such as tariffs in the US or EU) and reduce logistics costs.

Q3 2025 Financial Deep Dive

• Revenue Pressure: The expected revenue decline in 2025 (-19.9%) reflects the lower average selling prices (ASPs) prevalent in the first half of the year. However, the sequential improvement in Q3 suggests that volume growth is beginning to offset price declines.
• Cost Management: Despite revenue pressure, the company has managed to narrow its losses. This indicates effective cost control measures, including optimization of raw material procurement (silicon wafers, silver paste) and improvements in manufacturing yield.
• Cash Flow: Operating cash flow remains positive (CNY 42 million in 2025E, turning strongly positive in 2026E). This demonstrates the quality of earnings and the company’s ability to generate cash even during downturns, supported by strong working capital management.

Financial Forecast and Valuation

Revenue and Profit Projections

Source: Huaxin Securities Research Estimates

Analysis of Forecasts:
1. 2025: The Bottom: We view 2025 as the trough year. Revenue contraction is expected due to lower ASPs, but the narrowing loss (from -591M in 2024 to -532M in 2025E) confirms that the worst is behind us. The slight increase in operating expenses reflects continued R&D investment in perovskite and overseas expansion costs.
2. 2026: The Turnaround: The projected 39.9% revenue growth is driven by:
* Recovery in global PV demand.
* Full ramp-up of new N-type capacity.
* Higher ASPs as industry supply/demand balances.
* Contribution from initial overseas capacity.
* Gross margin expansion to 15.2% reflects the shift towards higher-value N-type and tandem products.
3. 2027: Accelerated Growth: Revenue grows another 19.9%, while net profit jumps 76.1%. This operating leverage effect occurs as fixed costs are spread over higher volumes, and high-margin products (like tandem cells) constitute a larger share of the mix. Net margin expands to 7.6%, approaching historical healthy levels for specialized cell makers.

Valuation Assessment

• Current Price: CNY 53.63
• Market Cap: CNY 15.7 Billion
• Forward P/E:
  • 2026E: 27.1x
  • 2027E: 15.4x
• P/B Ratio:
  • 2025E: 5.2x
  • 2026E: 4.0x
  • 2027E: 2.8x

Peer Comparison Context:
Leading PV technology companies typically trade at forward P/Es ranging from 15x to 25x during growth phases. Junda’s 2027E P/E of 15.4x is attractive, especially considering its higher projected earnings growth rate (76% YoY in 2027). The higher 2026E multiple (27.1x) reflects the "turnaround premium" investors often pay for companies transitioning from loss to profit.

The P/B ratio declining from 5.2x to 2.8x over the forecast period indicates that the market cap growth will be driven primarily by earnings accumulation rather than multiple expansion, suggesting a sustainable valuation trajectory.

Sum-of-the-Parts (SOTP) Consideration:
While our DCF and relative valuation are based on the core terrestrial business, the space PV partnership adds implicit option value. If the perovskite space technology achieves commercial success, it could command a significant premium, similar to how aerospace suppliers are valued higher than industrial manufacturers. This upside is not fully captured in the base case EPS forecasts.

Risks / Headwinds

Investors should carefully consider the following risks, which could impact Junda’s financial performance and stock price:

1. Technology and Cooperation Risks

• R&D Failure: Perovskite technology, while promising, faces challenges related to long-term stability and degradation. If Junda and Shangyi fail to solve stability issues for space applications, the commercialization timeline could be delayed indefinitely.
• Partnership Execution: The success of the collaboration depends on effective integration of R&D efforts and cultural alignment between Junda (industrial manufacturer) and Shangyi (specialized tech firm). Disagreements or execution delays could hinder progress.
• Competitive Tech Shifts: Rapid advancements in alternative technologies (e.g., improved III-V cost structures, organic PV, or other tandem architectures) could render perovskite less competitive.

2. Market and Demand Risks

• Downstream Demand Volatility: Global PV demand is sensitive to interest rates, government subsidies, and economic conditions. A slowdown in major markets (Europe, US, China) would hurt revenue volumes.
• Space Market Adoption: The space PV market is niche. Adoption rates by satellite operators may be slower than anticipated due to risk aversion regarding new, unproven technologies in critical space missions.

3. Trade and Geopolitical Risks

• Tariffs and Barriers: As Junda expands overseas, it faces potential trade barriers. The US, EU, and India have implemented or are considering tariffs and local content requirements for solar products. Non-compliance or adverse policy changes could restrict market access or erode margins.
• Geopolitical Tensions: Escalating tensions between China and Western nations could lead to stricter export controls or bans on Chinese PV technology, impacting Junda’s international sales.

4. Industry Competition

• Price Wars: Despite anti-involution policies, the PV industry remains highly competitive. If new capacity enters the market aggressively, prices could fall again, squeezing margins.
• Integrated Players: Large vertically integrated manufacturers (e.g., Longi, Jinko) may leverage their scale to undercut specialized cell makers like Junda, although Junda’s technology leadership provides some defense.

5. Financial and Operational Risks

• Raw Material Price Fluctuation: Prices of silicon wafers, silver, and other materials are volatile. Sharp increases in input costs without corresponding ability to pass them on to customers would hurt profitability.
• Exchange Rate Risk: With >50% of sales overseas, fluctuations in the CNY/USD or CNY/EUR exchange rates can significantly impact reported earnings.
• Capital Expenditure Burden: Scaling up new technologies and building overseas factories requires significant capital. If cash flow generation falls short, the company may need to raise debt or equity, potentially diluting shareholders or increasing financial leverage.

6. Systemic Market Risks

• A-Share Volatility: The Chinese stock market is subject to macroeconomic sentiment, regulatory changes, and liquidity flows. Broad market downturns could depress Junda’s stock price regardless of its fundamental performance.

Rating / Sector Outlook

Sector Outlook: Cautiously Optimistic with Structural Shifts

The global photovoltaic sector is undergoing a profound structural transformation.
1. Consolidation Phase: The era of rampant, low-quality expansion is ending. Policy support in China and market forces globally are driving out inefficient players. This consolidation is beneficial for remaining leaders like Junda, who possess technological moats and financial resilience.
2. Technology Supercycle: The shift from P-type to N-type, and eventually to Tandem (Perovskite/Silicon), is creating a differentiation opportunity. Companies that lead in efficiency gains will capture disproportionate market share and margins.
3. Globalization 2.0: The PV supply chain is becoming more regionalized. Successful companies will be those that can navigate complex trade landscapes by establishing local production footprints and diverse customer bases.
4. New Frontiers: Space PV and BIPV (Building-Integrated PV) represent high-growth niches that can provide diversification and higher valuation multiples.

Investment Rating: BUY (Maintained)

We reiterate our BUY rating on Junda Shares (002865.SZ).

Rationale:
* Valuation Appeal: The stock offers an attractive entry point given the projected earnings recovery in 2026-2027. The 2027E P/E of 15.4x is reasonable for a company with >70% earnings growth visibility.
* Technological Alpha: Junda’s leadership in N-type and perovskite tandem efficiency provides a durable competitive advantage. The 32.08% efficiency record is a strong signal of R&D prowess.
* Strategic Optionality: The partnership with Shangyi Optoelectronics opens a high-potential, low-correlation revenue stream in space PV. This differentiates Junda from pure-play terrestrial manufacturers and adds a "tech growth" dimension to its valuation.
* Operational Turnaround: The narrowing losses in Q3 2025 and strong overseas sales performance indicate that the company is successfully navigating the industry downturn. The balance sheet remains healthy, supporting future investments.

Target Price Implication:
While a specific target price is not explicitly recalculated in this event note, the maintenance of the BUY rating implies an expected return of >20% over the next 12 months, consistent with Huaxin Securities' rating definition. Based on the 2026E EPS of CNY 1.98 and a peer-average forward P/E of 25-30x for high-growth tech leaders, a fair value range of CNY 49.5 - CNY 59.4 is supported for the 2026 horizon, with further upside as 2027 earnings materialize.

Investment View

For Institutional Investors

Junda Shares represents a compelling "Growth at a Reasonable Price" (GARP) opportunity within the renewable energy sector. The investment case rests on the convergence of cyclical recovery and secular technological advancement.

1. Cyclical Play:
Investors seeking exposure to the PV cycle bottom should consider Junda. The company’s specialized focus allows it to react faster to market changes than integrated giants. As prices stabilize and demand recovers in 2026, Junda’s operating leverage will drive significant earnings elasticity. The narrowing losses in Q3 2025 are the first concrete evidence of this turnaround.

2. Technological Bet:
For investors focused on long-term energy trends, Junda’s R&D pipeline is a key asset. The perovskite-silicon tandem technology is widely regarded as the next big leap in PV efficiency. Junda’s early mover advantage in industrializing this technology (first offline unit in Nov 2025) positions it to capture the premium segment of the market as tandem cells become commercially viable in the late 2020s.

3. Diversification via Space PV:
The Shangyi partnership adds a unique diversification layer. Space infrastructure is a government-backed, high-growth sector with low correlation to terrestrial real estate or utility-scale PV cycles. This exposure enhances Junda’s strategic value and could attract a broader investor base, including those focused on aerospace and deep-tech themes.

4. Risk-Adjusted Return:
While risks exist (trade, tech, competition), they are largely priced in given the recent stock performance and current valuation multiples. The strong balance sheet (CNY 3.2B cash) provides a safety net against short-term volatility. The overseas revenue mix (>50%) mitigates domestic policy risk.

Strategic Recommendations

• Accumulate on Weakness: Given the volatility of the PV sector, investors may consider accumulating positions during market dips, targeting the CNY 45-50 range if available, to enhance margin of safety.
• Monitor Key Catalysts:
  • Q4 2025 / Q1 2026 Earnings: Look for confirmation of profit turnaround and further margin expansion.
  • Perovskite Milestones: Watch for announcements regarding the stability testing results of space-grade perovskite cells and any follow-on investments in Shangyi Optoelectronics.
  • Overseas Capacity Updates: Progress on the construction and ramp-up of overseas manufacturing facilities will be critical for sustaining long-term growth.
  • Policy Developments: Monitor global trade policies, particularly in the US and EU, for any changes that could impact Chinese PV exports.

Conclusion

Junda Shares is transitioning from a cyclical survivor to a technological leader with diversified growth avenues. The partnership with Shangyi Optoelectronics is a bold and strategic move that underscores management’s vision and commitment to innovation. Combined with a strengthening core business and improving financials, Junda is well-positioned to deliver superior returns in the coming years. We maintain our BUY rating, viewing the current valuation as an attractive entry point for long-term institutional capital seeking exposure to the next generation of solar technology and space infrastructure.

Appendix: Financial Statements Summary

Income Statement Highlights (CNY Million)

Balance Sheet Highlights (CNY Million)

Cash Flow Highlights (CNY Million)

Note: All financial data is sourced from Huaxin Securities Research estimates and Wind database. Past performance is not indicative of future results.

Analyst Certification and Disclosures

Analyst Certification:
The analysts named in this report, Zhang Han and Luo Dixiao, certify that they have the necessary securities investment consulting qualifications registered with the Securities Association of China. They declare that the views expressed in this report accurately reflect their personal, independent, and objective research opinions. They confirm that they have not received, nor will they receive, any direct or indirect compensation linked to the specific recommendations or views contained herein.

Important Disclosures:
* Conflict of Interest: Huaxin Securities Co., Ltd. and/or its affiliates may hold positions in the securities mentioned in this report and may engage in trading activities. They may also provide investment banking, financial advisory, or other financial services to the companies covered.
* No Guarantee: The information contained in this report is derived from public sources believed to be reliable. However, Huaxin Securities makes no representation or warranty, express or implied, regarding the accuracy or completeness of such information.
* Not Investment Advice: 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. It does not take into account the specific investment objectives, financial situation, or particular needs of any recipient. Investors should conduct their own independent assessment and consult with professional advisors before making any investment decisions.
* Copyright: This report is the exclusive property of Huaxin Securities. Unauthorized reproduction, distribution, or citation is strictly prohibited.

Rating Definitions (Huaxin Securities):
* Buy: Expected relative return > 20% vs. benchmark index over 12 months.
* Outperform: Expected relative return 10%—20%.
* Neutral: Expected relative return -10%—10%.
* Sell: Expected relative return < -10%.

Benchmark Indices: A-Shares: CSI 300; HK Stocks: Hang Seng Index; US Stocks: Dow Jones Industrial Average.

End of Report