Equity Research Initiation: Aiko Solar (600732.SH)

Date: December 29, 2025
Rating: Outperform (Initiation)
Current Price: CNY 13.77
Target Implied Valuation: 2026E P/E of 25.7x | 2027E P/E of 13.9x
Market Cap: CNY 29.16 Billion
Analyst: Shenglu Yin (S0790522080001)
Contact: Hang Zhou (S0790125050020)

Executive Summary

Initiating coverage on Aiko Solar (600732.SH) with an "Outperform" rating. After sixteen years of deep cultivation in the photovoltaic (PV) cell sector, Aiko Solar has successfully transitioned from a PERC-era benchmark to a global leader in Back Contact (BC) technology. The company was the first to launch ABC (All Back Contact) technology in 2021 and achieved GW-scale mass production of N-type BC cells earlier than any peer in the industry.

We believe Aiko Solar is uniquely positioned to capitalize on the structural shift in the PV industry away from homogeneous competition ("involution") toward high-efficiency, differentiated products. While the broader PV manufacturing sector grapples with severe overcapacity, particularly in the TOPCon segment, Aiko’s strategic focus on BC technology allows it to command significant price premiums, especially in high-value overseas distributed markets.

Our investment thesis rests on three pillars:
1. Technological Moat & Product Premium: Aiko’s ABC modules, featuring front-side grid-free design and superior aesthetics, meet the dual demands of power generation efficiency and visual appeal in distributed scenarios. This has enabled sustained pricing premiums over mainstream TOPCon products.
2. Cost Reduction & Scale Effects: As BC capacity expands and yields improve (currently >97%), production costs are entering a downward trajectory. The recent CNY 3.5 billion private placement strengthens the balance sheet, facilitating capacity expansion to meet surging demand.
3. Financial Turnaround: We forecast a sharp inflection in profitability. After a challenging 2024 marked by industry-wide margin compression, we project Net Profit Attributable to Shareholders to reach CNY 1.13 billion in 2026 and CNY 2.11 billion in 2027.

At the current price of CNY 13.77, the stock trades at an implied 2026E P/E of 25.7x and 2027E P/E of 13.9x. These multiples are attractive relative to peers such as LONGi Green Energy and JinkoSolar, considering Aiko’s higher growth trajectory in the premium BC segment. We initiate with an Outperform rating.

Key Takeaways

1. Strategic Pivot to BC Technology: From Follower to Leader

Aiko Solar has demonstrated remarkable agility in technological transitions. Historically a top-tier supplier in the P-type PERC era (ranking #2 globally in cell shipments in 2018), the company made a decisive bet on N-type Back Contact (BC) technology while most competitors converged on TOPCon.
* First-Mover Advantage: Aiko launched its proprietary ABC technology in 2021 and achieved GW-scale mass production of N-type BC cells ahead of the curve.
* Product Evolution: The company has iterated rapidly from its initial "Black Hole" series (23.5% module efficiency) to the third-generation "Full Screen" module, which achieves over 25% mass-production efficiency through precise stacking welding and hidden busbars.
* Market Position: Despite a temporary dip in external cell shipment rankings (to #5 in 2024/2025H1) due to the internal consumption of ABC cells for its own module brand, Aiko has solidified its status as a BC technology leader.

2. The "Anti-Involution" Premium: Capturing Value in Distributed Markets

The global PV industry is currently undergoing a painful consolidation phase characterized by oversupply and price wars, particularly in the standardized TOPCon segment. Aiko’s BC strategy offers a viable escape route from this commoditization trap.
* Aesthetic & Performance Dual-Drive: BC modules feature a full black, grid-free front side, significantly enhancing aesthetic appeal for residential and Building-Integrated Photovoltaics (BIPV) applications. Simultaneously, the elimination of front-side shading boosts light absorption and power density.
* Sustainable Pricing Power:
* Domestic Market: As of December 17, 2025, domestic BC module prices averaged CNY 0.76/W, representing a CNY 0.07/W premium over TOPCon modules.
* Overseas Market: The premium is even more pronounced in Europe, where BC modules for residential projects average USD 0.165/W and commercial/industrial projects average USD 0.115/W, compared to a TOPCon average of USD 0.086/W.
* High-Value Market Penetration: Aiko has established itself as a top-tier brand in Europe (leading market share in Switzerland, Czech Republic, UK) and Australia (winner of the 2025 Best Solar Module Award). This geographic mix skews towards regions with higher willingness to pay for premium products.

3. Financial Inflection Point: From Losses to High-Growth Profitability

The company is navigating through the trough of the industry cycle. Our financial model predicts a robust recovery driven by volume growth in high-margin ABC modules and cost optimizations.
* Revenue Trajectory: We forecast total revenue to rebound from CNY 11.16 billion in 2024 to CNY 15.91 billion in 2025 (+42.7%), CNY 26.46 billion in 2026 (+66.3%), and CNY 34.13 billion in 2027 (+29.0%).
* Profitability Recovery:
* 2024: The company reported a net loss of CNY 5.32 billion, reflecting industry-wide price collapses and asset impairments.
* 2025E: We expect a narrowed loss of CNY 540 million as ABC volumes scale and margins begin to repair.
* 2026E-2027E: We project a swing to profitability with Net Profit of CNY 1.13 billion in 2026 and CNY 2.11 billion in 2027.
* Margin Expansion: Gross margins are expected to recover from -9.9% in 2024 to 4.4% in 2025, 10.5% in 2026, and 12.0% in 2027, driven by the increasing mix of high-premium ABC modules and declining production costs.

4. Capital Structure Strengthened by Private Placement

In September 2025, Aiko completed a CNY 3.5 billion private placement. This capital injection serves two critical functions:
1. De-leveraging: It alleviates financial pressure and optimizes the debt structure, crucial for surviving the industry downturn.
2. Capacity Expansion: It provides the necessary funding to break through supply bottlenecks for ABC modules, allowing the company to capture unmet demand in high-value markets.

5. Valuation Appeal Relative to Peers

Comparing Aiko Solar to key industry peers—LONGi Green Energy (BC leader), JinkoSolar (TOPCon leader), and GCL Integration (transitioning to BC)—Aiko offers a compelling valuation profile given its growth prospects.
* 2026E P/E: Aiko at 25.7x vs. Peer Average of 45.9x.
* 2027E P/E: Aiko at 13.9x vs. Peer Average of 26.2x.

Source: Wind, Kaiyuan Securities Research Institute. Note: Peer forecasts are Wind consensus estimates; Aiko forecasts are Kaiyuan Securities estimates. Data as of Dec 26, 2025.

Company Overview: Sixteen Years of Technological Accumulation

1.1 Historical Evolution: From PERC Benchmark to BC Pioneer

Founded in 2009, Aiko Solar has spent sixteen years building deep technical barriers in the solar cell domain. Its journey can be categorized into two distinct eras:

The PERC Era (2016–2020): Establishing Scale and Efficiency
* Strategic Shift: In 2016, Aiko pivoted from multi-crystalline to single-crystalline technology, achieving an annual output of over 1GW. During this period, the company invented tubular PERC cell technology, laying the foundation for subsequent efficiency leaps.
* Mass Production Leadership: By 2017, Aiko became the first to mass-produce tubular PERC cells. In 2018, through the introduction of selective emitter technology, it pushed single-crystal PERC mass production efficiency above 22%, maintaining a leading position.
* Market Dominance: Leveraging product competitiveness, Aiko’s external cell shipments ranked second globally in 2018, becoming a key supplier for China’s third batch of "Top Runner" projects. It consistently remained in the top tier of cell shipment rankings through 2023.

The N-Type BC Era (2021–Present): Defining the Next Generation
* Technology Launch: In 2021, Aiko unveiled its proprietary ABC (All Back Contact) technology, featuring a front-side grid-free design with an average mass production efficiency of 25.5%.
* Product Iteration:
* 2022: Launched the "Black Hole" series ABC modules with 23.5% efficiency and max power of 720W.
* 2024: Introduced the third-generation "Full Screen" module. By eliminating inter-cell gaps and hiding busbars via precise stacking welding, the effective power generation area increased by 1.8%, pushing module efficiency beyond 25%.
* Resilient Growth: Amidst the industry downturn, ABC module shipments surged. In the first three quarters of 2025 alone, shipments reached 11.5–12 GW, already nearly doubling the full-year 2024 volume of 6.33 GW.

Note on Shipment Rankings: While Aiko’s ranking in external cell shipments dropped to fifth in 2024 and 2025H1, this is largely attributable to the strategic shift towards vertical integration. A significant portion of its high-efficiency ABC cells are now consumed internally for its own branded modules, rather than sold as standalone cells. This vertical integration captures more value chain margin and builds brand equity.

1.2 Business Architecture: Integrated "PV-Storage-Usage" Solutions

Aiko has evolved from a pure cell manufacturer into a comprehensive solution provider, structured around its core N-type ABC technology.

Core Product Portfolio:
1. High-Efficiency Solar Cells: The foundational business, now transitioning from PERC/TOPCon to N-type BC.
2. ABC Modules: Tailored for specific scenarios:
* "Star" Series: For utility-scale centralized plants.
* "Comet" Series: For Commercial & Industrial (C&I) rooftops.
* "Black Hole" Series: For residential households.
* "Nebula" Series: Lightweight modules for specialized applications.
3. Smart Energy Solutions: The "1+3+N" PV-Storage Smart Energy Service System. This integrates power electronics and digital technologies to provide one-stop services for green factories, smart stations, and zero-carbon parks, optimizing lifecycle generation benefits and electricity costs.

Supply Chain Integration:
To enhance cost control and quality stability, Aiko has strategically invested upstream:
* March 2022: Invested CNY 250 million for a 2.12% stake in Gaojing Solar (wafer supplier).
* December 2022: Acquired a 2.78% stake in Qinghai Lihao (polysilicon supplier) for CNY 385 million.
* April 2023: Subscribed CNY 350 million to a private equity fund investing in Asia Silicon.

These investments secure critical raw material supplies and mitigate volatility in input costs.

1.3 Ownership Structure: Stable Control and Management Confidence

The company’s ownership structure reflects strong alignment between management and shareholders, with no history of insider selling since listing.

• Listing & Initial Control: In 2019, actual controller Chen Gang and ten other shareholders acquired Shanghai Xinmei via a back-door listing. Chen Gang and his concerted parties initially held 41.22%.
• Performance Commitment Adjustment: In August 2022, due to missing the 2019-2021 performance commitment targets associated with the back-door listing, the company repurchased and cancelled 898 million shares from Chen Gang and others at CNY 1/share. This reduced their holding to 23.80%.
• Consolidation of Control:
  • In September 2022, Tianjin Tianchuang Haihe Advanced Equipment Manufacturing Industry Fund dissolved its concerted action agreement with Chen Gang, reducing the combined holding to 21.60%.
  • In December 2022, Chen Gang’s controlled entity, Zhuhai Hengqin Shun, fully subscribed to a CNY 1.65 billion private placement, raising the combined holding to 31.38%.
• Current Status (as of Sept 30, 2025):
  • Chen Gang directly holds 15.49%.
  • Chen Gang and concerted parties hold 26.99%.
  • Significance: The controlling shareholder has never reduced his holdings since listing, signaling strong confidence in the company’s long-term intrinsic value and the BC technology roadmap.

Industry Analysis: BC Technology Accelerating Penetration

2.1 The Case for BC: Premium Pricing in a Commoditized Market

The photovoltaic industry is currently bifurcated. Standardized technologies like TOPCon are engaged in fierce price competition, while differentiated technologies like BC (Back Contact) are carving out a premium niche.

Why BC Commands a Premium:
1. Aesthetics: The front-side grid-free, all-black design of BC modules is visually superior, making them the preferred choice for high-end residential and BIPV applications where appearance matters.
2. Power Density: In distributed scenarios (rooftops), space is often limited. BC modules offer higher front-side efficiency and power density, allowing for greater installed capacity per square meter.
3. Comprehensive Power in Utility Scale: Contrary to the belief that BC is only for rooftops, advancements in bifaciality have made BC competitive in utility-scale projects as well.

Performance Comparison: BC vs. TOPCon in Utility Scenarios
Using the simplified formula for comprehensive power: $P_{total} = P_{front} + (P_{front} \times Bifaciality \times Rear Irradiance Ratio)$, we compare Aiko’s "Star" Series 2N+66 ABC module against TOPCon counterparts across different ground reflectivities.

Source: White Paper on Back Contact Battery Technology, Kaiyuan Securities Research Institute.

Data Insight: Even in utility-scale scenarios with varying albedo, Aiko’s ABC modules deliver significantly higher comprehensive power output than both regular and upgraded TOPCon modules. This versatility expands the addressable market beyond just residential roofs.

Price Premium Evidence:
* Domestic (China): As of Dec 17, 2025, BC modules trade at CNY 0.76/W, a CNY 0.07/W premium over TOPCon.
* Europe:
* Residential BC: USD 0.165/W
* C&I BC: USD 0.115/W
* TOPCon Average: USD 0.086/W
* Implication: The premium in Europe is substantial (nearly double for residential), reflecting the high value placed on aesthetics and efficiency in these mature markets.

2.2 Cost Reduction Trajectory: Scaling and Technical Optimization

While BC modules command a premium, their widespread adoption depends on closing the cost gap with TOPCon. Aiko is driving costs down through three main levers: Equipment Investment, Yield Improvement, and Silver Consumption Reduction.

1. Equipment Investment Costs

According to CPIA data (2024):
* Cell Line Investment: XBC (approx. CNY 300 million/GW) is slightly lower than HJT (CNY 322 million/GW) but higher than TOPCon (CNY 142 million/GW).
* Module Line Investment: XBC (CNY 63 million/GW) is higher than HJT (CNY 54 million/GW) and TOPCon (CNY 49 million/GW).
* Outlook: As industry scale expands and equipment manufacturers optimize designs, unit investment costs for BC lines are expected to decline, improving the return on investment for new capacity.

2. Yield Rates: The Key Cost Driver

Yield rate is the most critical factor influencing BC cell costs. The manufacturing complexity arises from:
* Backside Patterning: Alternating P and N regions on the back require high-precision insulation to prevent leakage.
* Metallization Alignment: Backside electrodes must align precisely with diffusion zones.

Progress: Leading enterprises have made significant strides. Both Aiko’s ABC and LONGi’s HPBC 2.0 production lines have achieved yield rates exceeding 97%. This high yield level is crucial for bringing BC costs closer to parity with mature TOPCon lines.

3. Silver Paste Consumption: The Challenge and Solution

Silver paste is a major non-silicon cost component.
* The Problem: BC cells move all electrodes to the back. Carriers must travel across the entire wafer to reach these rear electrodes, increasing internal resistance. To mitigate this, thicker silver grid lines are traditionally required, leading to higher silver consumption.
* Consumption Comparison (2024 CPIA Data):
* TOPCon: ~86 mg/wafer (double-sided).
* HJT: ~75 mg/wafer (using silver-copper paste).
* XBC: ~135 mg/wafer.
* Aiko’s Solution: Copper Plating (Silver-Free Metallization):
Aiko employs electrochemical and chemical methods to plate copper/nickel/tin, replacing silver with pure copper for electrodes.
* Benefits:
1. Cost: Copper is abundant and cheap compared to silver.
2. Performance: Seamless bonding of copper grids to silicon wafers prevents burn-through and damage, enhancing cell toughness.
3. Scalability: Removes the bottleneck of silver supply constraints.
* Status: Aiko has achieved mass production of silver-free metallization, providing a long-term cost advantage and sustainability benefit.

2.3 Market Share Trends: The Rise of XBC

Since 2023, N-type TOPCon has become the mainstream technology. However, XBC (including ABC and HPBC) is gaining momentum due to its efficiency ceiling and compatibility.

• Capacity Growth: By the end of 2025, global XBC capacity is estimated to exceed 80 GW, accounting for over 6% of total cell capacity.
• Future Projection: Infollink predicts that within the next three years, XBC capacity share will rise to over 10%.
• Industry Shift: In the face of severe overcapacity, major manufacturers have largely paused new TOPCon capacity plans in China. New investments are increasingly focused on BC technology.
  • Leaders: LONGi and Aiko continue to lead.
  • Followers: Second and third-tier firms are expanding XBC capacity via self-investment, joint ventures, or retrofitting. Most top-tier players now have at least one XBC pilot line, accelerating R&D and mass production conversion.

This structural shift suggests that BC is not just a niche product but the next major mainstream technology platform, with Aiko well-positioned as a primary beneficiary.

Competitive Advantages: Brand as Spear, R&D as Shield

3.1 Technological Moat: Four Pillars of ABC Superiority

Aiko’s ABC technology is not a single innovation but a suite of integrated advancements that collectively drive efficiency and reliability.

1. Front-Side Grid-Free & Full Back Passivation
* Mechanism: All positive and negative electrodes are integrated on the back using cross-electrode technology.
* Benefit: Eliminates the 3-5% shading loss from front metal grids. Maximizes light absorption area.
* Optical Gain: Without front-side high-temperature steps that damage pyramid textures, the front surface anti-reflection effect is enhanced, reducing reflection to just 1.5%.
* Electrical Gain: Absence of front doping layers solves photon parasitic absorption, improving photon utilization efficiency.

2. Silver-Free Metallization (Copper Plating)
* Mechanism: Uses horizontal electroplating equipment to deposit copper/nickel/tin layers.
* Benefit: Replaces expensive silver with cheap copper. The process ensures zero burn-through and zero damage to the silicon wafer, improving mechanical strength.
* Strategic Value: Secures supply chain independence from volatile silver prices and scarce resources.

3. "Full Screen" Module Technology
* Mechanism: Utilizes precise stacking welding to eliminate inter-cell gaps and hides busbars.
* Benefit: Maximizes the effective power generation area by covering the module surface completely with cells.
* Aesthetic & Functional: Enhances visual uniformity (critical for premium markets) and boosts module efficiency to >25%.

4. 0BB (Zero Busbar) Welding
* Mechanism: Replaces traditional main busbar welding with dense fine-grid direct ribbon connection.
* Benefit:
* Reduces lateral current transmission distance.
* Lowers series resistance (Rs) by over 20%.
* Improves conversion efficiency and enhances bifaciality.
* Status: Aiko has mastered 0BB mass production, further widening the efficiency gap over conventional technologies.

Result: Aiko’s second-generation N-type ABC modules deliver a mass production efficiency of 24.8%, ranking #1 globally in commercial module efficiency (TaiyangNews, Dec 2025). The third-generation "Full Screen" module, launched in Europe in March 2025, pushes this boundary further.

3.2 Global Brand Building: Deep Localization

Aiko has executed a "Globalization + Localization" strategy, establishing regional operating systems in seven major regions. Except for North America, local hiring rates in regional headquarters exceed 70%. This ensures rapid response to customer needs and cultural alignment.

Brand Recognition & Awards:
* Europe: Aiko has achieved leading market share in Switzerland, Czech Republic, and the UK, with rapid growth in Germany and the Netherlands.
* Australia: Ranked among the most popular brands by professional installers; won the 2025 Australia Best Solar Module Award.
* Certifications: In the 2025 EUPD Research brand survey, Aiko received "Top PV Brand" certification in five European countries: Germany, Switzerland, UK, Spain, and Italy. This validates its premium positioning.

Channel Penetration:
* Overseas: Partnerships with mainstream distributors are established in over 50 countries. Strong presence in Northern European distributed markets.
* Domestic: Strategic cooperation with leading channel partners in the distributed sector. Gaining traction in C&I projects due to reliability features (anti-cracking, high-temperature suppression).

Financial Analysis & Forecasts

4.1 Key Assumptions

Our financial model is built on the following core assumptions regarding volume, price, and cost trends:

1. ABC Module Sales (Core Growth Engine)
* Volume: We project ABC module shipments to grow aggressively as capacity ramps up and demand solidifies.
* 2025E: 16 GW (Domestic: 10.4 GW, Overseas: 5.6 GW)
* 2026E: 28 GW (Domestic: 14.0 GW, Overseas: 14.0 GW)
* 2027E: 35 GW (Domestic: 15.75 GW, Overseas: 19.25 GW)
* Trend: Overseas share increases from 35% in 2025 to 55% in 2027, reflecting successful brand penetration in high-margin markets.
* Price: Assuming industry "anti-involution" efforts stabilize prices and premium demand persists.
* Domestic Avg Price (Tax Incl.): CNY 0.74/W (2025) -> 0.80/W (2026) -> 0.85/W (2027).
* Overseas Avg Price: CNY 0.97/W (2025) -> 1.00/W (2026) -> 1.02/W (2027).
* Revenue: Expected to grow from CNY 12.24 billion (2025) to CNY 31.48 billion (2027).
* Gross Margin: Recovering from low levels to 4.6% (2025), 11.0% (2026), and 12.2% (2027) as scale effects and cost reductions kick in.

2. Cell Sales & OEM (Declining Legacy Business)
* Volume: As focus shifts to proprietary ABC modules, external cell sales (mostly legacy PERC/TOPCon) will shrink.
* 2025E: 16 GW
* 2026E: 10 GW
* 2027E: 10 GW
* Price: Modest recovery expected due to industry consolidation.
* Avg Price (Excl. Tax): CNY 0.22/W (2025) -> 0.24/W (2026) -> 0.25/W (2027).
* Revenue: Declining from CNY 3.52 billion (2025) to CNY 2.50 billion (2027).
* Gross Margin: Improving from 2.3% (2025) to 8.0% (2027) as low-margin legacy capacity is optimized or retired.

3. Other Businesses
* Stable revenue contribution of ~CNY 1.5 billion annually with consistent gross margins around 33%.

4.2 Profit & Loss Forecast

Analysis of Forecast:
* 2024 Bottoming Out: The massive loss in 2024 was driven by asset impairments (CNY 2.99 billion) and negative gross margins (-9.9%) due to plummeting PV prices.
* 2025 Transition: Revenue grows 42.7%, but the company remains slightly loss-making (-CNY 540 million) as it absorbs fixed costs of new capacity and continues to clear legacy inventory. However, gross margin turns positive (4.4%).
* 2026-2027 Profit Surge: With ABC modules becoming the dominant revenue source (high margin) and legacy cell business shrinking, operating leverage kicks in. Net margins expand to 4.3% in 2026 and 6.2% in 2027. ROE improves from -108.9% in 2024 to 19.2% in 2027.

4.3 Balance Sheet & Cash Flow Health

Capital Structure Post-Private Placement:
The CNY 3.5 billion private placement in Sept 2025 has significantly strengthened the balance sheet.
* Cash Position: Cash and equivalents are projected to rise from CNY 1.91 billion (2024) to CNY 3.06 billion (2025) and CNY 5.01 billion (2026).
* Debt Management: Long-term borrowings are scheduled to decrease from CNY 7.03 billion (2024) to CNY 4.01 billion (2026) and CNY 1.53 billion (2027), indicating a deliberate de-leveraging strategy.
* Asset-Liability Ratio: Expected to improve from 85.7% (2024) to 77.3% (2025) and 70.0% (2027).

Cash Flow Outlook:
* Operating Cash Flow (OCF): After a negative OCF of -CNY 4.52 billion in 2024, we forecast a return to positive territory in 2026 (CNY 6.46 billion) and 2027 (CNY 3.01 billion) as working capital management improves and profitability returns.
* Investing Cash Flow: Continued capex for BC capacity expansion will keep investing outflows significant in 2025-2026, tapering off in 2027 as major capacity builds complete.

Valuation & Investment Rating

5.1 Relative Valuation

We employ a relative valuation method using the Price-to-Earnings (P/E) ratio, comparing Aiko Solar against its closest peers in the PV module and technology space.

Peer Selection Logic:
1. LONGi Green Energy (601012.SH): The other global leader in BC technology (HPBC). Direct competitor in the premium segment.
2. JinkoSolar (688223.SH): The global leader in TOPCon modules. Represents the mainstream benchmark.
3. GCL Integration (002506.SZ): A module integrator actively transitioning into BC technology. Represents the emerging challenger segment.

Valuation Comparison:

Interpretation:
* Aiko Solar trades at a significant discount to the peer average on both 2026E (25.7x vs 45.9x) and 2027E (13.9x vs 26.2x) bases.
* Given that Aiko’s projected net profit growth rate (310% in 2026, 85.5% in 2027) exceeds or matches that of its peers, and its exposure to the high-growth BC segment is purer than LONGi’s or Jinko’s, this discount appears unjustified.
* The market may be underpricing the sustainability of Aiko’s BC premium and the speed of its cost reduction. As BC becomes more mainstream, Aiko’s earnings visibility should improve, leading to multiple expansion.

5.2 Investment Rating: Outperform (Initiation)

We initiate coverage of Aiko Solar (600732.SH) with an Outperform rating.

Rationale:
1. Structural Alpha: Aiko is not just participating in the PV cycle; it is defining the next technological standard (BC). The shift from TOPCon to BC is inevitable for premium segments, and Aiko is the purest play on this transition.
2. Earnings Elasticity: The company is emerging from a deep loss-making trough. The leverage effect of operating income turning positive will result in explosive earnings growth in 2026-2027.
3. Valuation Safety Margin: Trading at ~14x forward P/E for a company with >80% earnings growth is attractive. The downside risk is limited by the tangible asset base and the strategic value of its BC IP.
4. Catalysts:
* Continued expansion of BC market share globally.
* Further cost reductions via copper plating scaling.
* Potential industry-wide price stabilization benefiting all players, but disproportionately helping premium players like Aiko.

Risks / Headwinds

Investors should be aware of the following risks that could impact our thesis and financial projections:

1. Policy Support Uncertainty

The PV industry is heavily influenced by government policies (subsidies, tariffs, carbon neutrality targets).
* Risk: If major markets (EU, US, China) reduce support or impose stricter trade barriers (e.g., higher tariffs on Chinese PV products), demand could soften, impacting Aiko’s overseas revenue which is critical for its premium pricing model.

2. Slower-than-Expected Industry Capacity Clearing

The PV sector is in a deep adjustment phase.
* Risk: If inefficient TOPCon and PERC capacity exits the market slower than anticipated, supply glut will persist. This could prolong price wars, forcing Aiko to lower its BC premiums to maintain volume, thereby compressing margins and delaying profitability recovery.

3. Technology Expansion & Yield Risks

BC technology is complex.
* Risk: If Aiko encounters unforeseen technical hurdles in scaling up ABC production (e.g., yield rates stagnating below 97%, or issues with copper plating reliability), unit costs may remain high. Additionally, if competing BC technologies (like LONGi’s HPBC) gain faster traction or if a new disruptive technology emerges, Aiko’s first-mover advantage could erode.

4. Model Assumption Subjectivity

Our forecasts rely on specific assumptions regarding PV module prices and cost curves.
* Risk: The assumption that "anti-involution" efforts will lead to price recovery is subjective. If market competition intensifies further, prices could remain depressed longer than modeled, leading to lower revenues and margins than projected. The sensitivity of profits to small changes in ASP (Average Selling Price) is high given the operating leverage.

5. Geopolitical & Trade Risks

Aiko relies significantly on overseas markets (Europe, Australia) for its high-margin sales.
* Risk: Escalating geopolitical tensions or protectionist trade policies (e.g., EU carbon border adjustments, anti-subsidy investigations) could restrict market access or increase compliance costs, impacting the profitability of its export business.

Investment View & Conclusion

Aiko Solar represents a compelling contrarian opportunity in the photovoltaic sector. While the broader industry is mired in a narrative of overcapacity and margin compression, Aiko is executing a successful differentiation strategy through its leadership in BC technology.

The Bull Case:
* Technology Leadership: Aiko is not merely following trends; it is setting them. Its ABC technology offers tangible benefits (efficiency, aesthetics) that command a durable premium.
* Financial Turnaround: The company is poised for a dramatic earnings recovery. The transition from a CNY 5.3 billion loss in 2024 to a projected CNY 2.1 billion profit in 2027 demonstrates significant operational leverage and business model resilience.
* Valuation Disconnect: The market currently values Aiko at a discount to peers despite its superior growth profile in the high-value BC segment. As the BC market share expands from 6% to >10%+, this disconnect should close.

Strategic Recommendation:
For institutional investors seeking exposure to the next generation of PV technology with a favorable risk-reward profile, Aiko Solar offers an attractive entry point. The combination of a strengthened balance sheet (post-private placement), expanding high-margin order book, and technological moat provides a solid foundation for long-term value creation.

We recommend accumulating positions on dips, with a medium-to-long-term horizon targeting the 2026-2027 earnings realization phase. The key monitorables going forward will be quarterly ABC shipment volumes, overseas gross margin trends, and the pace of industry capacity exit.

Appendix: Detailed Financial Statements

A. Balance Sheet Forecast (CNY Million)

B. Income Statement Forecast (CNY Million)

C. Cash Flow Statement Forecast (CNY Million)

D. Key Financial Ratios

Disclaimer & Legal Information

Important Notice:
This report is prepared by Kaiyuan Securities Research Institute for institutional investors and professional clients. It is based on information believed to be reliable, but Kaiyuan Securities does not guarantee its accuracy or completeness. The opinions, estimates, and projections contained herein reflect the judgment of the analysts as of the date of publication and are subject to change without notice.

Investment Rating Definitions:
* Outperform: Expected to outperform the market benchmark by 5%-20% over the next 6-12 months.
* Buy: Expected to outperform the market benchmark by >20%.
* Neutral: Expected to perform in line with the market benchmark (-5% to +5%).
* Underperform: Expected to underperform the market benchmark by >5%.

Risk Disclosure:
Investors should carefully consider the risks outlined in this report, including policy changes, industry competition, and technological execution risks. Past performance is not indicative of future results. This report does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investors should make their own independent decisions and consult with financial advisors if necessary.

Copyright:
© 2025 Kaiyuan Securities Co., Ltd. All rights reserved. No part of this report may be reproduced or distributed without prior written consent.

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