Tongwei Co., Ltd. (600438.SH): Navigating the Trough – Technological Leadership and Market Share Expansion Amidst Industry Consolidation

Date: August 26, 2025
Rating: BUY (Maintained)
Current Price: CNY 21.32
Target Price: Implied Upside based on 2026/2027 Recovery Trajectory
Analysts: Zeng Duohong, Guo Yanan, Xu Chengrong (Soochow Securities Institute)

Executive Summary

Tongwei Co., Ltd. (600438.SH), the global leader in high-purity crystalline silicon and a rapidly expanding force in solar cells and modules, reported its interim results for the first half of 2025 (1H25). The report reflects a company operating in a highly challenging macro-environment characterized by intense industry competition, oversupply, and depressed pricing across the photovoltaic (PV) value chain. Despite these headwinds, Tongwei has demonstrated remarkable resilience through operational efficiency, technological superiority, and strategic market expansion.

Key Financial Highlights for 1H25:
* Revenue: CNY 40.51 billion, representing a year-over-year (YoY) decline of 7.5%.
* Net Profit Attributable to Shareholders: A loss of CNY 4.96 billion, a YoY deterioration of 58.3% compared to the prior period’s baseline, reflecting the severe margin compression in the sector.
* Gross Margin: Compressed to 0.1% in 1H25 (down 7 percentage points YoY). However, a sequential improvement was observed in Q2, with gross margin reaching 2% (up 4.9 percentage points quarter-over-quarter).
* Cash Position: The company maintains a robust liquidity buffer, with cash and transactional financial assets totaling approximately CNY 33.23 billion as of the end of Q2 2025, ensuring operational stability amidst negative operating cash flows.

Strategic Developments & Operational Metrics:
* Polysilicon Dominance: Tongwei retained its position as the global number one polysilicon supplier with a market share of approximately 30%. Sales volume reached ~161,300 metric tons in 1H25. Crucially, the company’s N-type silicon product mix exceeded 90%, with industry-leading technical indicators including silicon consumption below 1.04 kg/kg-Si and near-zero steam consumption.
* Cell & Module Growth: Solar cell shipments remained globally dominant at 49.89 GW in 1H25. Module sales surged to 24.52 GW, with overseas shipments experiencing explosive growth to 5.08 GW. The company has secured leading positions in key European markets such as Poland, Romania, and Hungary.
* Industry Turning Point: Since July 2025, initial signs of "anti-involution" (rationalization of competitive practices) have emerged. Polysilicon prices have rebounded from lows of ~CNY 30,000/ton to approximately CNY 50,000/ton, signaling a potential inflection point in industry profitability.

Investment Thesis:
We maintain our BUY rating on Tongwei shares. While we have adjusted our earnings forecasts for 2025-2027 to reflect the prolonged duration of the industry downturn and the associated pressure on margins, we believe Tongwei is best positioned to survive the consolidation phase and emerge stronger. The company’s cost leadership, superior N-type technology, and diversified global channel network provide a defensive moat. As industry supply clears and prices stabilize, Tongwei’s earnings elasticity is expected to be significant, with a projected return to profitability in 2026 and robust growth in 2027.

Key Takeaways

1. Financial Performance Analysis: Deep Trough with Sequential Stabilization

The 1H25 financial results underscore the severity of the current PV cycle downturn. However, a granular analysis of the quarterly data reveals signs of stabilization and operational resilience.

1.1 Revenue and Profitability Trends

In 1H25, Tongwei recorded total operating revenue of CNY 40.51 billion, a 7.5% YoY decline. This contraction is primarily attributable to the substantial drop in average selling prices (ASPs) for polysilicon and solar cells, which outweighed the growth in shipment volumes. The net profit attributable to shareholders stood at a loss of CNY 4.96 billion. The gross margin collapsed to 0.1%, down 7 percentage points YoY, indicating that selling prices for certain products fell below full cash costs for some competitors, though Tongwei’s integrated model helped mitigate the deepest losses.

Quarterly Breakdown (Q2 2025 vs. Q1 2025):
* Revenue: Q2 revenue was CNY 24.58 billion, representing a 1.4% YoY increase and a significant 54.2% quarter-over-quarter (QoQ) increase. This sequential jump reflects higher shipment volumes during the peak installation season (May-June rush).
* Profitability: Q2 net loss was CNY 2.36 billion. While still negative, the loss narrowed sequentially. The gross margin improved to 2% in Q2, up 4.9 percentage points from Q1. This improvement was driven by:
1. Higher operating rates leveraging fixed cost absorption.
2. A slight recovery in cell prices during the May-June installation rush.
3. Strict cost control measures.
* Net Margin: The net margin attributable to shareholders was -9.6% in Q2, an improvement of 6.7 percentage points QoQ.

*Note: The YoY comparison for profit is based on the reported deterioration rate. The absolute base figure for 1H24 is implied by the growth rate.

1.2 Expense Management and Cash Flow

Despite the revenue contraction, Tongwei has effectively managed its operating expenses, demonstrating disciplined cost control.
* Operating Expenses: Total period expenses in 1H25 were CNY 4.22 billion, a 10.9% YoY decrease. The expense ratio improved to 10.4%, down 0.4 percentage points YoY.
* Q2 Expense Control: In Q2 alone, operating expenses fell to CNY 2.08 billion, down 18.2% YoY and 2.9% QoQ. The expense ratio dropped to 8.5%, a significant improvement of 5 percentage points QoQ. This indicates that management is actively trimming discretionary spending and optimizing operational efficiency in response to the downturn.
* Cash Flow: Operating cash flow was negative CNY 1.95 billion in 1H25 (a 302.9% YoY decline), and negative CNY 490 million in Q2. The negative cash flow is primarily due to working capital adjustments and the timing of payments/receivables in a low-margin environment. However, the sequential improvement in Q2 (cash outflow reduced by 66.1% QoQ) aligns with the revenue pickup.
* Capital Expenditure (CapEx): Tongwei has significantly slowed its expansion pace to preserve cash. CapEx in 1H25 was CNY 4.48 billion, down 69.4% YoY. Q2 CapEx was CNY 2.03 billion, down 72.1% YoY. This prudent approach to investment helps protect the balance sheet during the cyclical trough.

1.3 Balance Sheet Strength and Liquidity

A critical differentiator for Tongwei in this cycle is its strong balance sheet.
* Cash Reserves: As of the end of Q2 2025, the company held cash and transactional financial assets totaling CNY 33.23 billion. This substantial liquidity buffer provides a vital safety net, allowing Tongwei to withstand prolonged periods of negative cash flow and potentially acquire distressed assets or invest in next-generation technology when competitors are constrained.
* Inventory: Inventory levels stood at CNY 13.7 billion at the end of 1H25, an 8.5% increase from the beginning of the year. Given the rapid price declines in H1, inventory management remains a key focus, but the level is manageable relative to the company’s scale.
* Debt Profile: The asset-liability ratio stands at 71.93%. While elevated, it is sustainable given the strong cash position and the expectation of future cash flow generation as the cycle turns.

2. Business Segment Analysis: Technology Leadership and Market Expansion

2.1 Polysilicon Segment: Unrivaled Scale and Technical Superiority

Tongwei’s polysilicon business remains the cornerstone of its competitive advantage. In an industry where cost and quality are paramount, Tongwei continues to set the benchmark.

Volume and Market Share:
* 1H25 Sales: Approximately 161,300 metric tons.
* Global Market Share: ~30%, maintaining the number one position globally.
* Q2 Estimate: We estimate Q2 sales volume at 80,000–90,000 tons (equity volume ~60,000–70,000 tons). This high utilization rate demonstrates the company’s ability to move volume even in a depressed market, leveraging its long-term contracts and customer relationships.

Pricing and Profitability Dynamics:
* Q1/Q2 Pressure: In Q1 and Q2, polysilicon prices continued to slide, hitting lows around CNY 30,000/ton. At these levels, most producers operate at a cash loss. Our calculations indicate that Tongwei’s per-ton loss expanded in Q2 due to the lag between price drops and cost adjustments, although its loss per ton remains significantly lower than industry peers due to its cost structure.
* Q3 Recovery Signal: A pivotal development occurred in July 2025. Driven by industry-wide efforts to curb "involution" (destructive price wars) and production cuts by high-cost producers, polysilicon quotes rebounded sharply from ~CNY 30,000/ton to ~CNY 50,000/ton. This 66% price increase, while still below historical averages, marks a crucial step towards restoring industry health. For Tongwei, this price recovery directly translates to margin improvement in H2 2025 and beyond.

Technological Moat:
Tongwei’s leadership is not just about scale; it is deeply rooted in technological excellence, particularly in N-type silicon required for high-efficiency TOPCon and HJT cells.
* N-Type Mix: Over 90% of Tongwei’s silicon shipments in 1H25 were N-type. This is significantly higher than the industry average, positioning the company to capture the premium associated with high-quality material.
* Silicon Consumption: Reduced to <1.04 kg/kg-Si. This metric is a key driver of cost efficiency. Lower silicon consumption means less raw material input per unit of output, directly boosting margins.
* Energy Efficiency: Steam consumption has been effectively reduced to near zero. This is a major breakthrough in reducing utility costs, which are a significant component of polysilicon production expenses.
* Purity Levels:
* Bulk Metal Content: <0.1 ppbw (parts per billion by weight).
* Surface Metal Content: <0.2 ppbw.
These purity levels are industry-leading and essential for producing high-efficiency cells with minimal degradation. Competitors struggle to match these specifications consistently at scale, giving Tongwei a distinct quality premium and customer stickiness.

2.2 Solar Cell Segment: Global Dominance and Margin Repair

Tongwei is the world’s largest solar cell manufacturer. The cell segment has historically been a profit center, but it too faced margin pressure in 1H25 due to oversupply.

Shipment Volume:
* 1H25 Sales: 49.89 GW, retaining the global number one ranking.
* Q2 Estimate: Approximately 30+ GW. The high Q2 volume reflects strong demand from module makers preparing for the mid-year installation rush.

Profitability Trend:
* Loss Narrowing: In Q1, cell margins were under severe pressure. However, in April and May, a "rush to install" drove a temporary spike in demand, leading to a price increase. Coupled with higher operating rates (spreading fixed costs), the per-watt loss in the cell segment narrowed significantly in Q2.
* Technology Transition: Tongwei is aggressively shifting its capacity towards N-type TOPCon cells, which command higher efficiency and better market acceptance. The company’s ability to ramp up N-type cell production efficiently supports its volume leadership.

2.3 Module Segment: Explosive Overseas Growth and Channel Breakthroughs

The module business represents Tongwei’s most significant strategic pivot in recent years. Moving downstream allows the company to capture more value and diversify its revenue base. The results in 1H25 validate this strategy.

Shipment Volume:
* 1H25 Sales: 24.52 GW.
* Q2 Estimate: 14–15 GW. The sequential acceleration in Q2 highlights the growing traction of Tongwei’s module sales channels.

Market Structure and Geographic Diversification:
* Domestic Distributed PV: Tongwei maintains the number one position in China’s distributed PV market. This segment is resilient due to favorable policy support for rooftop solar and commercial/industrial applications.
* Domestic Centralized PV: The company continues to strengthen its cooperation with central state-owned enterprises (SOEs). These long-term framework agreements provide a stable baseline for large-scale project deliveries.
* Overseas Markets (The Growth Engine):
* Volume: Overseas shipments reached 5.08 GW in 1H25, representing explosive growth. This indicates that Tongwei is successfully breaking into international markets previously dominated by established players like JinkoSolar, JA Solar, and Longi.
* Key Markets: Tongwei has achieved a leading position in several Eastern and Central European countries, including Poland, Romania, and Hungary. These markets are attractive due to their high energy prices, EU subsidies, and growing demand for energy independence.
* Strategic Implication: Success in Europe validates Tongwei’s brand and product quality. It also diversifies revenue away from the hyper-competitive Chinese domestic market, potentially offering better margins in the medium term as the company scales its international distribution network.

Module Profitability:
Similar to the cell segment, module per-watt losses narrowed in Q2. The combination of lower polysilicon/cell input costs (internal transfer pricing advantages) and slightly higher module ASPs in specific overseas niches helped improve the contribution margin.

3. Industry Context: The "Anti-Involution" Narrative

The Chinese PV industry has been plagued by "involution" – a term describing intense, often irrational, competition that drives prices below cost, eroding profits for all participants. However, 1H25 and early Q3 2025 have shown signs of a structural shift.

Supply Side Rationalization:
* Production Cuts: High-cost producers, particularly those with older P-type capacity or higher energy costs, have been forced to cut production or shut down lines due to sustained cash losses. This natural selection process is reducing effective supply.
* Policy Guidance: Industry associations and government bodies have increasingly emphasized high-quality development over blind expansion. There is tighter scrutiny on new capacity approvals, preventing further exacerbation of oversupply.

Price Recovery:
* Polysilicon: As noted, the rebound from CNY 30k/ton to CNY 50k/ton in July is a clear signal. While CNY 50k/ton may still be near the cash cost for some, it is a significant improvement from the sub-CNY 40k/ton levels seen earlier in the year.
* Cells and Modules: Prices have stabilized, with minor upticks in premium N-type products. The gap between P-type and N-type pricing remains, rewarding technologically advanced manufacturers like Tongwei.

Implication for Tongwei:
Tongwei, as the lowest-cost producer, benefits disproportionately from this rationalization. When prices are at rock bottom, Tongwei loses less (or breaks even) while competitors bleed cash. As prices recover, Tongwei’s margins expand faster due to its operational leverage. The "anti-involution" trend effectively extends Tongwei’s moat.

Risks / Headwinds

While the outlook is improving, investors must remain cognizant of the significant risks inherent in the PV sector and Tongwei’s specific situation.

1. Policy and Regulatory Risks

• Domestic Policy Uncertainty: Changes in China’s subsidy policies, grid connection rules, or land use regulations for PV projects could dampen domestic demand. While the long-term trend towards renewable energy is secure, short-term policy fluctuations can impact installation rhythms.
• International Trade Barriers: Tongwei’s growing overseas presence exposes it to trade risks. The EU’s Carbon Border Adjustment Mechanism (CBAM), potential anti-subsidy investigations, or tariffs imposed by the US (via indirect channels) could hinder export growth. Specifically, any tightening of trade relations with Europe could impact the high-growth markets of Poland, Romania, and Hungary.

2. Intensified Competition

• Price Wars: Despite signs of rationalization, the risk of renewed price wars remains. If demand growth slows unexpectedly, or if new capacity comes online faster than anticipated, prices could fall back to unsustainable levels.
• Technological Disruption: The PV industry is technologically dynamic. While Tongwei leads in N-type TOPCon, the emergence of alternative technologies such as Heterojunction (HJT) or Perovskite tandem cells could disrupt the current hierarchy. Failure to keep pace with R&D in these next-gen technologies could erode Tongwei’s premium.

3. Financial and Operational Risks

• Inventory Valuation Losses: With CNY 13.7 billion in inventory, any further sharp decline in polysilicon or module prices would require significant inventory write-downs, impacting profitability.
• Cash Flow Pressure: Although the cash reserve is strong, sustained negative operating cash flow over multiple quarters could strain liquidity, especially if debt maturities coincide with a prolonged downturn.
• Asset Impairment: The rapid technological transition from P-type to N-type renders older P-type assets obsolete. Tongwei may need to accelerate depreciation or write off older capacity, leading to non-cash charges that impact net income.

4. Macro-Economic Factors

• Interest Rates: High global interest rates can increase the cost of financing for PV projects, reducing the internal rate of return (IRR) for developers and potentially slowing down project commencements.
• Currency Fluctuations: As Tongwei expands overseas, exposure to foreign exchange fluctuations (EUR, USD, etc.) against the CNY could impact reported earnings.

Rating / Sector Outlook

Sector Outlook: From Clearing to Recovery

We view the global PV sector as transitioning from a phase of "violent clearing" to "initial stabilization."

1. Supply-Demand Rebalancing: The worst of the oversupply is likely behind us. The exit of high-cost capacity and the slowdown in new investments are helping to rebalance the market. We expect the supply-demand gap to narrow significantly in H2 2025 and 2026.
2. Profitability Restoration: Industry-wide profitability is expected to bottom out in 2025. Leading companies with cost advantages and technological edges (like Tongwei) will return to profitability sooner, while laggards may face bankruptcy or consolidation.
3. Demand Resilience: Global demand for solar energy remains robust, driven by energy security concerns, climate goals, and the declining levelized cost of electricity (LCOE) of solar. We anticipate double-digit growth in global installations in 2026 and 2027.

Company Rating: BUY (Maintained)

We maintain our BUY rating on Tongwei Co., Ltd.

Rationale for Rating:
1. Valuation Appeal: At a current price of CNY 21.32, the stock trades at a P/B of ~2.29x. While the P/E is negative due to current losses, the forward-looking valuation based on 2026/2027 earnings power is attractive. The market has largely priced in the 2025 losses.
2. Leadership Premium: Tongwei’s #1 market share in both polysilicon and cells, combined with its emerging strength in modules, gives it unparalleled scale economies.
3. Turnaround Visibility: The rebound in polysilicon prices in Q3 2025 provides visible evidence of margin improvement. Our models suggest a sharp earnings recovery in 2026.
4. Financial Safety: The CNY 33+ billion cash pile provides a decisive advantage over leveraged competitors, allowing Tongwei to invest counter-cyclically and survive the downturn.

Revised Earnings Forecasts:
Due to the prolonged nature of the price depression in H1 2025 and the slower-than-expected recovery in some segments, we have adjusted our earnings estimates.

Note: Previous estimates for 2025/2026 were CNY 3.59bn and CNY 6.32bn respectively. The downward revision reflects the deeper trough in 1H25. A new estimate for 2027 has been added to illustrate the medium-term recovery trajectory.

Key Changes in Forecast Logic:
* 2025: We now expect a full-year loss of CNY 7.62 billion. This assumes that while H2 margins improve due to price rebounds, they will not fully offset the deep losses incurred in H1. The "anti-involution" effects take time to fully flow through to the bottom line.
* 2026: We project a return to profitability with CNY 2.04 billion in net profit. This is driven by normalized polysilicon prices (assumed to stabilize above CNY 50k-60k/ton), higher utilization of N-type capacity, and improved module margins as overseas channels mature.
* 2027: We project robust growth to CNY 5.12 billion in net profit. This reflects a healthier industry structure, where supply and demand are better balanced, and Tongwei’s integrated model delivers optimal margins.

Investment View

Core Investment Logic

1. The "Survivor Takes All" Thesis
The current PV downturn is a classic cyclical shakeout. In such environments, capital intensity and cost leadership are the primary determinants of survival. Tongwei possesses the lowest cash cost in polysilicon production and the largest scale in cells. As weaker players exit the market, Tongwei’s market share is likely to consolidate further. The recent price rebound is not just a cyclical bounce; it is a structural re-rating of the value of efficient capacity. Investors should view Tongwei not just as a commodity producer, but as the consolidator of the industry.

2. Technological Alpha: The N-Type Advantage
The shift from P-type to N-type technology is not merely a product upgrade; it is a barrier to entry. Tongwei’s ability to produce N-type silicon with <0.1 ppbw metal content and <1.04 kg/kg-Si consumption is a testament to its engineering prowess. This technical alpha ensures that Tongwei’s products command a premium and are preferred by high-end cell manufacturers. As the industry fully transitions to N-type in 2025-2026, Tongwei’s legacy P-type competitors will face obsolescence, while Tongwei’s assets remain future-proof.

3. Vertical Integration and Downstream Diversification
Tongwei’s expansion into modules is a strategic masterstroke. By moving downstream, the company:
* Captures More Value: Retains margins that were previously ceded to module assemblers.
* Reduces Volatility: Internal consumption of polysilicon and cells smooths out price fluctuations. When polysilicon prices are low, the module arm benefits from cheaper inputs. When polysilicon prices are high, the upstream arm generates strong cash flow.
* Builds Brand Equity: Success in overseas markets (Europe) builds a consumer-facing brand, reducing reliance on B2B contracts and enhancing bargaining power.

4. Financial Fortitude as a Strategic Asset
In a capital-intensive industry, cash is king. Tongwei’s CNY 33 billion cash reserve is a strategic weapon. It allows the company to:
* Continue R&D spending while competitors cut back.
* Maintain high operating rates to gain market share.
* Potentially acquire distressed assets or technology at bargain prices.
* Weather the storm without diluting shareholders through emergency equity raises.

Valuation Perspective

Investors often hesitate to buy loss-making companies. However, in cyclical industries, the optimal entry point is often when earnings are at their worst (maximum pessimism) and signs of recovery are emerging.

• Current Pricing: The stock price of CNY 21.32 reflects the 2025 loss expectations. The P/B ratio of 2.29x is reasonable for a technology leader with strong assets.
• Forward P/E: Looking ahead to 2026, the implied P/E is ~46x, which may seem high. However, this is based on a conservative recovery estimate. If polysilicon prices sustain above CNY 60k/ton, or if module margins expand faster than expected, 2026 earnings could exceed our CNY 2.04 billion forecast, compressing the forward P/E.
• 2027 Potential: By 2027, with estimated earnings of CNY 5.12 billion, the P/E drops to ~18.5x. This is an attractive valuation for a company with Tongwei’s growth profile and market dominance.

Strategic Recommendations for Institutional Investors

1. Accumulate on Weakness: Given the volatility of the PV sector, dips in the stock price driven by short-term noise (e.g., monthly price fluctuations) should be viewed as buying opportunities. The long-term trend is upward as the industry clears.
2. Monitor Q3 2025 Results Closely: The third quarter will be the first full quarter benefiting from the July price rebound. Key metrics to watch include:
   • Polysilicon average selling price (ASP).
   • Gross margin expansion in the polysilicon segment.
   • Overseas module shipment growth rate.
3. Track Capacity Utilization: Watch for announcements regarding production cuts by competitors. If high-cost capacity exits permanently, it confirms the bullish thesis for Tongwei’s pricing power.
4. Risk Management: Hedge against potential trade policy shocks in Europe. While Tongwei is well-positioned, geopolitical risks are unpredictable. Diversification within the renewable energy sector is advised.

Conclusion

Tongwei Co., Ltd. is navigating one of the most challenging periods in the history of the photovoltaic industry. However, its 1H25 performance demonstrates that it is not merely surviving, but strategically positioning itself for dominance in the next cycle. With superior technology, unrivaled scale, a robust balance sheet, and a successful push into global module markets, Tongwei is well-equipped to capitalize on the impending industry recovery.

The "anti-involution" trends observed in Q3 2025 are the green shoots of a broader recovery. We believe the market has overly penalized Tongwei for the transient losses of 2025, ignoring the substantial earnings power that will re-emerge in 2026 and 2027. Therefore, we maintain our BUY rating, viewing the current valuation as an attractive entry point for long-term institutional capital seeking exposure to the global energy transition’s leading incumbent.

Appendix: Detailed Financial Analysis & Tables

A. Income Statement Analysis (Forecast)

Analysis: The table highlights the dramatic swing in profitability. The gross margin compression in 2025E reflects the full impact of the price war. The recovery in 2026E is driven by both volume growth (25% revenue increase) and margin expansion (Gross Margin nearly tripling to 11.87%). This operating leverage is key to the investment case.

B. Balance Sheet Health

Analysis: The balance sheet shows a deliberate drawdown in cash reserves in 2025E to fund operations and capex during the downturn. However, the rebuild in cash begins in 2026E as profitability returns. The debt ratio remains stable, indicating manageable leverage.

C. Cash Flow Dynamics

Analysis: The forecast shows a significant improvement in Operating Cash Flow starting in 2025E (CNY 10.65 billion), despite the net loss. This is due to heavy depreciation and amortization (non-cash charges) and working capital management. The high CapEx in 2025E reflects the completion of ongoing N-type projects, which then tapers off in 2026/2027, leading to strong free cash flow generation in the later years.

D. Key Valuation Metrics

Analysis: The ROE and ROIC turn positive in 2026, confirming the turnaround. The P/B ratio fluctuates with the book value changes but remains in a reasonable range for a manufacturing leader. The 2027 P/E of 18.5x offers a compelling risk-reward profile for long-term holders.

Final Remarks

Tongwei Co., Ltd. stands at a pivotal juncture. The 1H25 results, while financially weak, operationally confirm the company’s resilience and strategic foresight. The combination of technological leadership in N-type silicon, dominant market share in cells, and successful international expansion in modules creates a multi-layered competitive moat.

For institutional investors, the key takeaway is that the worst of the earnings pain is likely reflected in the current stock price. The emerging "anti-involution" dynamics and the projected recovery in 2026-2027 offer a clear path to value creation. We recommend accumulating positions in Tongwei as a core holding in the renewable energy sector, leveraging its status as the industry’s lowest-cost producer and most financially robust player.

Disclaimer: This report is based on information available as of August 26, 2025. Investors should conduct their own due diligence and consider their risk tolerance before making investment decisions. The forecasts provided are subject to change based on market conditions and company performance.