Net profit of 680 million! The 'King of Photovoltaic Auxiliary Materials' turns from bad to good.

The bottom of the photovoltaic cycle has been solidified.

The industry is waiting for the arrival of "spring." Everything is ready now, and all that's missing is the east wind.

Of course, although the industry cycle is still at the bottom, some companies continue to perform relatively well, such as First.

Financial reports show that in 2023, First achieved revenue of 22.59 billion yuan, a year-on-year increase of 18.5%, and net profit of 1.85 billion yuan, a year-on-year increase of 17.2%, with both revenue and net profit achieving double-digit growth. In 2024, First achieved revenue and net profit of 19.15 billion yuan and 1.308 billion yuan, respectively, with revenue and net profit growth rates of -15.23% and -29.33%. Although performance showed negative growth, the overall decline was not too significant.

By 2025, First still performed well.

According to the latest disclosed third-quarter report, in the first three quarters of this year, First achieved revenue of 11.79 billion yuan, a year-on-year decline of 22.32%, and net profit of 687.6 million yuan, a year-on-year decline of 45.34%, with both revenue and net profit beginning to decline at an accelerated pace.

In the third quarter, First achieved revenue and net profit of 3.829 billion yuan and 191.8 million yuan, respectively, with revenue and net profit growth rates of -13.18% and -41.29%.

Against the backdrop of an overall industry downturn, First was still able to maintain positive profits, demonstrating the company's strong cost-control capabilities.

The "Big Brother" of Auxiliary Materials

In the vast universe of the photovoltaic industry, market attention is often focused on core segments such as silicon materials, silicon wafers, and modules.

However, photovoltaic auxiliary materials such as films, backsheets, glass, and frames are equally important, as they maintain the stable operation of the entire photovoltaic industry chain.

Among the various auxiliary materials, films are undoubtedly the most critical. As key encapsulation materials, they directly determine the weather resistance, light transmittance, and service life of modules. In a complete photovoltaic panel, films bond the cells, glass, and backsheet together like a "sandwich," preventing moisture and dust erosion and ensuring stable power generation over a lifespan of more than 25 years.

Founded in 2003, First is the invisible champion in this niche field of films.

Records show that First's birth stemmed from a keen insight by its founder, Lin Jianhua. At the time, the domestic photovoltaic industry was still in its infancy, and due to technological backwardness, photovoltaic auxiliary materials were highly dependent on imports, with the market largely monopolized by international giants such as Japan's Mitsui Chemicals and Germany's Henkel. To break the foreign monopoly in the photovoltaic auxiliary materials sector, Lin Jianhua resolutely founded First. After two years of technological breakthroughs, First successfully achieved mass production of EVA films in 2005, which not only broke the technological monopoly of foreign companies but also helped First quickly open the market with excellent cost performance.

After mastering core technologies, First's subsequent journey has been relatively smooth. Following the mass production of EVA films, First successively launched innovative products such as white EVA and POE films, significantly improving the aging resistance and anti-PID characteristics of its products while enhancing module power generation efficiency. This technology-driven development model has allowed First to rise rapidly in the global market. By 2023, First's annual film production capacity exceeded 4 billion square meters, with a global market share of over 55%, meaning that at least one out of every two modules worldwide uses films produced by First.

However, a turning point also emerged in 2023. In 2022, due to a significant improvement in the photovoltaic industry's prosperity, the entire industry fell into a frenzy of "capacity expansion." Although films are a high-barrier field, driven by strong wealth-creation effects, the film sector also began a frenzied expansion. In addition to established players like First, Sveck, and Hiuv, newcomers such as Baijia Niandai and Xiangbang Technology joined the fray, leading to a rapid expansion of industry capacity. By 2024, China's total film production capacity had exceeded 6 billion square meters.

With the gradual overcapacity, price competition within the industry also emerged. Data shows that film prices dropped from 15-18 yuan per square meter in 2022 to 7-9 yuan in 2025.

As the "big brother" of auxiliary materials, First has also been affected by price competition.

According to third-quarter data, in the first three quarters of this year, First achieved revenue of 11.79 billion yuan, a year-on-year decline of 22.32%, and net profit of 687.6 million yuan, a year-on-year decline of 45.34%. In the third quarter, First achieved revenue and net profit of 3.829 billion yuan and 191.8 million yuan, respectively, with revenue and net profit growth rates of -13.18% and -41.29%.

The reason for the performance decline is precisely the competition in the photovoltaic market. In the first half of this year, the gross margin of First's core business, "photovoltaic films," was only 11.4%, compared to 16.76% in the first half of 2024.

After Hardship Comes Prosperity

Currently, in addition to the operational pressure from pricing, First faces another potential risk: the trend of major photovoltaic companies transitioning toward "vertical integration."

In recent years, as competition in the photovoltaic industry has intensified, leading companies have unanimously chosen vertical integration. Giants such as LONGi Green Energy, Tongwei, and JinkoSolar have laid out full industry chains from "silicon materials to silicon wafers to cells to modules," aiming to control costs, enhance industry influence, and improve risk resistance through integration.

It is worth noting that the trend of full industry chain integration is gradually extending downstream to auxiliary materials. To reduce costs, module manufacturers have begun building their own film and backsheet production capacity.

Records show that JinkoSolar launched a 500-million-square-meter film project in 2024, while Trina Solar entered the film sector through a joint venture. The strategic intent of module giants is clear: to internalize previously outsourced auxiliary material segments and further squeeze cost reductions.

For First, the "big brother" of auxiliary materials, the move by photovoltaic giants to build their own film capacity also validates the company's value.

Industry estimates suggest that by 2026, the self-sufficiency rate of leading module manufacturers for films could exceed 40%, which will continue to pressure First's order stability.

However, integration is ultimately an industry trend, and First recognized this early on. As a result, it has long turned its focus overseas, hoping to break the deadlock through international markets.

Records show that First is accelerating its global production layout. After the completion of its Phase I 100-million-square-meter project in Thailand, Phase II 250-million-square-meter project in Vietnam, and Phase II 250-million-square-meter project in Thailand, its overseas capacity will reach 600 million square meters, with overseas shipments expected to account for 15%-20% of total output. However, First's overseas expansion still needs to accelerate. In the first half of this year, its overseas revenue was 2.028 billion yuan, accounting for 25.48% of total revenue.

In addition to expanding overseas markets, First is also accelerating the development of its new electronic materials business. Financial reports show that in the first half of this year, First's "dry film" sales reached 90 million square meters, a year-on-year increase of 21.62%. However, the scale of this business remains relatively small, with revenue of 325 million yuan in the first half, accounting for only 4.08% of total revenue. For First, it is actively seeking a second growth curve.

In summary, we believe that as the industry downturn nears its end, the "spring" for the photovoltaic industry will arrive. The clearing of industry capacity presents an excellent opportunity for First to reach the next level.