China Zhongji Investment completed a targeted investment in "Zhonghuan Shares"

Recently, China Zhongji Investment completed a targeted investment in Tianjin Zhonghuan Semiconductor Co., Ltd. (stock abbreviation: Zhonghuan Shares, code: 002129) through a private placement. Established in 1988 and listed on the Shenzhen Stock Exchange in April 2007, Zhonghuan Shares is a leading domestic semiconductor polishing wafer manufacturer and a global leader in photovoltaic monocrystalline silicon wafers.

Zhonghuan Shares' predecessor was Tianjin Semiconductor Materials Factory, established in 1958. It began producing silicon materials using the Czochralski method in 1969, the float-zone method in 1978, and entered the photovoltaic industry in 1981. Currently, the company's main business revolves around silicon materials, starting with and based on monocrystalline silicon, primarily divided into semiconductor and new energy sectors.

The semiconductor sector's business mainly involves semiconductor wafers and semiconductor devices, with 8-12 inch semiconductor polishing wafers as the primary products. Currently, Zhonghuan Shares' 8-inch float-zone wafer technology is globally leading, with continuously improving technology and quality. It accounts for over 50% of the domestic 8-inch wafer supply; 12-inch semiconductor wafers have achieved mass production, making it one of the fastest-progressing suppliers in China.

The new energy sector's business includes photovoltaic wafers, photovoltaic cells and components, and the construction and operation of photovoltaic power plants. Its main product is photovoltaic monocrystalline silicon wafers, where Zhonghuan Shares is one of the global "two oligarchs." In 2019, the company was the first in the world to launch 210-size photovoltaic monocrystalline silicon wafers, significantly reducing the cost of cells, components, and systems. It has become the preferred choice for new photovoltaic cell production lines and, if progress is smooth, is expected to further improve the production efficiency of the entire photovoltaic industry chain.

Zhonghuan Shares adheres to technology-driven development, establishing an independent R&D team. It possesses one national-level technology center, five provincial and ministerial-level R&D centers, two provincial and ministerial-level key laboratories, five high-tech enterprises, and one national technological innovation demonstration enterprise, having received numerous national awards. The company has independently developed monocrystalline technology and diamond wire cutting technology, leading the advancement of 210-size large silicon wafer technology. It is the only silicon wafer manufacturer in China with both Czochralski and float-zone semiconductor wafer preparation technologies and is one of only three manufacturers globally that possess high-speed rail IGBT production technology.

Meanwhile, Zhonghuan Shares leverages long-term cooperation with global clients and its business model advantages. Its technological R&D cooperation and product joint verification are progressing smoothly, and it has achieved high market recognition among leading global industry clients. In 2016, Zhonghuan Shares also introduced SunPower as a strategic investor, bringing global patented high-efficiency shingled cell technology to China.

The China Zhongji Investment project team believes that wafers are the most important upstream raw materials for semiconductors. Currently, large semiconductor wafers are monopolized by foreign manufacturers, and domestic large wafers urgently need to break through this situation. Furthermore, the demand for large-size wafers is rapidly increasing with the development of industries such as 5G, the Internet of Things, and artificial intelligence. On the photovoltaic side, the global era of grid parity has begun, with market-driven price reductions and increased volume. Zhonghuan Shares has focused on monocrystalline silicon technology for fifty years, possessing a unique global dual-industry chain layout of semiconductors and new energy. Coupled with TCL becoming the final transferee of Zhonghuan Shares' mixed-ownership reform project this year, the company's operational and management capabilities are expected to further improve, accelerating industry chain synergy and stimulating the potential for performance growth.

Links:

New Infrastructure Investment Professional Committee

Hebei Provincial Federation of Industry and Commerce

China Securities Investment Fund Association

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