#China #Hong Kong #polysilicon #GCL Technology #FBR

GCL Technology Strategic Shift

GCL Technology, listed under stock code 3800.HK, has made a significant decision by fully exiting all investments related to Siemens-method rod-polysilicon production in Xinjiang. This move came to light through their recently published 2024 annual financial report dated March 28, 2025. The report highlighted their efforts and progress in enhancing operational efficiency amid a highly competitive industrial landscape.

Financial Performance and Growth

In the first two months of 2025, GCL Technology reported a decrease in average cash costs to CNY 27.14 per kilogram for granular polysilicon, coinciding with an increase in the tax-exclusive selling price to CNY 31.1 per kilogram. This improvement is even more noteworthy compared to the 3Q 2024 figures, which demonstrated cash costs at CNY 33.18/kg and a selling price that was lower at CNY 28.98/kg. Impressively, over 95% of their products have been identified as high-quality granular polysilicon, equating to a 25.76% share of the market.

In 2024, GCL Technology successfully ramped up its production capacity, reaching a total of 480,000 tons of granular polysilicon. This achievement included a year-on-year production increase of 32%, resulting in a total output of 269,200 tons and shipments surging by 45% to 281,900 tons. The company's sales-to-production ratio marked an impressive 105%, indicating robust operational efficacy.

Complete Exit from Xinjiang Investments

On January 20, 2025, GCL Technology's subsidiary, Jiangsu Zhongneng, divested its indirect interest in Xinjiang Goens, thereby completing the exit from its involvement in Siemens-method polysilicon production. Earlier, in December 2023, the company had disclosed plans by its Xinjiang associate which included a dividend distribution and a share repurchase, leading to some retained indirect ownership. However, the latest developments confirm that GCL Technology severed all links with the production in Xinjiang, emphasizing its strategic pivot toward its key production bases located in Xuzhou, Leshan, Hohhot, and Baotou.

Commitment to Human Rights and Production Standards

A representative from GCL Technology emphasized the primacy of human rights in their operational framework. The company espouses principles of freedom and equality while maintaining a zero-tolerance stance on forced labor and discrimination within their business practices. By adhering to recognized human rights standards globally, GCL Technology aims to align its operations with both domestic and international laws.

Currently, four of their major production facilities have obtained the SA8000 certification for Social Responsibility Management System, with plans to cover over 70% of their operations through two additional facilities that are in the certification process.

In conclusion, GCL Technology is not only reorienting its focus toward more sustainable and ethical production methods but also reinforcing its market position in the granular-polysilicon segment, demonstrating resilience and adaptability in a rapidly changing industry landscape.