Chinese PV firm to sell US subsidiary amid policy uncertainty linked to “One Big Beautiful Bill Act”

A Chinese solar company with manufacturing operations in the United States has decided to exit the local market by selling its US subsidiary, citing policy uncertainty related to the “One Big Beautiful Bill Act.”

Zhenjiang New Energy Equipment Co. announced that it plans to sell 100% of the equity in its US subsidiary, Zhenjiang New Energy (USA) Technology Corporation, located in Houston, Texas, to India-based Zetwerk Manufacturing Businesses Limited.

The proposed transaction is valued at approximately US$22.15 million, equivalent to about RMB153 million.

According to the company, the decision was influenced by changes in the US policy environment that have affected customer purchasing plans.

“Due to relevant local US policies, Zhenjiang USA’s core customers have temporarily adjusted their 2026 order arrangements to ensure compliance with the eligibility criteria for project tax incentives,” the company said.

It added that after considering the subsidiary’s current operating conditions, its expected performance in the first quarter, and uncertainties surrounding future earnings and cash flow, the company decided to sell the asset.

“The transaction will help optimise the company’s asset structure, improve project operational quality, and enhance its ability to withstand risks,” Zhenjiang New Energy Equipment stated.

However, the announcement quickly drew scrutiny from the Shanghai Stock Exchange (SSE). On the same evening the sale was disclosed, the SSE issued an inquiry letter requesting further clarification on several aspects of the deal.

The exchange has asked the company to provide additional details regarding the quality of the assets being sold, the buyer’s ability to complete the transaction, and the reasonableness of the valuation. Zhenjiang New Energy Equipment has been asked to submit a written response within five trading days.

The regulator also raised questions about the operating performance of the US subsidiary.

Zhenjiang USA was originally part of a fundraising project linked to the company’s 2022 non-public share offering, titled “Construction of a Production Line for Large PV Mounting Structure Components.”

In April 2023, the project was revised to become the “Construction of a US PV Mounting Structure Components Production Line,” with Zhenjiang USA serving as the implementing entity. Construction was completed and the project concluded in June 2024, with a total investment of RMB133 million in raised funds.

Despite the investment, the subsidiary’s financial performance has been weak.

Although Zhenjiang USA’s revenue surged 118.60% year-on-year in 2025 to US$33.6 million, the company has recorded net losses for two consecutive years.

As of the end of 2025, the subsidiary reported total liabilities of US$52.3 million, while its net assets had declined to US$9.2 million.