Ask AI · Why did Teka Holdings’ hedging efforts against risk lead to a massive loss?

Produced by | Bullet Finance

Author | Yu Ying

Editor | Dan Zong

Design | Qian Qian

Review | Song Wen

Back when the solar industry was sliding almost across the board—when even Tongwei Co. and LONGi Green Energy, two giants, were mired in massive losses—Teka Holdings, a leader in domestic photovoltaic silver paste, actually surged against the trend. This led many investors, in recent years, to view it as a high-quality investment target.

But just recently, Teka Holdings released an annual report with a stark contrast: on one side, 2025 full-year revenue first exceeded 18 billion yuan, hitting a new high since its listing; on the other side, attributable net profit recorded a loss of 276 million yuan, the highest loss figure since it began listing.

Even more unexpectedly, the company’s huge loss did not come from production and operations, but from “trading in silver.”

As a silver paste giant, silver powder has long been the company’s main raw material. Since last year, silver prices have stayed at a high level. To hedge the risk of silver price fluctuations, Teka Holdings significantly increased its silver futures trading and silver leasing business. The result was not “risk avoidance,” but instead a massive loss.

A financial operation that deviated from its core business has made this key upstream supplier for solar—waste a winning hand.

1. Hedging risks by “trading silver” — the more you do, the more “heartbreaking”

Public information shows that Teka Holdings was established in 2010 and listed for trading on the Shenzhen ChiNext board in 2020. Its main business is the manufacturing of new electronic pastes, with its main products being photovoltaic conductive silver paste—making it a well-known leading company in China’s photovoltaic silver paste sector.

In terms of revenue, more than 80% of Teka Holdings’ income comes from photovoltaic silver paste. In 2025, the company’s photovoltaic materials segment achieved operating revenue of 14.866 billion yuan, accounting for 82.38% of total operating revenue and up 15.67% year over year, making it its largest revenue source.

Silver paste is an essential consumable for manufacturing photovoltaic solar cells. It is made up of silver powder, organic solvents, and binders, and it is coated on the surface of the solar cells to form the electrode structure.

Therefore, silver paste has both conductivity and bonding properties, allowing a uniform and reliable connection between electrodes and solar cells. Without photovoltaic silver paste, solar cells simply cannot operate normally.

In the cost structure of photovoltaic cells, besides silicon wafers, which account for nearly 70%, photovoltaic auxiliary material costs have the largest share. And among all auxiliary materials, photovoltaic silver paste costs account for the biggest portion.

According to incomplete statistics, photovoltaic silver paste accounts for about 35% of the non-silicon auxiliary material cost and 13% of overall costs. The raw materials for silver paste mainly include high-purity silver powder, a glass system, and organic carriers. Among them, silver powder is the most important, accounting for about 90%.

This means that fluctuations in silver prices are directly transmitted to the silver paste raw material cost side.

(Chart / Photo by Qiantuyun, based on the VRF protocol)

In 2025, silver prices surged wildly, especially in the second half. In mid-October, international silver prices even hit a historical high of 54.468 USD per ounce. Futures Daily data also shows that from November 21, 2025 to January 21, 2026, the Shanghai silver price jumped from 11,697 yuan per kilogram to 23,228 yuan per kilogram—doubling in just two months.

Under normal circumstances, the operating model of Teka Holdings could have effectively smoothed the impact caused by silver price volatility. The company mainly adopts a production model of “produce according to sales” and a procurement model of “place orders according to production,” where, under this pricing setup, fluctuations in the purchase price of silver powder can be passed down to downstream customers through sales pricing. As a result, the company would not need to directly bear the risk of major fluctuations in the silver powder price.

But to further “hedge the risk of silver price fluctuations and reduce silver powder procurement costs,” the company carried out two additional actions:

To respond to the risk of silver powder price fluctuations, the company conducted hedging through silver futures contracts;

To reduce silver powder procurement costs and respond to the risk of silver powder price fluctuations, the company carried out silver leasing business.

But it just so happened that Teka Holdings expanded the scale of its silver futures trading in the fourth quarter of 2025—that is, at a time when silver prices had already risen to historical highs.

According to the “Feasibility Analysis Report on Carrying Out Financial Derivatives Trading Business” released by the company on October 28, 2025, it shows that “the company and its subsidiaries intend to use their own funds to carry out foreign exchange derivative product trading with a time-point balance not exceeding 2.5 billion yuan, with a margin investment limit of not more than 200 million yuan for silver futures/options contract trading.”

Hedging activities themselves are highly professional and complex. When silver prices were already at historical highs and a turning point in the market could appear at any time—prompting a heavy increase in positions—this not only completely lost the early-mover advantage of hedging risk, but also caused the transaction to deviate entirely from the original purpose of hedging. Ultimately, it resulted in a massive loss.

The final outcome is reflected in the 2025 annual report. In its 2025 annual report, Teka Holdings clearly stated in the non-recurring profit and loss line items that, besides effective hedging activities related to normal operating business, the fair value change profit or loss arising from financial assets and financial liabilities held by non-financial enterprises, as well as gains/losses from the disposal of financial assets and financial liabilities—this amount reached as much as 641 million yuan.

It also further disclosed in non-main business items that the investment income was -272 million yuan; fair value changes were -411 million yuan. This is exactly the direct loss brought by the silver futures and leasing businesses, and the losses were mainly concentrated in the fourth quarter.

(Chart / Teka Holdings’ 2025 annual report)

Meanwhile, cash flow under the company’s operating side was also under pressure. Net cash flow from operating activities fell 28.88% year over year to 667 million yuan.

In response, Teka Holdings said that the core reason for the decline in cash flow was the mismatch of payment terms between upstream and downstream. The company provides downstream customers with a certain credit period, and collections mainly come in the form of bank acceptance bills. However, when purchasing from upstream silver powder suppliers, the company needs to pay in full in advance or pay within a very short credit period, so the cash inflow from sales collections consistently lags behind the cash outflow for purchases.

At the same time, as the company’s sales scale increased in 2025, the procurement payments required to stock up also increased in step, further intensifying the tightness of cash flow.

Operating revenue from the main business maintained growth of more than 15%, but operating cash flow fell nearly 30% year over year. In addition to the industry-wide common reasons stemming from payment-term mismatches between upstream and downstream, the margin occupation from the silver futures operations and the cash outflow from the actual loss may have further increased the company’s funding pressure.

This means the ability of Teka Holdings’ main business to generate cash flow has been significantly weakened by financial speculation. If silver markets continue to fluctuate later on, the company’s ability to withstand pressure on its capital chain and its risk-resilience capabilities will face even greater tests.

2. Revenue hit a new record high since listing—yet the third-largest customer is actually a subsidiary of its own

“Bullet Finance” noticed that in 2025, Teka Holdings’ operating revenue was 18.046 billion yuan, up 17.56% year over year, hitting a new high since listing. Of this, 60% of revenue was contributed by the top five customers.

It’s worth noting that the company’s third-largest customer is its controlling subsidiary Zhejiang Suot—acquired by the company only in 2025 and included in the consolidated financial statements.

(Chart / Teka Holdings’ 2025 annual report)

On July 26, 2025, Teka Holdings planned to acquire 60% of the equity interests in Zhejiang Suot for 696 million yuan in cash, valuing the company as a whole at 1.16 billion yuan. But in reality, this is not the first time the company has targeted this asset.

As early as July 2021, Teka Holdings initiated the acquisition of 100% of the equity interests in Jiangsu Suot for a transaction value of 1.247 billion yuan.

However, during the deal process—affected by adjustments to photovoltaic industry policies, silver price fluctuations, and the fact that the appraisal institution was filed for investigation by the CSRC due to other projects—the company’s fund-raising and acquisition plan was terminated in September 2022. After three years, Teka Holdings finally restarted the acquisition.

So why is the company so persistent in acquiring Zhejiang Suot? Its most core goal is still to obtain the photovoltaic silver paste business of Solamet under the U.S. DuPont group that it has in its portfolio.

According to publicly available information, the Solamet business has been deeply involved in the electronic paste industry for over forty years. It is a pioneer and technology leader in the global field of photovoltaic conductive paste. It has formed a complete technical barrier in three core areas: glass systems, silver powder, and organic carriers. It holds 229 granted effective patents worldwide, building a highly competitive knowledge-property moat in photovoltaic conductive paste.

Its product matrix covers a broad range, including core products such as front-side silver paste and back-side silver paste, and it can be adapted to nearly all mainstream and next-generation photovoltaic cell technology routes, including P-BSF, P-PERC, N-PERT, N-TOPCon, N-IBC, HJT, and thin-film cells. Downstream customers include global photovoltaic leaders such as JinkoSolar, LONGi Green Energy, and JA Solar Technology.

More importantly, the Solamet business has always been at the forefront of industry technology. In 2023, it was the first to achieve mass production of paste using TOPCon laser carrier injection technology, directly推动ING an industry upgrade of the metallization technology of TOPCon cells, greatly improving the market competitiveness of its battery products;

In its next-generation battery technology roadmap, it is globally leading in the fields of HJT/HBC battery silver-coated copper paste and ultra-low-temperature curing silver paste for perovskite/silicon stacked cells, and it also has deep R&D accumulation in key cost-reduction core tracks such as “cheap metal paste.”

However, despite being backed by top-tier technology, Zhejiang Suot’s performance shows a stark “ice-and-fire” pattern, and the market also debates the degree to which its valuation matches its profitability.

Financial data shows that in 2023, Zhejiang Suot achieved operating revenue of 1.261 billion yuan and a net profit loss of 12.56 million yuan. In 2024, the company’s performance reversed: revenue surged to 3.553 billion yuan, and it turned from loss to profit, achieving a profit of 50.91 million yuan.

But corresponding to this deal, the valuation of the 100% equity interests subject to the transaction was as high as 1.16 billion yuan. Based on the PE ratio (price-to-earnings) relative to net profit in 2024, it reached 23x—significantly higher than the average valuation level of the photovoltaic auxiliary materials industry in the same period.

Even though the valuation is high, the effect came quickly.

After the acquisition was completed in 2025, within just the four months from September to December, Zhejiang Suot contributed 2.285 billion yuan in operating revenue to Teka Holdings, and net profit of 29.463 million yuan.

(Note: The consolidated financial data of Zhejiang Suot Materials Technology Co., Ltd. in the table above represent operating data for September–December 2025.)

Even more worth attention is that, besides the performance increment brought by consolidation, Zhejiang Suot also made large-scale product purchases from its parent company Teka Holdings in 2025—the purchase amount reached 2.347 billion yuan.

It is precisely this massive internal transaction, combined with the revenue increment from consolidation, that directly pushed Teka Holdings’ total operating revenue to the highest historical level since its listing.

(Chart / Teka Holdings’ 2025 annual report)

But problems also came along: the controlling subsidiary is simultaneously listed among the company’s top three customers. This “left hand to right hand” internal transaction keeps the risks of related-party transactions high, and also makes the market question the authenticity and sustainability of its revenue growth.

According to information disclosed in the company’s annual report, the company had estimated the related-party transaction amount for this year to be no more than 2.6 billion yuan at the beginning of the year. In 2025, the actual amount of related-party transactions was 2.347 billion yuan. While it did not exceed the total expected amount, it is already extremely close to the upper limit—making it a typical “borderline crossing.”

Such a precise placement of a massive related-party transaction within the expected allowance inevitably leads the market to doubt whether there is room for management to manipulate revenue and optimize performance reporting.

In response to these questions, “Bullet Finance” attempted to further understand Teka Holdings, but after calling the company’s external contact numbers multiple times, no one answered.

(Chart / Teka Holdings’ 2025 annual report)

3. Betting on storage chips to seek new growth

Against the backdrop of Teka Holdings suffering massive losses from trading silver within its photovoltaic main business, profit performance remaining under pressure, and growth highly dependent on related-party transactions, Teka Holdings’ 2025 financial report also showed a new highlight: its cross-border foray into the storage chip business saw explosive growth over the past year.

According to annual report disclosures, in 2025, Teka Holdings’ storage chip business achieved operating revenue of 503 million yuan, a year-over-year surge of 574.63%.

(Chart / Photo by Qiantuyun, based on the VRF protocol)

More noteworthy are the profitability indicators: this business’ gross margin is as high as 47.46%, completely different from the low single-digit gross margin of its photovoltaic silver paste main business. Even though, at present, the storage chip business’ revenue accounts for only 2.79% of total revenue, its gross profit contribution ratio has already reached 14.55%, making it an important source of profit supplementation for the company.

“Bullet Finance” noted that after the photovoltaic industry entered a stable development stage, Teka Holdings had been seeking a second growth curve.

In 2024, Teka Holdings completed the acquisition of 51% of the equity interests in Shenzhen Yinpeng Holding Technology Co., Ltd., officially entering the storage chip track.

Worth mentioning is that this asset, selected by the listed company and used as the cross-industry starting point, was established only about a month before the acquisition, with its core business focusing on the application development of storage chips, solution design, and sales. Its main products include DRAM storage chips such as DDR4, LPDDR4, and LPDDR5.

And only one year later, the company again increased its investment in the storage track. In October 2025, Teka Holdings announced that it would acquire 62.5% of the equity interests in Jiangsu Jingkai Semiconductor Technology Co., Ltd. for 300 million yuan in cash, seeking to extend the storage chip business industrial chain—from downstream solution design and sales—upstream into manufacturing links such as packaging and testing, wafer singulation testing, and more.

According to publicly available information, this transaction is not an unrelated third-party acquisition, but a typical related-party transaction. Jiangsu Jingkai and the Yinpeng Holding Technology acquired earlier are both actually controlled by Zhang Yaqin and his spouse. The counterparty in this transaction is precisely Zhang Yaqin, the minority shareholder of Yinpeng Holding Technology, and his related parties.

Additionally, the most controversial issue in the market is its excessively high valuation premium. According to the acquisition announcement, the premium rate for the target was as high as 930.28%. But from the target’s fundamentals, the target being acquired at such a steep premium has not demonstrated operational strength that matches its valuation.

As of the valuation benchmark date, Jiangsu Jingkai’s book net assets were only 35.0389 million yuan. In the first quarter of 2025, it generated operating revenue of merely 16.5418 million yuan, and net profit was a loss of 3.72 million yuan. It had not yet formed stable profitability.

In its 2025 annual report, Teka Holdings also did not disclose Jiangsu Jingkai’s financial data. It only mentioned that it was included in the consolidated financial statements starting in October of last year and had not had a major impact on performance. Its subsequent operating performance and performance realization capability remain highly uncertain.

(Chart / Teka Holdings’ 2025 annual report)

Although the two acquisitions enabled the storage chip business of Teka Holdings to grow rapidly, on the other side, the successive acquisitions with high valuation premiums have caused the company’s goodwill scale to skyrocket, and impairment risks are high.

Data shows that in 2025, the company’s goodwill increased from 33 million yuan at the beginning of the period to 640 million yuan by the end of 2025, nearly increasing by 20 times. If the acquired targets’ performance in the future fails to meet expectations, the company will face a large goodwill impairment.

Overall, whether it is investing in the silver trading business or cross-border acquisitions, both represent Teka Holdings’ transformation and self-rescue from the inside out. But each step, though it seems reasonable in arrangement, also hides significant risks. For real manufacturing enterprises, only by deeply focusing on the core business and holding onto the fundamental operating base can you truly cross industry cycles.

The featured image in the article is sourced from: Photo by Qiantuyun, based on the VRF protocol.