Preview of new stocks in the US stock market | Industry anti-involvement helps to repair the fundamentals, how does New Subee Optoelectronics (XZ.US) break into the top tier of the industry?

Since June, with the continuous release of policies related to anti-internal competition, the photovoltaic industry has gradually begun to promote the orderly exit of backward production capacity, leading to a sharp rebound in photovoltaic concept stocks in the secondary market. Stocks such as Changzhou Almaden (002623.SZ) and Shenzhen Topraysolar (002218.SZ) surged by over 50% in just a few trading days. As the industry's anti-internal competition heats up, Hangzhou-based New Subsidiary Light Electric, which specializes in the research, development, production, and sales of photovoltaic module encapsulation film, is accelerating its journey to list in the United States. It was learned that on March 19, New Subsidiary Light Electric submitted its initial public offering statement (F-1 document) to the SEC for the first time, and then updated the prospectus on July 1. According to the prospectus, New Subsidiary Light Electric has applied to list on Nasdaq with the code "XZ" and has significantly increased the amount of funds raised. It plans to issue 3.75 million shares at a price of $4-6 per share, aiming to raise up to $22.5 million, a 150% increase from the previously planned 1.5 million shares. Behind the significant increase in the amount of funds raised may be the market's recognition of the true value of New Subsidiary Light Electric. So what is it about New Subsidiary Light Electric that attracts investors? This may be explored through the company's prospectus. Maximum Potential Capacity Reaching 15GW Traditional CECEP Solar Energy panels use crystalline silicon (C-Si) technology, which has been developed for many years and is relatively mature and reliable, with high energy conversion efficiency. However, the disadvantages are also clear - the actual light absorption efficiency is low, thickness is required to improve actual efficiency, and the cost is high due to material purity and preparation process limitations. Photovoltaic films only require a thickness of a few micrometers to achieve photoelectric conversion, making them an ideal material for reducing costs and increasing photon recycling efficiency. Currently, the main types of transparent photovoltaic films include copper indium gallium selenide (CIGS), cadmium telluride (CdTe), and amorphous silicon (a-Si). Among them, CIGS has the highest conversion efficiency and stability and is currently the most mainstream transparent photovoltaic film material. Photovoltaic films are widely used in various fields such as electronic components, integrated optics, electronic technology, infrared technology, laser technology, aerospace technology, and optical instruments. It is not only an important means of material surface modification, but also a key method for improving process levels. New Subsidiary Light Electric focuses on the research, development, production, and sales of transparent CECEP Solar Energy photovoltaic module encapsulation films ("photovoltaic films"). The company's current products include transparent EVA films, white EVA films, POE films, EPE films, etc., with POE extrusion films accounting for 45% of the company's production capacity, white and black films accounting for 15%, and other transparent films accounting for approximately 40% of the company's production capacity. According to the prospectus, New Subsidiary Light Electric's current maximum capacity is 3GW, accounting for 2%-3% of the market share. The company stated that this is mainly due to cash flow constraints. Once conditions are met to purchase more equipment, continuously reduce defect rates, and optimize internal processes, the company's maximum potential capacity can reach 15GW. In terms of performance, New Subsidiary Light Electric's performance in 2024 was not satisfactory. Data shows that the company's revenue in 2024 was $25.1419 million, a year-on-year decrease of 23.47% from 2023, and net profit turned into a loss of $340,000, compared to a profit of $458,600 in 2023. The main reason for the decrease in revenue was industry contraction, as the photovoltaic film industry is oligopolistic, with leading companies integrating through price cuts and capacity expansion, leading to the erosion of market share for New Subsidiary Light Electric as a third-tier company. Additionally, the decrease in raw material prices led to a 31.7% decrease in product unit price, a 6.34% decrease in sales volume, affecting revenue performance. After the decrease in product unit price, the company's gross profit margin was also slightly affected, decreasing from 11.17% in 2023 to 10.61%. Coupled with the growth in general and management services and credit loss provisions, this put further pressure on the company's profitability, resulting in a loss in 2024, with a net profit margin of -1.35%, compared to a net profit margin of 1.4% in 2023. Of course, such performance for New Subsidiary Light Electric is relatively normal in the current industry context. In 2024, the photovoltaic film industry faced a double pressure of intensified price wars and overcapacity, with the average price of film dropping by 20%-30% compared to the previous year, and an overcapacity rate exceeding 50%. The entire industry fell into a low-price competition, resulting in reduced revenue and profits for most companies. Even the industry leader, Hangzhou First Applied Material, saw a 15% decrease in revenue in 2024, with net profit dropping by nearly 30%. The fourth-ranked company in the industry, Shanghai Hiuv New Materials Co.,Ltd, saw a more than 46% decrease in revenue from film in 2024, with net losses further expanding to 558 million yuan. Technological Breakthroughs and Overseas Expansion Key to Breaking into Industry's Top Tier Due to overcapacity and price inversion in the photovoltaic industry, the industry-wide loss crisis is imminent, with the entire industry facing the vicious cycle of "increased production without increased profits -> technological stagnation -> intensified homogenization." Regulatory authorities have also recognized this risk and intervened in a timely manner. At the policy level, the government has introduced a set of measures since June. In June 2025, the revised "Anti-Unfair Competition Law" explicitly prohibits "selling below cost price." This law will come into effect on October 15, setting a legal red line for price wars. On July 1, the Central Finance and Economics Committee meeting required "law-based governance of low-price disorderly competition and promotion of the exit of backward production capacity." Not only that, on July 3, the Ministry of Industry and Information Technology held a symposium with 14 leading companies participating. The meeting proposed "comprehensive governance of low-price competition, mandatory exit of inferior production capacity," and requested companies to report cost prices, with severe penalties for selling below cost in the future. Under the supervision of policies, industry self-regulation has also accelerated. Starting from July 2025, the top ten manufacturers of photovoltaic glass have collectively reduced production by 30% to relieve inventory pressure (current inventory levels reach 45 days). Additionally, the operating rate of silicon wafer companies has dropped to 50%-80% in July, with leading companies planning to reduce production by 40%. Clearly, with both policy intervention and industry self-regulation, the banner of anti-internal competition in the photovoltaic industry is being unfurled quickly. This may herald a major change in the photovoltaic industry's supply side, potentially breaking the cycle of "overcapacity -> price war -> industry-wide losses" through a combination of "strict policies + industry self-discipline." This has already shown some preliminary results. For example, on July 7, the offer price for polysilicon by leading companies was raised to 37 yuan/kg (previously long below the cash cost price of 30,000 yuan/ton) for the first significant rebound in nearly two years. It is foreseeable that anti-internal competition in the photovoltaic industry will alleviate the survival pressure of enterprises in the short term through "reducing production to maintain prices," which will help in restoring the fundamentals of companies in the industry. However, in the long term, whether it is the entire photovoltaic industry or the photovoltaic film industry as a specific segment, restructuring competition dimensions through technological classification and global layout is necessary. Especially for companies like New Subsidiary Light Electric, abandoning the race for production capacity and turning to a dual strategy of "technological breakthroughs" + "high-margin overseas markets" may be more effective. By maintaining cash flow through BIPV transparent films, binding core customers to secure orders for steady development, and leveraging US stock financing to drive the development of perovskite research, New Subsidiary Light Electric can aim to challenge the industry's top players in the segment after reaching a capacity of 10GW in 2026, ultimately achieving growth breakthroughs or the key to entering the top tier of the industry from the third tier. From the prospectus, it appears that New Subsidiary Light Electric has continued to increase research and development efforts and has made some progress in expanding into overseas markets. In mid-2024, the company had 17 research projects related to the production technology and preparation methods of photovoltaic films, as well as the research and development of photovoltaic film equipment and systems. As of December 31, 2024, five of these projects are still ongoing. Regarding overseas expansion, New Subsidiary Light Electric achieved its first export breakthrough in 2022 and began targeting the Vietnamese market from 2024. Currently, the company has reached a cooperative agreement with Vietnam Green Energy Commercial Services Co., Ltd. on EVA films. Whether New Subsidiary Light Electric can leverage its existing achievements and the assistance of capital from listing to break into the top tier of the industry through technological breakthroughs and overseas market expansion will be the core factor determining its future stock price growth potential.