"Success with silver, failure with silver"—is the root cause of Dico Shares' massive losses all due to side businesses?

As a leading photovoltaic conductive paste company, Tike Zongshi (300842) delivered an extremely contrasting annual report in 2025: full-year revenue exceeded 18 billion yuan, up 17.56% year over year, and its revenue scale hit a new record; but attributable net profit plunged in a cliff-like manner to -276 million yuan, down 176.80% year over year, swinging directly from profit to loss and recording the worst performance since listing.

This “higher revenue, lower profit”—and even massive loss—results, are not simply caused by industry cycles and fluctuations in raw material prices. Behind the scenes are the speculative losses from its silver hedging and reserve-taking business, potential risks from large patent lawsuits, and multiple governance loopholes at the company level. The combined effect of multiple negative factors has pushed this PV segment leader into unprecedented operational difficulties.

Revenue growth cannot hide profit collapse

In 2025, Tike Zongshi continued to expand its revenue scale, seemingly maintaining the growth momentum of an industry leader. In reality, the profitability side suffered an across-the-board breakdown: the core profitability of its photovoltaic main business kept declining, becoming an underlying cause of performance losses.

The company’s core business is conductive paste for metallization in photovoltaic cells. This business contributed more than 82% of annual revenue. Meanwhile, silver powder, as the key core raw material for conductive paste, accounts for as much as 95% or more of the product cost ratio, meaning that raw material price fluctuations directly determine the company’s profitability.

In 2025, international silver prices saw an epic surge. London spot silver jumped from 29.4 USD per ounce at the start of the year to 72.0 USD per ounce at year-end, for a full-year increase of 144.8%, directly squeezing the profit margins of the photovoltaic paste business.

The annual report shows that the gross margin of the company’s photovoltaic material products was only 8.57%, down 2.05 percentage points year over year, significantly compressing the main business’s profit space. At the same time, the annual sales volume of photovoltaic conductive paste was 1,829.16 tons, down 10.23% year over year. With both volume and pricing under pressure, the photovoltaic main business has long fallen into a “selling more, earning less” predicament.

Even more concerning is that the company’s non-recurring net profit was 163 million yuan, still down 62.78% year over year. Even after excluding the impact of unusual items, main-business profitability has nearly been cut in half.

Quarterly performance further reveals the deterioration in operations: in the fourth quarter, operating revenue was 5.322 billion yuan—the highest single-quarter level for the year. But the net profit attributable to the parent was a loss of 306 million yuan. The single-quarter loss exceeded the company’s total loss for the whole year. Consecutive losses in the third and fourth quarters directly dragged down full-year performance. Net cash flow from operating activities was 668 million yuan, down 28.88% year over year. Cash flow growth slowed in parallel, and the quality of earnings deteriorated sharply.

Given the industry’s technological trend toward “de-silvering” and “less-silver,” although Tike Zongshi has deployed low-cost products such as high-copper paste, in the short term it is still difficult to reverse the main business’s profit weakness.

Competition in the photovoltaic industry continues to intensify, and raw material costs remain high. The company’s core main business has shifted from a high-quality track with stable profitability to a “hard business under thin margins.” Relying solely on growth in revenue scale cannot possibly cover up the harsh reality of profitability collapse, and it also plants major hidden risks for the company’s future operations.

Hedging turns into speculation; silver becomes a large loss

The core trigger behind Tike Zongshi’s massive loss in 2025 was not poor main-business operations, but the complete loss of control over its silver hedging and protection business. What started as risk control degenerated into financial speculation, ultimately resulting in losses of more than 400 million yuan in non-recurring profit and loss, becoming the “main culprit” dragging down the company’s full-year performance.

The company’s annual report explicitly discloses that the impact of non-recurring items on net profit attributable to the parent was as much as -440 million yuan. Among them, losses from fair-value changes in silver futures and leasing businesses, as well as investment losses, account for an overwhelming share. The losses from related financial operations directly swallowed up all the profits from the main business.

According to normal business logic, when photovoltaic paste companies carry out silver hedging, the original intent is to lock in raw-material purchase costs and hedge against the risk of silver price fluctuations. Compliant hedging should follow the principle of “opposite directions between spot and futures, with scale matched,” to achieve risk hedging.

But Tike Zongshi completely deviated from the intent of hedging. In the period of one-way, sharp silver price increases in 2025, it not only failed to hedge the risk of rising spot costs by going long futures. Instead, it took the opposite approach: simultaneously opened short positions in silver futures and also carried out silver leasing, forming a speculative layout of two-directional shorting, fundamentally violating the core principle of hedging and protecting against risk.

Financial statement data show that within the company’s non-recurring profit and loss, the fair-value change gains/losses related to financial assets and liabilities, plus disposal gains/losses, totaled 641 million yuan. Of this, investment income was -272 million yuan, and losses from fair-value changes were -411 million yuan. The huge losses all came from the reverse-position operations in silver futures and leasing businesses.

In the fourth quarter of 2025, silver prices accelerated their push to the top, with an increase of about 53% in that single quarter. Coincidentally, during this very period, Tike Zongshi substantially expanded its trading scale: in October 2025, the company increased the silver futures margin limit from 100 million yuan to 200 million yuan. After the authorized limit was doubled, management increased the intensity of shorting at the peak of the silver price surge. This ultimately led to a single-quarter huge loss of more than 300 million yuan—an apt description of “a big gamble against the trend.”

The silver leasing business also aggravated losses. The company borrowed physical silver to conduct leasing, and at maturity it had to return the same quantity of silver. After the surge in silver prices, the cost to return increased sharply, forming “two-directional losses” together with the losses from short positions in futures.

Comparing with peers and similar companies: the hedging ratio for gold jewelry companies is usually controlled at 50%-90%, achieving relatively steady risk hedging. But Tike Zongshi had no effective hedging—its strategy was essentially one-way shorting. In essence, it abandoned risk control and instead carried out high-risk financial speculation, placing the overall interests of the listed company under the risk of massive price volatility, fully violating the bottom line of prudent operation for listed companies.

Large lawsuits hanging overhead

Governance loopholes hidden in plain sight

Besides the massive loss and hedging speculation, Tike Zongshi is also entangled in large patent litigation, faces questions about related-party transactions, and has governance mechanisms that are not standardized—multiple governance problems with continuously emerging potential risks, further shaking the company’s operational foundation.

The company and its subsidiary, Zhejiang Suote, are currently involved in three patent infringement lawsuits. The defendants include multiple peer companies such as Juhé Materials, Riyu Photovoltaics, Jingyin New Materials, and Guangda Electronics. The claim amount for each individual case is as high as 200 million yuan, totaling 600 million yuan. The progress of the lawsuits directly affects the company’s future operations and cash flows.

These patent lawsuits stem from patents related to the former DuPont Solamet business acquired by Zhejiang Suote. Tike Zongshi attempted to consolidate its position in the industry and squeeze competitors through patent lawsuits. But if it loses the lawsuits, the company would not only be unable to obtain large compensation, but also would have to bear large litigation costs, and may even face risks of disputes over patent ownership. Even if it wins, disputes arising from malicious competition in the industry could affect the company’s brand reputation. At the same time, whether the large claim amounts can be executed smoothly remains highly uncertain, and it cannot truly make up for the losses caused by silver speculation.

Governance-level loopholes are even more prominent: questions remain about the reasonableness of related-party transactions. In 2025, Tike Zongshi acquired 60% of the equity of Zhejiang Suote. In that year, Suote realized net profit of 98.0546 million yuan, exceeding the performance commitment. It also became Tike Zongshi’s second-largest customer, with annual procurement totaling 2.348 billion yuan. The procurement mainly involved silver powder.

Tike Zongshi claims that centralized procurement of silver powder for reselling to Suote is to secure favorable conditions. But within the same group, the parent company suffered massive losses from silver speculation, while the subsidiary achieved steady profitability. Moreover, Suote did not participate in any silver hedging business. The operating strategy differences between the two are huge, and questions from the outside also arise regarding the fairness of the related-party transaction and the actual beneficiary of the silver leasing business.

In addition, the company’s approval process and risk-control mechanisms for financial derivatives are effectively a formality. Silver futures are high-risk financial derivatives, and listed companies should strictly control transaction scale and risk. Yet Tike Zongshi’s management unilaterally expanded transaction limits. During the phase when silver price fluctuations were most intense, it loosened investment permissions and did not establish an effective risk stop-loss mechanism, ultimately leading to huge losses.

Meanwhile, the company blindly expanded its storage business as a second main line, repeatedly acquiring Kongmeng Holding and Jiangsu Jingkai. Although this led to a surge in revenue in the short term, cross-industry operations lack core technical capabilities and operating experience. Questions remain about future integration and earnings sustainability, further diverting company resources and increasing operational risks.

In 2025, Tike Zongshi revealed multiple deep wounds in its operations and governance with a massive loss annual report: the photovoltaic main business faced continuous profit pressure; silver hedging and protection shifted from risk hedging into financial speculation; large patent lawsuits remained unresolved; and governance loopholes frequently appeared—completely departing from the core of prudent operations for an entity manufacturing business.

Although the company is hoping that its storage business will reverse the downturn and build a second growth curve, the uncertainty of the cross-industry layout is extremely high, and it cannot quickly make up for the current performance shortfall.

For listed companies, standing on the main business and strictly controlling risk is the operating bottom line. Tike Zongshi’s trend-chasing speculation and disregard for risk control not only harms the interests of all shareholders, but also serves as a warning to the industry.

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