Third-quarter 2026 reports from China’s photovoltaic encapsulation film industry have all been disclosed, putting both the recovery signals on income statements and diverging cash-flow trends in front of investors. Leader FOSTER (603806.SS) reported 1.131 billion yuan (approximately $169.5 million) in net profit attributable to shareholders for the first three quarters, up 64.5% year-on-year, standing alone among the four major film makers. Cybrid Technologies (603212.SS) and HIUV New Materials (688680.SS) sharply narrowed losses from a year earlier but have yet to exit the loss column, while Lushan New Materials (603051.SS) posted multi-fold net profit growth on the strength of its hot-melt adhesive business. Industry-wide profitability has recovered somewhat, but the earnings gap between companies is widening further.
On the revenue side, the four companies moved in different directions. FOSTER posted first-three-quarter revenue of 10.638 billion yuan (approximately $1.6 billion), down 9.76% year-on-year; Cybrid’s revenue was 1.92 billion yuan (approximately $287.7 million), down 5.86%; HIUV’s revenue was 960 million yuan (approximately $143.9 million), up 10.32%; and Lushan’s revenue was 1.197 billion yuan (approximately $179.4 million), up 2.52%. Profit performance was even more uneven: FOSTER’s non-recurring net profit rose 55.84% in tandem; Cybrid’s net loss attributable to shareholders was 19 million yuan (approximately $2.8 million), markedly narrower than the 117 million yuan (approximately $17.5 million) loss a year earlier; HIUV’s loss was 60 million yuan (approximately $9.0 million), versus a loss of 208 million yuan (approximately $31.2 million) a year earlier; and Lushan’s net profit attributable to shareholders was 61.9292 million yuan (approximately $9.3 million), up 430.04% year-on-year.
Note: Lushan New Materials’ net profit figure is converted from net profit attributable to shareholders of 61.9292 million yuan.
Behind the earnings divergence, cost and structure are the two main threads. HIUV said FOSTER’s larger scale gives it a cost advantage in raw material procurement, and the two companies differ in product mix and sales strategy; FOSTER has a high share of overseas business and higher gross margins, while HIUV’s overseas share is relatively low. Cybrid responded that the encapsulation film industry is highly concentrated and companies differ in operating scale, procurement costs, product mix and customer layout, so profitability varies during a cyclical adjustment; FOSTER has strong advantages in scale operations and cost control, while Cybrid has built its own competitiveness in original technology, differentiated products and international expansion.
Ren Lijun, a photovoltaic analyst at Shanghai Metals Market, said that amid the earlier U.S.-Iran conflict and swings in energy and chemical raw material prices, resin pellet prices rose markedly in the second quarter, and film makers passed through some costs via product price increases — the core reason for the first-half profit improvement.
Looking at the third quarter alone, however, film makers’ profitability generally fell quarter-on-quarter. FOSTER’s net profit attributable to shareholders was 312 million yuan (approximately $46.8 million) in the first quarter, rose to 530 million yuan (approximately $79.4 million) in the second and fell back to 289 million yuan (approximately $43.3 million) in the third; Cybrid lost 11.5326 million yuan (approximately $1.7 million) in the first quarter, earned 7.5504 million yuan (approximately $1.1 million) in the second and lost 14.7399 million yuan (approximately $2.2 million) again in the third; HIUV lost 38.0751 million yuan (approximately $5.7 million) in the first quarter, narrowed that to 9.4884 million yuan (approximately $1.4 million) in the second and widened slightly to 12.6761 million yuan (approximately $1.9 million) in the third. FOSTER’s gross margin for the quarter also fell to about 14.34% from 17.05% in the first half.
Cybrid gave three explanations for the third-quarter profit decline: first, price swings in major resin raw materials such as EVA and POE, combined with a time lag between film selling-price adjustments and cost pass-through, had a temporary impact on the photovoltaic materials business; second, downstream module demand adjusted during the period, with some module makers cutting production loads and utilization rates, slowing film procurement demand and order delivery; third, the company proactively carried out production-line technical upgrades and cost-reduction measures, with some lines temporarily halted or run at reduced loads in the third quarter, affecting output in the short term.
Ren Lijun said that after entering the third quarter, the midpoint of raw material and film prices declined somewhat, weighing on companies’ revenue through lower product selling prices; the spread between film and resin pellets narrowed further, and previously low-cost inventory was gradually consumed, weakening the inventory tailwind to earnings — together pushing gross margins down quarter-on-quarter. The analyst judged that the competitive landscape in the film sector has improved somewhat, with market share concentrating further among leaders such as FOSTER, but the industry as a whole still faces weak demand and heavy competitive pressure; film prices may come under gradual pressure in November and December as downstream demand weakens, and oil price swings could still disturb resin pellet costs through upstream chemical raw materials.
Notably, the income-statement recovery did not translate into cash flow. FOSTER’s net operating cash flow for the first three quarters was about 676 million yuan (approximately $101.3 million), up 4,744.85% year-on-year, but that change does not fully equate to a leap in the quality of sales collections — increased use of bank acceptance bills in procurement settlement and lower unit prices for resin purchases also boosted cash flow. HIUV’s net operating cash flow for the first three quarters was negative 101 million yuan (approximately $15.1 million), down 136.75% year-on-year; the company said growth in sales scale and higher inventory expanded cash outlays for procurement, while reduced discounting of notes received also pressured cash flow. Cybrid’s net operating cash flow was 36.7313 million yuan (approximately $5.5 million), down 78.82% year-on-year; Lushan’s was about 40.33 million yuan (approximately $6.0 million), down 74.63%.
On capacity exit, there is still little evidence of industry-wide coordinated production cuts or price-support arrangements; the exit cases the market focuses on are mostly individual companies cutting losses passively. Tianyang New Materials (603330.SS) gradually shut down its photovoltaic encapsulation film projects from late 2025 to early 2026; the company said in a filing that persistently low module prices, module makers’ reluctance to operate and intensified low-price competition had deepened losses, prompting it to divest the business; after exiting, it returned to profit in the first half of 2026 on the strength of its hot-melt adhesive main business. An August research note from CITIC Securities (600030.SS) argued that the photovoltaic industry’s supply-side “anti-involution” campaign is moving from self-discipline initiatives toward hard institutional constraints, with energy-efficiency standards and cost-accounting rules expected to accelerate the exit of outdated capacity. FOSTER’s 2025 annual report disclosed full-year photovoltaic encapsulation film shipments of about 2.810 billion square meters, with global market share steady above 50%, exceeding the combined share of the industry’s second- through fourth-largest players.
Facing cyclical swings in their main business, film makers are accelerating expansion into electronic materials, lithium-battery materials and other fields. FOSTER has proposed a dual-main-business structure of “photovoltaic materials + electronic materials”; in the first half of 2026, sales of photosensitive dry film rose 21.92% year-on-year to 389 million yuan (approximately $58.3 million) in revenue, up 19.69%; aluminum-plastic film sales volume was 8.6145 million square meters, up 29.38%, with revenue of 83.4966 million yuan (approximately $12.5 million), up 29.62%. Cybrid’s non-photovoltaic main business revenue in the third quarter was about 285 million yuan (approximately $42.7 million), up 44.9% year-on-year and accounting for more than 40% of total revenue, of which new energy and power electronics materials brought in 240 million yuan (approximately $36.0 million), up 38.55%, and semiconductor materials revenue rose 163.11% year-on-year. Overseas business has also become a profit pillar: Cybrid’s overseas film business gross margin is about 7 percentage points higher than in China, first-three-quarter overseas film revenue rose about 25% year-on-year and accounted for nearly 40% of film business revenue, up about 13 percentage points from a year earlier, with third-quarter overseas revenue up more than 50% year-on-year.
Across the supply chain, upstream main-chain companies remain in the loss column. Tongwei (600438.SS) posted a third-quarter net loss attributable to shareholders of about 1.639 billion yuan (approximately $245.6 million), widening 420.80% year-on-year but narrowing 38.71% quarter-on-quarter; LONGi Green Energy (601012.SS) had a quarterly net loss of about 1.029 billion yuan (approximately $154.2 million), widening 23.38% year-on-year but narrowing 41.66% quarter-on-quarter; Daqo New Energy (688303.SS) had a quarterly net loss of about 411 million yuan (approximately $61.6 million), widening 659.14% year-on-year but narrowing 48.27% quarter-on-quarter. It will still take time to work off the supply-demand imbalance.
Overall, the current stabilization in the film segment is the combined result of changes in raw material costs, differences in corporate operating strategies and individual passive exits. With revenue performance diverging, some companies’ operating cash flow under pressure and losses in the main supply chain not yet reversed, the profit recovery in the film segment is not enough to prove that China’s entire photovoltaic supply chain has emerged from supply-demand imbalance, and the gap in earnings resilience between leading and second- and third-tier companies is expected to persist.
The news and data on this website are for reference only and do not constitute investment advice or an offer to buy or sell. Information is sourced from exchanges and public sources, and may be delayed, interrupted, or updated. While we strive for accuracy, we do not guarantee timeliness, correctness, or completeness. Content may include external links for which we are not responsible. By using this site, you agree that we and our partners are not liable for any losses. Investment carries full responsibility; please carefully assess risks and consult professionals. If there are errors in the content, please contact us for correction.

source