(Yicai) Aug. 26 -- Earnings at TCL Zhonghuan Renewable Energy Technology, the world’s second-largest supplier of monocrystalline silicon wafers for solar cells, entered the red in the first half of the year after prices of the wafers nearly halved.

The net loss was CNY3.1 billion (USD435.5 million) in the six months ended June 30, compared with a net profit of CNY4.54 billion a year earlier, the Tianjin-based firm’s semi-annual financial report showed on Aug. 23.  Revenue tumbled 54 percent to CNY16.2 billion (USD2.3 billion).

TCL Zhonghuan attributed its worst first-half earnings since going public in 2007 to an imbalance in supply and demand in the solar industry that led to an irrational price war. The company has lost money in the past three quarters, with the nine-month total amounting to CNY5.8 billion.

First-half income at its silicon wafer business plunged 61 percent to CNY10.4 billion, as the gross profit margin slumped to minus 9.3 percent, down from 24.9 percent. It was TCL Zhonghuan’s only main business with a negative GPM.

Meanwhile, revenue from the firm’s solar panel business sank 47 percent to CNY2.8 billion in period, with a GPM of 0.9 percent, down from 12.2 percent.

TCL Zhonghuan’s inventory reached a total value of CNY8.2 billion as of June 30, up CNY752 million (USD105.5 million) from March 31.

Shares of TCL Zhonghuan [SHE: 002129] closed 2.4 percent higher at CNY7.57 (USD1.06) each today. The broader Shenzhen stock market gained 0.2 percent. So far this year, TCL Zhonghuan’s stock has roughly halved in value.

Northbound funds -- international investments that flow into China’s stock markets, typically through the Hong Kong Stock Connect programs -- pared their holdings of TCL Zhonghuan by 23.1 million shares in the second quarter and more than 90 million shares in the first half. Moreover, more than 400 fund companies pulled their investments in the firm, which had only 29 investors as of June 30.

Editor: Futura Costaglione