A company called Xinyi Energy, which runs solar farms in China, is not making as much money as before. This is because there are too many solar farms and not enough electricity needed to power everything. So, some of the solar energy is wasted and not used. This makes it hard for Xinyi Energy to make a profit and the company's shares are not worth as much as before. Read from source...

1. Key points:
- Xinyi Energy is a solar farm operator that suffered a drop in net profit due to oversupply of solar power in China
- The company's revenue is mainly from electricity sales and subsidies, but the grid's limitation and depreciation expenses reduced its profitability
- The Chinese government has raised the allowable abandonment rate for solar power and shifted the purchasing system to a more market-oriented one, which reduces the guarantee of buying all the energy produced by renewable sources
- Xinyi Energy's shares have fallen and its dividend payout has shrunk, which may deter investors from the stock

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Article's Key Points:
- Xinyi Energy, a solar farm operator in China, reported a 25%-35% fall in net profit in the first half of 2024 due to oversupply of solar energy and limitations of the electric grid.
- The company's revenue is mainly from power generation, but lower electricity sales and higher depreciation expenses hurt its profitability.
- China's solar power capacity jumped 55% in 2023, leading to more waste capacity and a higher abandonment rate of solar power.
- The government has raised the maximum allowable abandonment rate for renewable energy plants to 10% and categorized renewable energy purchasing into two types: "guaranteed acquisition" and "market-oriented transactions."
- Xinyi Energy's shares have fallen sharply since its profit warning and trade at a high P/E ratio compared to its peers.