GCL Technology reported a challenging QQ4 2024, with revenue of 3.117 billion CNY and a negative gross margin of -31.4%, culminating in a net loss of 1.635 billion CNY and an EPS of -0.0619. The quarter underscores a broader profitability headwind driven by elevated cost of revenue relative to sales and continued deleveraging pressures despite positive operating cash flow. On a YoY basis, revenue declined by 51.1% and EBITDA deteriorated meaningfully, while QoQ dynamics were largely flat in the quarter-to-quarter comparisons provided. The firm maintains a substantial asset base and a pragmatic cash flow trajectory in operating activities, but its balance sheet remains heavily levered, with net debt of approximately 13.92 billion CNY and negative free cash flow of about 633 million CNY.
Looking ahead, the company faces a delicate balancing act: sustain and optimize its Solar Material, Solar Farm, and New Energy segments while pursuing margin recovery and debt reduction. Near-term catalysts include stabilisation of polysilicon/wafer cost structures and improved utilisation of solar assets, but execution risk remains given elevated working capital requirements and long-dated debt maturities. Investors should monitor cash conversion, deleveraging progress, and any strategic actions to accelerate profitability, including potential asset optimization or capex discipline in the next reporting cycles.