Shunfeng pointed squarely at China’s large but troubled solar market to explain its profit decline, which contrasted with the Hong Kong-listed company’s 31% jump in first-half revenue, to 4.61bn yuan.

Shunfeng – which owns a variety of renewables business around the world, including Suntech and Suniva – posted sharply higher shipments of PV cells and modules during the first half of the year. Electricity sales from its portfolio of grid-connected solar projects in China also rose.

But the company’s bottom line was dragged down by the challenges within China’s domestic solar market, which have started impacting other markets by forcing Chinese PV suppliers to push more of their inventory abroad.

A range of top-tier Chinese PV companies, including industry leader Trina Solar and JA Solar, have recently warned investors of an impending slowdown in the Chinese market.

China’s problems boil down to two issues, Shunfeng says. First are the “significant” delays many developers are seeing in collecting feed-in tariff subsidies from the government for solar plants that are already up and running.

As of mid-2016, Shunfeng’s subsidiaries were owed 1.48bn yuan – or $220m – in back subsidies, the company claims.

Second, existing projects in western China are seeing their generation curtailed, due to a lack of adequate transmission infrastructure. Recent statistics show that the grid curtailment rate in five provinces in northwestern China have reached nearly 20%, Shunfeng says.

Shunfeng was also hit by losses at Suniva, the US-based cell and module manufacturer it acquired last year.

Shares of Shunfeng are down 47% in the year to date.

Still, the company paints an optimistic picture for the renewables business, including its own unique stable of clean-energy units.

Rather than developing more big solar projects in-house, as it previously planned to do, Shunfeng is transitioning to a model focused on offering EPC and O&M services for other developers.

Meteocontrol, an solar O&M specialist Shunfeng bought as part of its 2014 acquisition of Germany’s S.A.G. Solarstrom, continues to perform well, with a client base that now spans 41,000 power plants worldwide with 12GW of generating capacity.

Although Shunfeng signaled this spring that it may sell its solar manufacturing assets, in its latest financial report the company specifically says it intends to "expand" its manufacturing activities in the coming quarters.  

China’s solar market is expected to recover eventually, perhaps in late 2017, and Shunfeng notes that an “increasing number of enterprises and investors” are piling into the market.