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According to reports from the Financial Association on April 25 (Reporter Liu Mengran), since 2020, Sungrow Power Supply (300274.SZ) has seen its annual revenue grow in single digits for the first time, as the high growth dividends from photovoltaic demand are weakening. The company cites institutional data showing that the Power Inverter shipments have ranked first globally for several consecutive years, and the total installed capacity of energy storage systems is also the highest worldwide.

The latest disclosed Earnings Reports show that the company achieved a revenue of 77.857 billion yuan in 2024, a year-on-year increase of 7.76%; the Net income attributable to the shareholders of the listed company was 11.036 billion yuan, an increase of 16.92% year-on-year. In 2024, Sungrow Power Supply's global shipping volume of photovoltaic Power Inverters reached 147 GW, and the global shipping volume of energy storage systems reached 28 GWh.

However, the company’s performance could not continue the past high growth trend. From 2020 to 2023, the company achieved revenues of 19.29 billion yuan, 24.14 billion yuan, 40.26 billion yuan, and 72.25 billion yuan respectively. In the previous two years (2022 and 2023), the company’s revenue growth rates reached 66.79% and 79.47% respectively.

In terms of Net income, despite the overall photovoltaic industry facing stage-based supply and demand imbalances, the inverter sector serves as a 'safe haven' during the photovoltaic downturn. In 2022 and 2023, the company achieved Net incomes of 3.593 billion yuan and 9.44 billion yuan respectively, with year-on-year increases of 127.04% and 162.69%.

In terms of gross margin, for the 2024 financial year, the gross margin in the photovoltaic industry for the company was 27.21%, and in the energy storage industry, it was 36.69%, representing an increase of 1.73 and 4.07 percentage points respectively compared to the previous year. However, when looking at individual products, the gross margin for the company’s Power Inverters and other electrical electronic conversion devices was 30.90%, which is a decrease of 1.94 percentage points compared to the same period last year.

The overseas market has been a key focus for Sungrow Power Supply in recent years, but in 2024, it also experienced significant slowing growth. Previously, benefiting from rapid growth in overseas shipments, the company’s overseas sales revenue increased from 9.177 billion yuan in 2021 to 33.369 billion yuan in 2023, with a compound annual growth rate of 90.69%.

However, by 2024, the sales amount of Sungrow Power Supply in overseas markets is expected to be 36.294 billion yuan, which is an increase of only 8.76% year-on-year. In the previous year, the revenue growth rate for this part reached 75.05%.

Sungrow Power Supply has stated that gaining a high share in overseas markets is crucial for the company's long-term high-quality growth. In the past year, Sungrow Power Supply obtained multiple GWh-level substantial orders in core global energy storage markets such as the Middle East, United Kingdom, Australia, and the Philippines.

The company previously stated during investor research that profitability varies significantly across different markets. The main factors affecting profitability are related to value contribution; markets like Europe and the United States have a better return on investment, and customers have very high requirements for energy storage systems, focusing more on whether energy storage can be connected to the grid on time and can operate stably in the long term. Correspondingly, the barriers are also high.

Sungrow Power Supply believes that the competitive landscape in the European and American markets is relatively stable, and profitability is expected to be better in the future. In the domestic market, however, the investment return mechanism for new energy matching storage is still not perfect, customers are relatively sensitive to energy storage product prices, competition is also very fierce, market prices are low, and profitability is poor.

It is worth mentioning that the company is planning to expand its overseas production base. Last October, the company launched an overseas issuance of Global Depositary Receipts (GDR) to add domestic basic A-shares, and the raised funds will be used for energy storage equipment manufacturing projects, the expansion of overseas inverter equipment and energy storage product projects, digital enhancement projects, and the construction of the Nanjing R&D center.

In terms of the domestic market, in the first quarter of this year, benefiting from the new new energy policy leading to a rush of installations, the newly added photovoltaic installed capacity nationwide reached 59.71 GW, an increase of 13.97 GW compared to the same period last year, with a growth rate of over 30%. Benefiting from this, Sungrow Power Supply once again achieved significant growth on top of last year's high base, achieving revenue of 19.036 billion yuan in Q1, a year-on-year increase of 50.92% (adjusted); the net income attributable to shareholders was 3.826 billion yuan, a year-on-year increase of 82.52%.

However, for the newly added photovoltaic installations this year, the industry mainly holds a conservative outlook. According to forecasts from the China Photovoltaic Industry Association at the beginning of this year, it is predicted that by 2025, the newly added photovoltaic installed capacity in China will reach 215-255 GW. In 2024, the newly added photovoltaic installed capacity in China is expected to be 277.57 GW, a year-on-year increase of 28.3%. Based on this calculation, the new installed capacity of photovoltaic in China this year may decline year-on-year.