New Stock Preview | Sungrow Power Supply: Global Photovoltaic Inverter leader, business with high growth and increasing profits.

The photovoltaic inverter product has maintained a global leading output volume for ten consecutive years, and its market value has increased by more than 100% this year, with A-share leader Sungrow Power Supply (300274.SZ) finally moving towards the international capital market. It is reported that Sungrow Power Supply has submitted an application for listing on the main board of the Hong Kong Stock Exchange, with CICC as its exclusive sponsor. According to Frost Sullivan's analysis, based on the shipment volume in 2024, the company's market share of photovoltaic inverters globally is approximately 25.2%, and the shipment volume has maintained a global leading position for ten consecutive years. In addition, in the wind power converter sector, the company's global market share is as high as 31.4%, leading the second place by 11.8 percentage points. The company has established a comprehensive global network layout, with products and services sold to more than 100 countries and regions worldwide by June 30, 2025. The company's performance has shown steady growth, with a revenue scale of 77.704 billion yuan in 2024, a compound annual growth rate of 39.19% from 2022 to 2024, and a further growth of 40.3% in the first half of 2025. The profitability is also very strong, showing a continuing upward trend, with a net profit margin of 18% in the first half of the year, reaching a new high. So, what is the fundamental situation of Sungrow Power Supply? Let's delve into it further. Two core businesses with high growth and steadily increasing profitability Founded in 1997, Sungrow Power Supply started with the photovoltaic inverter business and gradually expanded to cover the five major sectors of "light, wind, storage, hydrogen, and electricity." The company currently has three main core businesses, including electronics and power conversion equipment, energy storage systems, and new energy investment and development. In the first half of 2025, the company's three core business revenues accounted for 35.3%, 41%, and 19.3%, respectively, and the company also has other products such as smart energy operation and maintenance services, contributing 4.4% of the revenue. From 2022 to 2024, the performance of the electronic power conversion equipment business has been steady, with a slowdown in revenue growth but still at double-digit growth. The energy storage system business is the core growth engine, with high growth and a continuous increase in revenue share, while the revenue from new energy investment and development shows a fluctuating downward trend. In the first half of 2025, the revenue share of the three core businesses increased by 17%, 127.7%, and -6.2%, with the energy storage system revenue contributing to an 80% growth contribution. Specifically, the electronic power conversion equipment mainly includes photovoltaic inverters, wind power converters and transmission products, and new energy vehicle electronic control and power system products. The core product is the photovoltaic inverter, with product lines covering centralized inverters, modular inverters, string inverters, residential inverters, and micro inverters, serving various application scenarios from ground-based stations to residential and industrial stations. As of June 2025, its photovoltaic inverters have been sold to more than 100 countries and regions globally, maintaining a leading market share worldwide. The energy storage system is suitable for various AC or DC-coupled residential, commercial, and source-side scenarios. In 2022, the company launched the industry-leading PowerTitan and PowerStack liquid-cooled energy storage systems, and in 2025, it launched the breakthrough PowerTitan 3.0 energy storage system. The Plus system is the world's largest single-cabinet capacity and highest energy density lithium battery energy storage system, with a cumulative shipment volume of 70 GWh globally as of June 2025, leading the market. These two core businesses form the company's foundation, driving sustainable performance growth. Sungrow Power Supply's products cover more than 100 countries and regions worldwide. In the case of a slowdown in the domestic photovoltaic industry, the overseas market has grown rapidly, with revenue share increasing from 47.5% in 2022 to 58.4% in the first half of 2025, exceeding domestic revenue. The company focuses on direct sales, with direct sales revenue accounting for over 90%, and as of June 2025, it has established over 520 service outlets globally. The company's customer base is relatively diversified, with the top five customers accounting for 23.6% of revenue in the first half of 2025. With scale advantages and industry leadership, the company's profitability continues to rise. In terms of gross profit margin, it was 32.9% in the first half of 2025, up 0.8 percentage points year-on-year, compared to an increase of 12.5 percentage points from 2022. Looking at the business segments, the gross profit margin of the two core businesses has steadily increased, especially the energy storage system business, whose gross profit margin increased from 25.2% in 2022 to 41%, contributing to core gross profit. Furthermore, the company has maintained stable expenses. Historically, the management expense ratio is between 2-3%, the sales expense ratio is between 4-5.7%, and the financial expense ratio is between 0.4-0.6%. Thanks to the rising gross profit margin and stable expense ratios, Sungrow Power Supply's net profit margin continues to rise, reaching 18% in the first half of 2025, up 1.7 percentage points year-on-year and 8.8 percentage points from 2022, with an annualized shareholder ROE of 36.4%. With a solid leading position in the industry, Sungrow Power Supply's market is worth looking forward to From an industry perspective, driven by global low-carbon goals and energy structure adjustments, the global market for clean power conversion equipment maintains a high growth trend, with a market size of 724 billion US dollars in 2024 and a compound annual growth rate of 42.6% in the past five years. It is expected to reach 260.9 billion by 2030, with a compound annual growth rate of 23.8%. This is due to the continuous growth in global photovoltaic new installation capacity, which has a compound growth rate of 37.2% over the past five years. In the clean power conversion equipment market, the energy storage system industry has performed the best, with a compound annual growth rate of 88.5% from 2020 to 2024. It is expected to reach 105.1 billion US dollars by 2030, with a compound annual growth rate of 24.4%, accounting for 40.3% of the market. The photovoltaic inverter industry is also doing well, with a compound annual growth rate of 24.8%, expected to reach 43.2 billion US dollars by 2030, accounting for 16.56%. These two industries are the fundament of Sungrow Power Supply, providing it with opportunities for sustainable growth. Sungrow Power Supply's leading position in the industry is solid, especially in the photovoltaic inverter sector. With a highly concentrated market landscape, the top five companies accounted for 63.9% of the market share in 2024, with the company ranking first with a 25.2% market share, maintaining its industry-leading position for ten consecutive years. In addition, in the energy storage system industry, the company ranks second globally with an 11.9% market share, while the first place holds 13.3%. In addition to its scale advantages, the company's technological advantages are also evident, with a mature and comprehensive research and development system established in Hefei, Shanghai, Nanjing, Shenzhen, Germany, and the Netherlands. It has a research and development structure consisting of the Central Research Institute and various business unit research teams, with research and development staff accounting for 40%. As of June 2025, the company has applied for more than 10,500 patents, making it one of the few companies in the industry with multiple proprietary core technologies. The strong research and development system ensures that the company's products are always at the forefront of the industry. For example, in the field of photovoltaics, it has launched the world's first set of 2,000V high-voltage inverters and introduced the world's first modular inverter 1+X2.0; in the field of energy storage, it has launched the PowerTitan series products for large-scale energy storage power plants, and the PowerTitan series has been iterated to the 3.0 version, equipped with the world's first mass-produced 684Ah large power core. As a result, Sungrow Power Supply has strong customer demand and very high capacity utilization. The company has capacity distribution both domestically and overseas, with design capacities of 119GW for photovoltaic inverters and 28GWh for energy storage systems in China, and a design capacity of 50GW for photovoltaic inverters overseas. As seen in previous years, the capacity utilization rates of the two core businesses exceed 100%, reaching 114.8% and 127.6% in the first half of 2025, respectively. The company plans to globally expand its production capacity, which may benefit from the industry's development dividends and maintain sustained high performance. In conclusion, Sungrow Power Supply's fundamentals are outstanding. Its two core businesses continue to grow, with the energy storage system business showing rapid growth, driving strong performance. Both businesses have scale advantages, solid industry leadership, product technical advantages, cutting-edge products, capacity utilization rates exceeding 100%, and the need for expansion to meet market demand. The company's profitability is also steadily increasing, with a high shareholder return rate. This listing in Hong Kong is expected to attract the attention of ESG investors and long-term value investors with large funds, making it worth looking forward to.