Key takeaway

The company generated RMB6.240bn in energy storage system revenue in 1H26, maintaining rapid YoY growth. Overseas expansion, the deployment of high-value application scenarios, and the extension of full-lifecycle services jointly drove a 100.2% YoY increase in net profit attributable to shareholders of the parent company. Profitability also improved. Gross margin reached 22.7% in 2Q26, up 5.8 pcts YoY and 3.3 pcts QoQ. The gross margin of technical services was 66.2%, while the overseas gross margin was 28.3%, 7.5 pcts higher than the domestic gross margin, showing that benefits from an optimized business mix are beginning to materialize. Contract liabilities and inventories increased rapidly, reflecting strong project intake and stocking demand amid robust energy storage demand. The company is advancing toward becoming a global energy storage leader.

Event

The company released its 1H26 results, reporting revenue of RMB6.297bn, net profit attributable to shareholders of the parent company of RMB632mn, and net profit attributable to shareholders of the parent company excluding non-recurring gains and losses of RMB627mn, up 39.2%, 100.2%, and 141.5% YoY, respectively. In 2Q26, it reported revenue of RMB3.927bn, net profit attributable to shareholders of the parent company of RMB429mn, and net profit attributable to shareholders of the parent company excluding non-recurring gains and losses of RMB429mn, up 32.0%, 93.0%, and 136.8% YoY, and 65.7%, 110.4%, and 116.6% QoQ, respectively.

Quick Take

Energy storage system business expands, with both sales and profitability improving in 2Q26

Energy storage system revenue reached RMB6.240bn in 1H26, accounting for 99.1% of total revenue and remaining the company's core business. Technical service revenue was only RMB49mn, but its gross margin reached 66.2%, with the extension into full-lifecycle energy storage services beginning to generate incremental revenue. The company attributed its revenue growth to its global footprint, overseas business expansion, the deployment of high-value application scenarios, and progress in its integrated energy services strategy. Overall gross margin reached 21.5% in 1H26, up 3.9 pcts YoY. Gross margin reached 22.7% in 2Q26, up 5.8 pcts YoY and 3.3 pcts QoQ, while net margin attributable to shareholders of the parent company reached 10.9%, up 3.4 pcts YoY and 2.3 pcts QoQ.

Risks

1) Demand: Energy storage demand in China and overseas may fall short of expectations, and the pace of the energy transition may slow.

2) Supply side: Lithium price increases raising costs, or rapid price reductions causing a wait-and-see attitude downstream.

3) Policy: Overseas subsidy policies may fall short of expectations, and the implementation of market-oriented energy storage policies in China may be weaker than expected.

4) International situation: Intensified international trade barriers, export restrictions; increased costs due to heightened requirements for local production; disruptions in overseas transportation and increased freight costs due to international conflicts.

5) Market: Intensified competition may result in lower-than-expected GPM and profitability in ESS batteries, integrators, and PCS manufacturers.

6) Technology: Obstacles in new product R&D or product homogenization may weaken competitiveness.