Key takeaway

The company maintained steady revenue growth in 2025, while profit also increased, although at a slightly slower pace than revenue growth, mainly due to relatively low gross margin in domestic business and expense-side disruptions. From the business structure perspective, photovoltaic inverters remained the main source of revenue, while the energy storage business maintained a relatively high proportion; by region, overseas revenue increased 78.14% YoY, and gross margin was significantly higher than that of the domestic market, making it the core driver of the company’s earnings growth and profit elasticity. The company’s subsequent growth drivers include rapid growth in overseas utility-scale photovoltaic orders, increased overseas PCS shipments, and continued recovery in residential energy storage demand following the US-Iran conflict.

Event

The company released its 2025 annual report, achieving revenue/net profit attributable to shareholders of the parent company/non-recurring net profit attributable to shareholders of the parent company of RMB5.63bn/RMB463mn/RMB448mn, up 17.95%/10.48%/8.72% YoY. The company released its 1Q26 report, achieving revenue/net profit attributable to shareholders of the parent company/non-recurring net profit attributable to shareholders of the parent company of RMB1.071bn/RMB98mn/RMB88mn, up 28.95%/11.57%/3.15% YoY.

Quick Take

Revenue maintained growth, with overseas solar and energy storage business contributing the main increment In 2025, the company recorded revenue of RMB5.63bn, up 17.95% YoY; net profit attributable to shareholders of the parent company was RMB463mn, up 10.48% YoY; non-recurring net profit attributable to shareholders of the parent company was RMB448mn, up 8.72% YoY. In 1Q26, the company recorded revenue of RMB1.071bn, up 28.95% YoY; net profit attributable to shareholders of the parent company was RMB98mn, up 11.57% YoY; non-recurring net profit attributable to shareholders of the parent company was RMB88mn, up 3.15% YoY. The company disclosed that 2025 earnings growth was mainly driven by growth in the overseas solar and energy storage business and increased overseas PCS shipments.

Risks:

1) Demand: Domestic ESS installation growth may not meet expectations, and the growth rate of new energy investments could slow down. Additionally, overseas ESS demand might fall short of expectations, and the progress of carbon neutrality abroad could decelerate.

2) Supply: The supply of power electronic components like IGBTs may be tight, and the localization process could be slower than expected. Additionally, prices and processing costs for metal raw materials such as copper, aluminum, and steel could rise.

3) Policies: Energy storage-related support policies may fall short of expectations; capacity tariff compensation standards may be lower than expected; the power spot market development may be slower than expected; The electricity peak-to-valley price difference might be lower than expected.

4) International situation: International trade barriers may deepen, obstructing exports. Requirements for localized production could increase, leading to higher costs. International conflicts might result in higher shipping costs and longer delivery times.

5) Market: Intensified competition could lead to lower-than-expected GPM and profitability for ESS battery manufacturers, integrators, and PCS suppliers. Companies might also face issues due to errors in their market competition strategies.