Sungrow Power Supply

Business

Sungrow (阳光电源股份有限公司) makes power electronics for clean energy: solar inverters, energy storage systems, wind converters, EV drive and power electronics, chargers and hydrogen equipment. It also develops and builds solar and storage plants, and has started selling power equipment for AI data centres, including solid-state transformers (2026 interim report, pp. 11, 30).

Its storage products combine battery cells with its own power conversion systems in one cabinet. The PowerTitan 3.0 liquid-cooled system holds up to 12.5 MWh per cabinet in its largest version, and the PowerStack line targets commercial and industrial sites (pp. 14, 15). In the first half of 2026 it also launched a modular PCS range of 3.45 MW to 12.5 MW that the company says works with lithium, sodium, flow batteries, flywheels and supercapacitors (p. 30).

Results in the first half of 2026

• Revenue fell 28.99% to ¥30.91bn and net profit attributable to shareholders fell 32.01% to ¥5.26bn. The company blames the lower revenue; gross margin rose 1.56 points to 35.92% on a better product mix (p. 29).
• Storage systems brought in ¥15.46bn, down 13.18%, and became half of all revenue, up from 40.89%. Solar inverters and other power conversion equipment were ¥12.39bn, down 19.17%. Plant development revenue fell 85.02% to ¥1.26bn (p. 35).
• Revenue in mainland China fell 54.71% to ¥8.22bn, while overseas revenue fell 10.59% to ¥22.69bn, 73.40% of the total (p. 35).
• The company cites third-party data putting global lithium-ion storage installations at 140 GWh in the half, up 30%, while global solar installations fell 43% (p. 11).

Margins

The storage gross margin was 32.43%, down 7.49 points on a year earlier, while the solar inverter margin rose 6.98 points to 42.72% (p. 34). Even after the fall, storage earns more at Sungrow than at the cell makers that supply the industry: CATL's storage battery margin was 23.96% in the same half.

Our view: Sungrow's storage margin rests on selling abroad. With almost three quarters of revenue overseas and the main purchased input being cells, its margin is exposed to export policy and trade barriers more than to cell prices.

The company's own caveats

• Trade and tax. It warns that some countries may add tariffs or local-content requirements on Chinese clean-energy products, and that the lower export VAT rebate on batteries and a consumption tax put pressure on its margins (p. 41).
• Competition. It says many companies are entering storage, so capacity is growing fast and prices keep falling (p. 42).
• Inputs. Its main purchases are cells, reactors, heat sinks and containers, whose costs follow lithium, copper and aluminium prices (p. 42).
• Receivables. It notes large receivables, partly from plant development projects (p. 42).