Energy Storage Systems

What it is

A battery energy storage system packs battery cells into modules and racks, adds a battery management system (BMS), a power conversion system, cooling, fire protection and an energy management system (EMS), and ships the result as a container or cabinet. HyperStrong describes integration as combining these parts so the system manages itself internally and responds to the grid as one unit (2026 interim report, p. 25).

Systems keep getting larger. Sungrow's PowerTitan 3.0 holds up to 12.5 MWh in one cabinet, against 5 MWh in a 20-foot container for its previous generation (Sungrow 2026 interim report, p. 15).

How big the market is

• Sungrow cites third-party data putting global lithium-ion storage installations at 140 GWh in the first half of 2026, up 30% (Sungrow p. 11).
• CATL cites SMM putting global storage cell shipments at about 486 GWh, up 93% (CATL 2026 interim report, p. 10).

The two measure different things, cells shipped against systems installed, and come from different sources, so they cannot be compared directly.

Who builds them

Integrators come from three directions:

• Cell makers. CATL (宁德时代, 300750.SZ) sells cells, cabinets, containers and integrated systems. Its storage revenue was ¥53.26bn in the half, up 87.54%, and citing ICCSino it says it ranked first in global storage battery shipments (CATL pp. 10, 11, 16).
• Power electronics makers. Sungrow (阳光电源, 300274.SZ) builds its own PCS into its systems. Storage systems were ¥15.46bn, half of its revenue (Sungrow p. 35).
• Specialist integrators. HyperStrong (海博思创, 688411.SH) buys cells and PCS and adds its own BMS, EMS and integration. Citing the China Electricity Council, it says it ranked first in China by installed capacity of operating storage stations at the end of 2025. Its revenue rose 39.23% to ¥6.30bn (HyperStrong pp. 8, 17, 30).

Margins: who keeps the value

• Sungrow storage systems: 32.43%, down 7.49 points (Sungrow p. 34).
• CATL storage battery systems: 23.96% (CATL p. 16).
• HyperStrong, whole company: about 21.5% (our calculation from p. 31).
• EVE Energy storage batteries: 12.51% (EVE 2026 interim report, p. 19).

Our view: in storage the margin follows the customer relationship and the market, not ownership of the cell. Sungrow, selling mostly abroad, earns more on systems than CATL earns on storage cells, and both earn far more than EVE. The same pattern shows within companies: CATL earned 29.97% abroad against 21.16% in China (CATL p. 16).

What to watch

• Trade barriers. Sungrow and HyperStrong both warn of tariffs and local-content rules in the US and Europe, and Sungrow of the lower export VAT rebate on batteries (Sungrow p. 41; HyperStrong p. 31).
• Capacity payments in China. Independent grid-side storage can earn capacity payments from 2026, but only if it passes availability and performance tests (HyperStrong p. 31).
• Price pressure. Sungrow says new entrants are expanding capacity and prices keep falling (Sungrow p. 42).