Sungrow Power Supply's performance hit a new high last year, but net profit in the fourth quarter shrank by over 50% year-on-year.

Jiemian News reporter | Ma Yueran

The earnings report of photovoltaics and energy storage leader Sungrow Power Supply (300274.SZ) has been released, with a clear decline in net profit in the fourth quarter.

On the evening of March 31, Sungrow Power Supply disclosed its annual report. Last year, the company achieved revenue of 89.18B yuan, up 14.55%; it achieved net profit of 13.46B yuan, up 21.97%.

Judging by full-year net profit, this was Sungrow Power Supply’s best annual report ever.

But on a quarterly basis, the company’s net profit in the fourth quarter last year was only 1.58 billion yuan, the lowest single quarter since the third quarter of 2023. Compared with the third quarter of last year (4.15B yuan), it fell by nearly 62% quarter-over-quarter; year over year, it fell by about 54%.

Sungrow Power Supply did not specifically explain in its earnings report the reasons for the decline in fourth-quarter performance. Jiemian News noted that on the platform, some investors put forward an opinion that the surge in lithium carbonate prices in the fourth quarter of last year led to higher procurement costs for Sungrow Power Supply, compressing profits.

Last year, Sungrow Power Supply achieved a gross margin of 31.83%, an increase of 1.89 percentage points year over year. The company explained that the reasons included brand premiums, product innovation, and economies of scale.

Sungrow Power Supply is a leading company in photovoltaics and energy storage. Its main products include photovoltaic inverters, energy storage systems, wind power converters and transmission products, and new-energy investment and development, among others. In its annual report, the company also mentioned that it has laid out an AIDC power business, providing solid-state transformers (SST) and power solution offerings.

By industry, the share of energy storage in Sungrow Power Supply’s revenue continued to rise, increasing from 32.06% in 2024 to 41.81% last year. The share of revenue from the photovoltaic industry decreased from 61.53% in 2024 to 49.95%.

By product, in addition to the business whose revenue share fell last year, there is also new-energy investment and development. Its share fell to 18.57%, down 21.16 percentage points year over year. The gross margin decline in this segment was also the largest, dropping by nearly 5 percentage points to 14.5%, making it Sungrow Power Supply’s lowest-gross-margin business.

Last year, the company shipped 143 GW globally of photovoltaic inverters; 43 GWh globally of energy storage systems; and 63 GW globally of wind power converters.

Image source: Sungrow Power Supply annual report

The impact of the aforementioned lithium carbonate price on Sungrow Power Supply’s profit is not clearly reflected in the company’s earnings report gross margin. Last year, Sungrow Power Supply’s energy storage system gross margin was 36.49%, a slight year-over-year decline of 0.2 percentage points, and it still remained the product with the highest gross margin.

However, the company’s full-year energy storage industry raw material costs rose significantly. Last year, they reached 20.22B yuan, up 45.37% year over year.

Image source: Sungrow Power Supply annual report

Last year, Sungrow Power Supply increased its efforts to expand overseas business. Last year, its overseas revenue reached 53.99B yuan, accounting for 60.54% of total revenue, up 48.76% year over year.

The gross margin of the company’s overseas business was as high as 40.36%, nearly 22 percentage points higher than the market in mainland China.

Also worth noting is that last year the company’s net cash flow from investing activities was -3.27B yuan, down 69.86% year over year. The company explained this was due to a large increase in the amount of wealth management products being redeemed.

In addition, the company’s net cash flow from financing activities was -9.29B yuan, down 3,691.19% year over year. Sungrow Power Supply explained that it was because dividends increased, bank loan repayments increased, and repayments related to finance leases increased.

On the same day, Sungrow Power Supply also disclosed that it plans to use the share capital after excluding already repurchased shares from the repurchase-dedicated securities account as the base, and distribute cash dividends of 6.9 yuan (tax included) for every 10 shares to all shareholders, for a total cash dividend of 1.42 billion yuan.

In the first half of last year, Sungrow Power Supply paid cash dividends of 1.95 billion yuan.

As of the close on March 31, Sungrow Power Supply fell 4.04%, with a total market value of about 312.6 billion yuan.