Kelu Electronics: The Difficult Comeback of a "Struggling Student"

After Kangkon New Energy, which saw a fivefold surge in performance, Concarbon today once again turns its attention to another新能源 company under the Midea Group’s umbrella—KELD Electronics.

Concarbon has been following KELD Electronics for a long time. The company began as a smart electric meter equipment provider and gradually developed into an energy systems integration service provider. As early as 2009, it had already moved into energy storage, so it can be considered a veteran新能源 player in both the energy storage and systems integration industries. In Concarbon’s past impression of the company, it appears to be an enterprise that once had plenty of talent, but “got up early and caught up late”—it carried a heavy burden of history and ended up in trouble (see “KELD Electronics’ confidence depends on Midea Group’s patience”). However, in the past 2025, this “poor student” has already delivered a performance that looks increasingly solid.

It seems that disaster in the fourth-quarter results has become a routine operation for KELD Electronics. The company’s just-released 2025 annual report shows that in Q4, KELD Electronics incurred a loss of RMB 388 million. Dragged down by this quarterly performance, the company again fell into losses in 2025.

Even so, there are encouraging changes despite the loss: the company’s full-year operating revenue was RMB 6.31 billion, up 42.41% year over year; net profit loss was RMB 156 million, representing a year-over-year reduction in losses of 66.33%!

01

KELD Electronics, which has given Midea Group a headache, has finally changed

Even for a powerhouse like Midea Group, it is not easy to pull KELD Electronics—an enterprise deeply stuck in operational and financial mud—back onto the right track and return it to profitability. This requires a large investment of time and effort.

Whether it can do well in the energy storage business, especially large-scale energy storage, is the key to whether KELD Electronics can turn losses into profits in the future. Meanwhile, KELD Electronics’ improvement in operations is also an important lever for Midea Group to implement its “integrated energy solution provider” strategy.

2025 is already the third year since Midea Group took control of KELD Electronics—In June 2023, Midea Group became the controlling shareholder of KELD Electronics through a private placement of additional shares. So how does the “poor student’s” 2025 performance fare, exactly?

KELD is a company with some history and has created a number of “firsts.” Precisely because it once was glorious and later found itself in a string of bad turns and huge losses, it is especially regrettable. When a top performer turns worse, that is easy enough. But surviving a crisis and even creating glory again is far rarer. Now, KELD is gradually giving investors a glimpse of hope.

Judging from the operating performance disclosed in the company’s 2025 annual report, KELD Electronics managed to reduce losses for the full year, but it has not yet gotten out of the loss-making state. Still, Midea Group is very likely to recognize KELD Electronics’ 2025 performance.

In terms of the equity incentive performance evaluation criteria, KELD Electronics has already achieved its 2025 assessment targets. The equity incentive plan released by the company at the end of 2024 clearly set out the assessment requirements: 2025 operating revenue must grow by no less than 43% compared with 2023, and assessment net profit must be no less than RMB 20M. Among them, “assessment net profit” refers to the net profit attributable to shareholders of the listed company in the audited consolidated financial statements of the listed company, excluding profit or loss from disposal of long-term assets formed before the performance evaluation year, impairment losses, and related non-operating gains and losses—i.e., after stripping out KELD Electronics’ historical burdens, achieving profitability of RMB 20M means it meets the target.

Based on KELD Electronics’ actual completion, the company’s 2025 revenue was RMB 6.31 billion, up 50.2% versus 2023, exceeding the 43% revenue growth target. Its assessment net profit also reached the equity incentive exercise threshold, completing the assessment smoothly.

Since Midea Group took over, KELD Electronics has continued to divest non-core assets and simplify its business structure. At present, the company’s core businesses are only two segments: smart power grids and energy storage. The operating performance of these two businesses directly determines KELD Electronics’ development outlook.

It is clear that the smart power grid business has now entered a mature development stage. Revenue is stable but not growing rapidly, so it is no longer the core development focus for KELD Electronics, nor is it the key concern of the capital market. In 2025, KELD Electronics’ smart power grid segment revenue decreased by 9.17% compared with 2024, further confirming the business’s current state.

What really matters is the energy storage business, which is riding the wind. In 2025, energy storage climbed from behind and surpassed others; for the first time it became KELD Electronics’ largest business, with a revenue contribution ratio as high as 60.17%. Full-year revenue from KELD Electronics’ energy storage business exceeded RMB 3.8B, increasing by more than 160.74% year over year—far higher than the industry’s average growth rate.

KELD Electronics’ management team was able to meet the performance net profit target for the equity incentives last year, with the energy storage segment as the main driver. The key, however, is that the energy storage business’s rapid growth also makes the company an important investment target in the capital market’s energy storage sector. In 2025, the company’s share price rose significantly.

Of course, this achievement is on the one hand thanks to the strong global energy storage market backdrop and the continued surge in industry demand. On the other hand, it is also due to KELD Electronics’ own efforts: as the energy storage business grows quickly, it has been running at full acceleration. In 2025, the company signed new energy storage projects with total contracted capacity of about 11.6 GWh, and energy storage system shipments of about 6.9 GWh.

In terms of capacity, KELD Electronics’ Yichun 12 GWh energy storage capacity has consistently been sold out and fully utilized. The company’s energy storage production base in Indonesia was initially planned with capacity of 3 GWh, with plans for official commissioning in 2026.

KELD Electronics states that going forward, it will adjust its capacity planning in a timely manner according to the needs of business development and market expansion, to provide sufficient capacity support for the sustained expansion of global operations.

02

Energy storage: the joys and the worries—high revenue, low gross margin

Whether it can ride the wind and whether it can make money are two completely different things. The overseas market is booming with orders, but many energy storage companies face the development dilemma of “high revenue, low gross margin.”

In 2025, the global energy storage market exploded. From a macro perspective:

In China, the energy storage market is entering a wave of market-oriented development. Because the penetration rate of new energy power generation has reached a certain stage, demand for energy storage to provide grid balancing resources is urgent. In 2025, local governments in China have issued new energy storage expansion plans in quick succession, driving rapid growth in the market.

In the United States, grid upgrades and the utilization of renewable energy bring rigid demand for energy storage. The surge in electricity demand from AI data centers further boosts demand.

In Europe, governments across countries are accelerating efforts to address grid instability. Energy storage receives policy support, while spot peak-to-valley price spreads expand, lifting project returns.

In emerging markets, large-scale potential for energy storage is greater in regions such as the Middle East, South Asia, and South America. It seems that both the domestic and international energy storage markets are hot and growing quickly.

In fact, market environments differ significantly by region. In China, due to low-price and vicious competition, companies often barely make money—or even operate at a loss while “buying attention.” In the Middle East and Europe, profits are smaller. Only when entering the U.S. market, which has a higher entry threshold, are gross margins very attractive.

This is also an important reason why investors have valued companies like Canadian Solar (Trina?) and Sungrow Power Supply.

KELD Electronics’ energy storage business has seen rapid growth in shipment volume, but its gross margin is relatively low.

According to the announcement: the gross margin of KELD Electronics’ energy storage business in the first half of 2025 was 32.95%; the company’s full-year gross margin was 17.0%.

Based on this, the gross margin in the second half of 2025 would be only 8.91%. That means KELD Electronics’ energy storage business in Q4 2025 is very likely to be loss-making.

From KELD Electronics’ 2025 annual report

As an investor, judging a company in the energy storage sector cannot be overly isolated and one-sided. You need to look at the company’s stage of business development and its position within the industry.

For KELD Electronics, there are two key areas to evaluate:

First, besides looking at capacity and orders, also look at the structure of the orders: which market the orders come from.

In early this year, there were rumors in the market that KELD Electronics had secured a massive 10 GWh order in North America, but the company denied the claim. Still, these rumors and guesses are not completely without basis.

KELD Electronics has had a foothold in the U.S. market for years, including through establishing a U.S. energy storage subsidiary and building a localized team. In 2024, the company’s wholly owned subsidiary CL Energy Storage Corporation signed a battery energy storage system supply contract with a customer in the U.S. to provide the customer with a total of about 800 MWh of containerized battery energy storage systems—this was the first commercial application of the company’s new-generation energy storage system Aqua-C2.5……

However, in 2025, when the energy storage market was in full swing, KELD Electronics had not announced that it had obtained a large energy storage order in North America. This is not quite in line with what one would expect.

If KELD Electronics can achieve a breakthrough in high-gross-margin markets in the future, it will open the door to high profit growth. If the company’s focus remains locked in domestic large-scale energy storage “involution” markets, then performance can only continue to be mediocre.

Second, examine how increases in cell prices transmit to the energy storage product prices, and how well energy storage companies control core raw materials for the cells.

The sharp decline in energy storage gross margin in the second half of 2025 was mainly due to increases in raw material prices, especially cell prices.

Starting in the second half of 2025, driven by strong downstream demand, lithium iron phosphate material and cells entered a new round of price increases. Several energy storage companies were reported to be facing tight cell supply and delivery delays.

In a market environment where there is broadly a “cell shortage,” companies such as CATL, BYD, EVE, and Ruipu Lanjun generally do not accept orders from small customers. Even full prepayments cannot guarantee production scheduling. As a result, many small and medium integrators were forced to suspend production and push out orders.

KELD Electronics has also repeatedly been rumored to have suffered “cell supply cutoffs.” In an investor exchange meeting on November 20, 2025, KELD Electronics directly clarified: “The company maintains a good cooperation relationship with cell suppliers. It has signed fixed-quantity (locked volume) agreements, and at the same time ensures cell supply by expanding additional supply channels.”

One reason KELD Electronics became the starring character in “supply cutoff” rumors is that its cash flow situation is extremely tight. The market naturally would wonder whether it has sufficient funds to purchase cells when it is hard to obtain one.

03

Debt-to-asset ratio 95%! Midea Group helps in an emergency

How tight is KELD Electronics’ capital chain, exactly?

From financial reports over the years: KELD’s asset-liability ratio has long hovered around 90%. By the end of 2025, it even reached an astonishing 95%. This is far above the 70% warning line. The company’s annual interest expenses alone are as high as over RMB 7.87B, which has made partner customers generally worried about its operational stability. Without Midea Group’s endorsement, most cell manufacturers would likely have kept KELD Electronics out.

However, no matter how prestigious Midea Group is, it cannot change the rules for cell procurement. Starting from the third quarter of last year, cell companies’ requirements for customers became: 100% full prepayment + queuing + no delivery guarantee.

As a result, KELD Electronics’ scale of prepayment for accounts payable increased significantly. Prepayments totaled RMB 65.03 million at the beginning of the period and rose to RMB 101.86 million at period end. Among them, prepayments within one year increased from RMB 60.81 million to RMB 97.85 million.

This also directly led to pressure on the company’s operating cash flows. In the annual report, the company explained: “During the reporting period, net cash flows generated from operating activities decreased by RMB 668.02 million year over year. The main reason is that the shipment volume of the company’s energy storage products increased significantly, and certain upstream core raw material supplies were relatively tight. Purchase settlement and prepayment items accordingly increased, which led to an increase in payments for purchases on a year-over-year basis, and an increase in cash outflows from operating activities on a year-over-year basis.”

From the 2025 annual report; KELD Electronics’ prepayments for accounts payable

According to its operating plan, KELD Electronics also needs to further increase investment in the energy storage sector. Then where will the money come from? How to address the extremely high debt-to-asset ratio?

Then it should keep selling assets—sell the large portion of assets that can be turned into cash most easily.

Now, the asset KELD Electronics plans to sell is the Smart Energy Industrial Park project.

On December 31, 2025, the company entered into an “Intent Agreement for Asset Acquisition for the KELD Guangming Smart Energy Industrial Park Project” with Shenzhen Guangming Science City Industrial Development Group Co., Ltd., China Science and Technology Development Institute Co., Ltd., and Midea Innovation Investment Co., Ltd. (collectively, the “acquirers”). The acquirers (or their designated entities) plan to jointly acquire the relevant assets that the company holds in the Guangming Smart Energy Industrial Park through a cash acquisition approach, including factory buildings, R&D and office premises, supporting apartments, and so on.

Notes:

① The Smart Energy Industrial Park project (Guangming Industrial Park) was provisionally transferred and capitalized in May 2023; as of the end of this reporting period, the final construction completion settlement had not yet been completed. ② At the end of 2025, according to the results of the first-instance civil judgment in the dispute case concerning the construction project contract with China Nanhai Engineering Co., Ltd., the original value of the Guangming Smart Energy Industrial Park was additionally adjusted.

This is a related-party transaction, and the buyer is precisely the major shareholder, Midea Group.

Now it is necessary to break down the cost and selling price of this asset, as well as its significance to KELD Electronics.

(1) At the end of 2025, KELD Electronics’ net assets were only RMB 356 million, with liabilities of RMB 8.27B and total assets of RMB 1.97B. The Smart Energy Industrial Park is one of KELD Electronics’ important assets.

(2) The all-invested cost of the KELD Guangming Smart Energy Industrial Park is nearly RMB 2.0 billion, including RMB 414 million for land acquisition in 2017 and about RMB 1.5 billion in construction investment.

The 2025 annual report shows: the project’s cumulative actual invested amount is RMB 1.974 billion.

(3) How much can it be sold for now?

The company has not formally announced it. It only stated that the acquirers will complete payment before March 2026, and the remaining portion will be settled by the end of 2027. In any case, the company will receive some cash to tide KELD over in an emergency.

However, the market expects the Guangming energy storage capacity park to be priced between RMB 1.5 billion and RMB 1.8 billion. If that is true, then this is a typical discounted sale.

Epilogue

Through the transfer transaction of the Smart Energy Industrial Park, Midea Group can help KELD Electronics solve part of the capital problem. But the company also needs to pay a price—selling core assets at a discount and bearing asset disposal losses. However, because the debt-to-asset ratio is so high, even if KELD Electronics successfully sells the Smart Energy Industrial Park project, the effect of reducing its debt-to-asset ratio will not be very noticeable.

In any case, the cash flow brought by this asset disposal can effectively replenish working capital for operating activities such as cell procurement, ensure the normal operation of the energy storage business, and buy time for the sustained development of the company’s energy storage business.

If in 2026 KELD Electronics opens a new chapter in high-value energy storage markets, then Midea Group’s energy storage business will truly have developed.

Editing and Compilation: Zhi Tan

Welcome for comments and likes; for reposting, please contact the back office for authorization