Sungrow Power Supply experienced a decline in both quarterly revenue and net profit in Q4 of last year.

Caixin Media March 31 (Reporter: Liu Mengran) Weighed down by factors including lower photovoltaic industry revenue and declining gross margins in the energy storage business, the photovoltaic and energy storage leader Sunshine Power (300274.SZ), whose performance has been growing at a high rate in recent years, saw its net profit grow by only just over 20% year over year last year. The company plans to distribute cash dividends of RMB 6.90 per every 10 shares to all shareholders in 2025.

In an announcement released this evening, the company said that last year it achieved operating revenue of RMB 89.18B, up 14.55% year over year; net profit attributable to shareholders of listed companies was RMB 13.46B, up 21.97% year over year.

By quarter, in Q4 last year the company recorded operating revenue of RMB 22.78B and net profit attributable to shareholders of RMB 1.58B, with year-over-year declines of 18.37% and 54.02%, respectively. This marks the first time since Q4 2021 that both the company’s single-quarter revenue and net profit declined at the same time.

By business segment, as a dual-business leader spanning photovoltaic inverters and energy storage systems, the company’s energy storage business achieved revenue of RMB 37.29B last year, accounting for a further increased share of 41.81%; photovoltaic industry revenue was RMB 44.55B, accounting for 49.95%. In 2025, the company’s shipments of photovoltaic inverters were 143GW, a slight decrease versus the previous year (147GW); its global shipments of energy storage systems were 43GWh, up 53% year over year.

However, the company’s product gross margin shows divergence. The financial report indicates that the company’s last-year product gross margin was 31.83%, up 1.89% year over year. The company said this was mainly attributable to factors such as brand premium, product innovation, and scale effects. Among them, gross margin for power electronic conversion equipment such as photovoltaic inverters was 34.66% last year, up 3.76 percentage points year over year, while gross margin for energy storage systems was 36.49%, down 0.2 percentage points year over year. In addition, power station investment gross margin was 14.50%, down 4.9 percentage points year over year.

Regarding the decline in energy storage gross margin, an industry insider told Caixin Media’s reporter that although Sunshine Power still has advantages in high-gross-margin overseas markets, most of the company’s cell production is based on external procurement, so its costs are greatly affected by upstream price changes.

Public data shows that in the third quarter of last year, the price of lithium carbonate reversed in a V-shaped pattern, driving a significant increase in cell costs. A person from a cell company told Caixin Media’s reporter that typically, for every RMB 10k per ton increase in lithium carbonate, the corresponding cell cost increases by approximately RMB 0.006 per Wh. In early August last year, the lithium carbonate price started at around RMB 77k per ton and by the end of December it broke through the RMB 120k per ton level, with a cumulative increase of more than 50%. Combined with price changes of materials such as electrolytes and lithium hexafluorophosphate, the theoretical cell cost increase exceeded RMB 0.04 per Wh.

It should be noted that while the company’s performance has maintained rapid growth, its inventory scale has also remained at a relatively high level. As of December 31, 2025, in the company’s consolidated financial statements, the book balance of inventory was RMB 10k, inventory provision for impairment of RMB 77k, and the book value was RMB 120k.

According to the latest disclosed announcements, last year the company accrued combined credit impairment provisions and asset impairment provisions of about RMB 28.75B. Among them, the main items for asset impairment provisions included fixed assets, contract assets, inventory, and contract fulfillment costs, totaling RMB 1.49B in asset impairment provisions, as well as RMB 27.26B in credit impairment provisions.