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

Caixin News Service March 31 (Reporter: Liu Mengran) Due to factors including a decline in revenue in the photovoltaic industry and a drop in gross margin for the energy storage business, Sunlight Power, a leading “photovoltaic-plus-storage” company with sustained high growth in recent years (300274.SZ), saw its net profit grow by only just over 20% year over year last year. The company plans to distribute cash dividends of 6.90 yuan for every 10 shares to all shareholders in 2025.

The company released an announcement this evening. Last year, the company achieved operating revenue of 89.184 billion yuan, up 14.55% year over year; net profit attributable to shareholders of listed companies was 13.461 billion yuan, up 21.97% year over year.

Looking at quarterly performance, last year in Q4 the company recorded operating revenue of 22.782 billion yuan and net profit attributable to the parent company of 1.580 billion yuan, with year-over-year changes of -18.37% and -54.02%, respectively. This is the first time since Q4 of 2021 that the company has seen both single-quarter revenue and net profit decline at the same time.

By business segment, as a dual-business leader spanning photovoltaic inverters and energy storage systems, last year the company’s energy storage business generated revenue of 37.287 billion yuan, with its share further increasing to 41.81%; photovoltaic industry revenue was 44.550 billion yuan, accounting for 49.95%. In 2025, the company’s shipments of photovoltaic inverters are 143GW, a slight decline versus the previous year (147GW); global shipments of energy storage systems were 43GWh, up 53% year over year.

However, the company’s product gross margin has diverged. The financial report shows that the company’s product gross margin last year was 31.83%, up 1.89% year over year. The company said this was mainly due to factors such as brand premium, product innovation, and economies of scale. Among them, the 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 the gross margin for energy storage systems was 36.49%, down 0.2 percentage points year over year. In addition, gross margin for power station investment was 14.50%, down 4.9 percentage points year over year.

For the decline in energy storage gross margin, industry insiders told Caixin News Service reporters that although Sunlight Power still has advantages in high-gross-margin overseas markets, most of the company’s battery cells are externally procured, meaning costs are greatly affected by changes in upstream prices.

Public data shows that in the third quarter of last year, the price of lithium carbonate underwent a V-shaped rebound, driving a significant increase in battery cell costs. A person from a battery cell company told Caixin News Service reporters that, typically, for every 10,000 yuan per ton increase in lithium carbonate prices, the battery cell cost increases by roughly 0.006 yuan/Wh. In early August last year, the lithium carbonate price started at around 77,000 yuan/ton and, by the end of December, broke above the 120,000 yuan/ton threshold, with a cumulative increase of more than 50%. Considering price changes of materials such as electrolyte and lithium hexafluorophosphate, the theoretical battery cell cost increase was more than 0.04 yuan/Wh.

It should be noted that while performance has maintained rapid growth, Sunlight Power’s inventory scale has also remained at a relatively high level. As of December 31, 2025, in the company’s consolidated financial statements, the carrying balance of inventories was 28.749 billion yuan, the inventory provision for impairment due to price declines was 1.494 billion yuan, and the carrying value was 27.255 billion yuan.

According to the latest disclosed announcement, the company made total provisions for credit impairment and asset impairment of approximately 2.185 billion yuan last year. Among them, the projects for asset impairment provisions mainly included fixed assets, contract assets, inventories, and contract performance costs, with total asset impairment provisions of 1.383 billion yuan, as well as credit impairment provisions of 8.02? billion yuan.