Sungrow Power Supply(SZ:300274) Tai Mei Ti A P P·2025-05-28 13:05Core Viewpoint - The photovoltaic manufacturing sector has faced significant challenges over the past year and a half, including overcapacity, price declines, and intense competition, leading to substantial losses for many companies. However, inverter manufacturers have shown remarkable performance, becoming a bright spot in the industry despite recent negative news affecting the market outlook [2][3]. Group 1: Performance of Inverter Companies - In 2024, among 10 listed companies primarily engaged in inverter business, only GoodWe reported a loss of 0.62 billion yuan, while other companies achieved profitability. Leading company Sungrow achieved a record revenue of 77.86 billion yuan, a year-on-year increase of 7.76%, and a net profit of 11.04 billion yuan, up 16.92% year-on-year, making it the only company in the top 10 of the photovoltaic manufacturing sector to report growth [3][4]. - The second-highest net profit in the sector was reported by Deye Technology, with annual revenue of 11.21 billion yuan, a year-on-year increase of 49.82%, and a net profit of 2.96 billion yuan, up 65.29% year-on-year. Other inverter companies like Jinlang Technology and Shuneng Electric also performed well, indicating a peak year for many inverter manufacturers amid overall industry challenges [3][4]. Group 2: Market Reactions and Trends - The capital market responded positively to the performance of inverter companies, with Sungrow's stock price rising and its market capitalization surpassing that of leading material integration giant LONGi Green Energy. This shift reflects a growing optimism towards the inverter segment amid a generally challenging environment for photovoltaic materials [4]. - The first IPOs in the photovoltaic storage sector in 2024 were also inverter-focused companies, indicating a favorable market perception of the inverter segment compared to the broader photovoltaic materials market, which has seen no new listings [4]. Group 3: Future Market Dynamics - The inverter market is expected to face increased volatility due to market reforms and tariff changes in 2025, with predictions of a decline in photovoltaic installation volumes for the first time in five years. This anticipated decrease in demand could negatively impact inverter companies' performance [6][7]. - The "136 Document" issued by the National Development and Reform Commission and the National Energy Administration accelerated the market entry of renewable energy, leading to a surge in inverter production and shipments in early 2024. However, demand began to decline significantly from May, raising concerns about potential oversupply and price drops in the future [7][8]. Group 4: Export Performance and Challenges - In 2024, China's inverter exports reached 58.8 billion yuan, with Sungrow's overseas revenue accounting for 46.62% of its total revenue and a gross margin of 40.29%, nearly double that of its domestic operations. The overseas market remains crucial for many companies [8][10]. - However, trade barriers in the U.S. and Europe pose significant risks. The introduction of "reciprocal tariffs" in the U.S. and potential restrictions on Chinese inverters in Europe could impact export performance. Recent data shows a decline in exports to the U.S. and significant drops in exports to key European markets, highlighting the challenges faced by inverter manufacturers in maintaining their international market positions [9][10].