Core Viewpoint - The announcement of Nandu Power's plan to issue H-shares and list on the Hong Kong Stock Exchange is seen as a critical step in the company's globalization strategy, despite facing significant losses in 2024 [1][5] Financial Performance - Nandu Power expects a net loss of 1.2 billion to 1.56 billion yuan for the year 2024, with a non-recurring loss projected to be between 1.4 billion and 1.76 billion yuan, marking a historical high [1] - The company's revenue for 2024 is anticipated to be between 8.4 billion and 9.5 billion yuan, representing a substantial decline compared to previous years [2] - The fourth quarter of 2024 saw a significant drop in performance, primarily due to losses in both the lead recycling and lithium battery storage sectors [2][3] Business Challenges - The lead recycling business, once a major profit source, faced a sharp decline due to reduced supply of used batteries and high procurement costs, leading to a drastic drop in gross profit margins [2] - Increased competition in the lithium battery market and a significant drop in raw material prices resulted in a rapid decrease in sales revenue for lithium products [3] - The company faced delays in overseas orders and chose to forgo low-margin orders, leading to underutilization of production capacity and further losses [3] Financial Risks - As of September 2024, Nandu Power's total liabilities reached 14.516 billion yuan, with a debt-to-asset ratio of 73.26%, significantly higher than the industry average [4] - High levels of accounts payable and short-term loans account for over 70% of current liabilities, while cash reserves barely cover interest expenses [4] - The company has also made provisions for inventory and fixed asset impairments due to ongoing legal disputes and operational challenges [4] Strategic Moves - The planned IPO in Hong Kong is positioned as a key step for global expansion, with intentions to raise funds for overseas market development and liquidity enhancement [5] - The company aims to leverage the Hong Kong capital platform to enter higher-priced markets in Europe and North America, hoping to escape domestic price wars [5] - However, market analysts express skepticism about the feasibility of this strategy, given the current challenges in the storage industry [5] Industry Context - Nandu Power's situation reflects broader challenges within the Chinese energy storage industry, including risks associated with technology choices and high barriers in overseas markets [6] - The industry is shifting from a focus on scale expansion to lean operations, emphasizing the importance of strategic focus and technological innovation for survival [6] - The outcome of Nandu Power's IPO could serve as a significant reference point for the globalization path of the Chinese energy storage sector [6]