Recent Crisis in Energy Storage Listed Companies: Key Technical Personnel and Executives Resign! Major Shareholders Reduce Holdings!
On March 15, Pylon Technology announced that two vice presidents had simultaneously resigned. This marks the third executive turnover at the company in the past six months. On the same day, Pylon Technology also disclosed that its controlling shareholder, Rongke Investment, plans to reduce its holdings by no more than 3% of the company’s shares, further raising doubts in the capital market about this energy storage enterprise.
Since its establishment, Pylon Technology has experienced numerous leadership changes. On May 19, 2024, Pylon Technology revealed that it had received a notification from its controlling shareholder, ZTE New Communications, regarding the investigation and detention of Chairman Wei Zaisheng. Public records indicate that Wei has worked at ZTE Holdings and has held various positions, including financial manager and general manager. He became chairman of ZTE New Communications in September 2017 and chairman of Pylon Technology in October 2019. ZTE New Communications holds 20.09% of ZTE’s shares and 24.61% of Pylon Technology’s shares.
In August 2024, Pylon Technology announced that due to Wei’s inability to perform his duties, the board elected Director Zhai Weidong to assume the responsibilities of chairman. Zhai has been with ZTE Communications since 1996 and joined Pylon Technology as a director simultaneously with Wei. However, in November 2024, Pylon Technology announced that the Yongqing County Supervisory Committee had lifted the measures against Wei, allowing both him and Zhai to resume their previous positions.
On February 28 of this year, Pylon Technology announced that it had recognized Cai Xuefeng as a core technical personnel and appointed him as vice president. Cai, born in 1977, has been with Pylon Technology since 2012, previously serving as product manager and director of the product line, and later as general manager of the energy storage product R&D center. Notably, other core technical personnel included Shi Lu, Zhu Guangyan, Hu Xueping, and Ji Linfeng. However, just two weeks later, on March 14, Pylon Technology announced that Shi Lu, also a vice president and core technical personnel, resigned for personal reasons and would no longer hold any position, thus being removed from the list of core technical personnel.
Shi, born in 1981, joined ZTE Pylon in October 2009, serving as software chief engineer and general manager of the energy storage systems division. He became vice president and general manager of the division in August 2016. On the same day, Vice President Feng Zhaohui also resigned due to personal health reasons but remains with the company. Feng, born in 1983, has worked at ZTE Communications since September 2006, holding various positions including marketing manager and brand director.
Declining Performance and Unfulfilled Growth Expectations
Pylon Technology, founded in 2009, was once hailed as the “first stock in energy storage,” being one of the earliest publicly listed companies in this sector. The company specializes in lithium iron phosphate energy storage battery systems and possesses core technologies across the entire industry chain, including cell, module, battery management systems, and energy storage system integration. Its products are widely utilized in various scenarios such as homes, commercial enterprises, power grids, communication bases, and data centers. To date, Pylon Technology has delivered over 2 million energy storage systems, servicing more than 90 countries and regions worldwide.
However, the company has faced challenges due to its previously narrow focus on overseas residential energy storage markets, which has contributed to its recent performance downturn. Since 2017, Pylon Technology has prioritized overseas residential storage, achieving significant revenue growth from 2018 to 2022. In 2022, the energy storage market in Europe surged due to the Russia-Ukraine conflict, resulting in a revenue increase of 200% to 6 billion yuan, with overseas sales accounting for 95.88% of its revenue. The stock price reached an all-time high of 509.5 yuan per share, with a market value soaring to 76.5 billion yuan.
However, starting in the second half of 2023, the European residential energy storage market began to contract rapidly, leading to inventory backlogs that became a hindrance to growth. As of the first three quarters of 2024, the company recorded energy storage battery system sales of 421 MWh, a year-on-year increase of 44.18%. However, its revenue dropped to 1.412 billion yuan, a decrease of 53.69%, and net profit plummeted by 94.29% to approximately 37 million yuan, nearing a loss.
The company attributed the revenue decline to macroeconomic changes, the ongoing reduction of subsidy policies in certain countries and regions, continued inventory reduction by overseas downstream companies, and a temporary slowdown in demand for residential energy storage compared to the same period last year. Notably, Pylon Technology is not without countermeasures; it has already implemented several measures for self-rescue over the past two years. For example, the company has expanded its international market presence beyond traditional residential storage markets in Europe and Australia, with products now reaching regions such as South Africa, Southeast Asia, and North America.
Additionally, Pylon Technology is developing a second growth curve outside of residential storage. In response to the booming domestic commercial energy storage market, the company launched a series of integrated commercial energy storage cabinet products ranging from 60 kWh to 400 kWh in 2024, covering various applications in commercial energy storage, reportedly achieving scale sales in Shanghai, Zhejiang, Guangdong, Jiangsu, and Anhui.
From an overall business perspective, Pylon Technology’s strategic direction appears sound; however, the execution may be perceived as slow. As of the first half of 2024, its overseas revenue was 812 million yuan, accounting for a staggering 94.94%, indicating that commercial storage has not significantly boosted the company’s revenue or profits. The domestic commercial energy storage market has become increasingly competitive, leading to intensified pressures and resulting in a “price war” that inevitably impacts sales performance.
Recently, Pylon Technology released its 2024 performance report, revealing a revenue of only 2 billion yuan, marking a decrease of 39.19% following a 45.13% drop in 2023. The net profit attributable to shareholders fell by 92.04% to 41 million yuan, placing the company on the brink of losses, with earnings per share at 0.17 yuan, down 94.28% year-on-year.
The company identified three primary reasons for the declining performance: first, the complex and changing global economic situation has led to a slowdown in industry growth and continued inventory reduction by downstream enterprises, reflecting the current state of the residential energy storage market; second, intensified industry competition has pressured the selling prices of energy storage products, which is believed to be the main reason for the decrease in operating revenue; and third, fluctuations in the international foreign exchange market have significantly affected the company’s exchange gains and losses compared to the previous year.
In terms of market value, Pylon Technology has experienced an even greater decline. Compared to its high in 2022, the company’s market value has plummeted from over 70 billion yuan to just over 10 billion yuan, a reduction of more than 85%. With new overseas production capacities yet to be operational and the departure of core technical personnel and veteran executives, Pylon Technology faces significant challenges. Additionally, the reduction in holdings by major shareholders raises further questions about whether the company can successfully navigate out of its profitability predicament.
