In March, the first A-share IPO in the energy storage sector, valued over 10 billion yuan, is set to launch!
After nearly three years of anticipation, Shenzhen Shouhang New Energy Co., Ltd. (referred to as “Shouhang New Energy”) is making its final push for an A-share listing. Recently, the company released its intention to publicly offer shares and list on the ChiNext board. The IPO registration became effective on February 11, indicating that the company is taking crucial steps on its capital journey.
This IPO aims to raise approximately 1.211 billion yuan, which will primarily fund projects such as the “Shouhang Energy Storage System Construction Project,” “Research and Development of New Energy Products,” and “R&D Center Upgrade Project.” Shouhang New Energy is positioned to be the first major player in the energy storage sector to enter A-shares this year, with a scheduled public meeting with investors on March 24.
The company plans to issue 41.237 million shares, accounting for 10% of the total shares post-issue, all of which are new shares. Following this issuance, the total share capital will rise to 412.371 million shares. According to calculations by Energy No.1, Shouhang New Energy’s pre-IPO valuation exceeds 12 billion yuan. Based on existing inverter stocks, its market cap post-listing could surpass 30 billion yuan, making it another significant player in the energy storage sector after firms like Jinlang Technology and Sungrow Power.
Shouhang New Energy has demonstrated stable performance, which is crucial for its IPO prospects. As a leading supplier of photovoltaic grid-connected inverters, photovoltaic energy storage inverters, and storage batteries, the company has adapted over the years to a market-driven model from one reliant on subsidies. It has established itself as a prominent entity in the photovoltaic inverter market, recognized for its market share, technological capability, and brand awareness.
According to a report by the renowned energy and renewable research institution Wood Mackenzie, Shouhang New Energy ranked tenth in global photovoltaic inverter shipments in 2023. Additionally, data from IHS Markit ranked the company ninth in the global household inverter market for 2021.
Many energy storage companies struggle with IPOs due to unclear performance trends and investor concerns. However, Shouhang New Energy stands apart. Its revenue for 2021, 2022, 2023, and the first half of 2024 were 1.826 billion yuan, 4.457 billion yuan, 3.743 billion yuan, and 1.469 billion yuan, respectively, with net profits attributable to the parent company being 257 million yuan, 842 million yuan, 306 million yuan, and 123 million yuan during the same periods. The company has maintained positive net profits throughout.
For 2024, Shouhang New Energy forecasts a revenue of 2.713 billion yuan and a net profit attributable to shareholders of 254 million yuan, with a projected net profit after non-recurring losses of 236 million yuan. The company’s stability is further supported by its compliance with ChiNext requirements, including R&D investments.
The company’s total assets at the end of 2021, 2022, 2023, and June 2024 stood at 2.308 billion yuan, 4.968 billion yuan, 4.913 billion yuan, and 4.747 billion yuan, respectively. Its current assets as a percentage of total assets were 86.93%, 84.50%, 79.20%, and 79.16%, indicating a stable asset composition that aligns with its operational performance.
The global photovoltaic market is experiencing rapid growth, driven by decreasing photovoltaic power generation costs and the swift development of clean energy. Shouhang New Energy has pursued a global strategy, establishing a strong customer base in Europe, Asia-Pacific, South America, the Middle East, and Africa, with a high proportion of overseas sales revenue.
In 2022, the energy supply shock from the Ukraine crisis combined with global inflation resulted in significant increases in electricity prices in major European countries. Customers in these regions are now placing greater emphasis on the economic viability of electricity prices and the stability of power supplies, driving demand for domestic photovoltaic and energy storage products.
Since the second half of 2023, as the impact of the Ukraine crisis has eased and European natural gas supplies have stabilized, electricity prices have begun to decline, leading to a slowdown in demand for energy storage in the residential and commercial markets. Nevertheless, the company’s performance remains resilient, positioning it favorably for its IPO journey.
Shouhang New Energy has seized opportunities in three key areas: grid-connected inverters, storage inverters, and storage batteries. The grid-connected and storage inverters must meet rigorous outdoor installation requirements, ensuring stability against environmental challenges like high temperatures and dust.
The characteristics of storage batteries are more sensitive, where issues like over-voltage and short circuits can impact system safety, making the stability of storage batteries critical to the overall safety of the photovoltaic and storage system. To enhance product stability, the company adheres to industry-leading standards across design, component procurement, production control, and aging testing.
The company’s grid-connected inverter business represents its core and largest segment, projecting a revenue of 750 million yuan in the first half of 2024. Revenue from storage inverters and batteries reached 366 million yuan and 317 million yuan, respectively. The production-sales ratios for grid-connected inverters, storage inverters, and storage batteries are 88%, 109%, and 222%, indicating a strong demand for storage batteries and a balanced supply for grid-connected inverters.
Since its inception, the company has established subsidiaries in Germany, Australia, Poland, and South Korea to provide localized services, ensuring quick responses to customer needs. It has built a global service team and a customer relationship management system, enabling effective problem resolution for global clients.
In the first half of 2024, domestic sales increased compared to the entirety of 2022, while foreign sales accounted for approximately 83% of total revenue, with domestic sales at 16.81%. Sales to the top five customers represented 60%, 65.20%, 49.40%, and 51.72% of total revenue from 2021 to the first half of 2024, primarily from Europe (Italy, Poland, Czech Republic) and Brazil, with Italy being the largest contributor through its partnership with Zucchetti Centro Sistemi SpA (ZCS).
With a comprehensive product line and a focus on sectors that are currently in demand, Shouhang New Energy is poised for significant growth post-IPO. The company offers products ranging from 1.1 kW to 350 kW in grid-connected inverters, showcasing a wide range of power options. Its storage inverters support high battery voltages and include multiple safety features, while storage batteries demonstrate impressive capacity ranges.
From 2021 to 2023, the company’s R&D expenses were 94.23 million yuan, 192.53 million yuan, and 308.35 million yuan, with an additional 153.77 million yuan in the first half of 2024. The R&D investment has consistently increased, with over 10% of revenue allocated to R&D in the first half of last year, highlighting the company’s commitment to technological advancement.
Shouhang New Energy has been recognized as a national high-tech enterprise since 2017, holding 250 patents as of the date of this prospectus, including 105 invention patents, 94 utility model patents, and 51 design patents. The company employs a dedicated R&D team of 525 personnel, representing 27.88% of its total workforce, and has received numerous awards from reputable institutions, enhancing its brand recognition and reputation.
In summary, Shouhang New Energy’s strategic positioning and comprehensive product offerings, combined with a strong commitment to R&D and market expansion, position the company favorably for its upcoming A-share IPO and future growth in the renewable energy sector.
