Sungrow's H1 Revenue Drops 29%: Energy Storage Accounts for Half but Gross Margin Under Pressure
nashnova research
Sungrow posted RMB 30.9 bn in H1 2026 revenue, down 29% year-on-year; energy storage hit 50% of sales for the first time, yet its gross margin dropped 7.5 percentage points — scale alone is no longer buying profitability.
Revenue down nearly 30% — what dragged it?
The biggest drag was not the flagship inverter line but the new-energy investment and development segment — revenue just RMB 1.26 bn, down 85% YoY, shrinking from 19% of sales to 4%.
This means → the power-station development income that padded last year's top line has virtually disappeared.
The solar segment overall brought in RMB 12.4 bn, down 45% YoY, its share falling from 52% to 40%. In plain terms = what used to be half the company is now two-fifths.
Energy storage is carrying half the revenue — so why the worry?
Storage revenue reached RMB 15.46 bn, down only 13% YoY, and its share rose from 41% to 50% — the first time it has been Sungrow's single largest segment.
But gross margin fell to 32.43%, down 7.49 percentage points YoY; operating costs dropped just 2.36%, far slower than revenue.
This means → volume held up, pricing did not — competition and price pressure have moved from the order book into the profit line.
Inverters are actually improving?
Inverter revenue was RMB 12.39 bn, down 19% YoY, but costs fell 28%, lifting gross margin to 42.72% — up 7 percentage points.
In plain terms = revenue shrank, but costs shrank faster, so each unit sold earned more.
This reflects an inverter market past its most brutal price-war phase, with earnings quality now recovering.
Profits fell 30%, yet operating cash flow rose — how?
Net income attributable to shareholders was RMB 5.26 bn, down 32%; stripping out non-recurring items, net income was RMB 4.28 bn, down a steeper 43%.
The gap is mainly RMB 983 mn in non-recurring gains (of which RMB 776 mn came from fair-value changes and disposal of financial assets). In plain terms = a big chunk of reported profit was propped up by investment gains, not the core business.
Operating cash flow reached RMB 3.74 bn, up 8.75% YoY; but inventory rose to RMB 32.15 bn, up ~RMB 4.9 bn from year-start. This means → cash collection is healthy, but goods are piling up — the question is whether H2 demand can absorb them.
FX losses and R&D — what changed on the cost side?
Finance costs swung from –RMB 263 mn (a net gain) to +RMB 368 mn, a RMB 630 mn swing, driven by euro and dollar depreciation that generated forex losses.
This means → with a high share of overseas revenue, currency moves slice directly into profit — not an operational issue, but it shows up on the income statement.
R&D spending bucked the trend, rising 2.85% to RMB 2.10 bn — the company did not cut research despite the revenue decline.
AI power and next-gen storage — what to watch in H2?
Sungrow flagged AI data-centre power supply (AIDC) as a new growth vector: its EnerNeo solid-state transformer is shipping, 800 V high-voltage DC products have completed small-batch delivery in China, and the company set up a joint innovation centre with Alibaba Cloud.
On the storage side, the PowerTitan 3.0 Plus liquid-cooled system offers 3.125 MW / 12.5 MWh per cabinet and energy density above 500 kWh/m².
But Sungrow itself warned in its risk disclosures: more entrants, rapid capacity expansion, and continued price erosion mean whether storage margins can stabilise is the key variable for H2.
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