The average gross profit of photovoltaic inverter industry is over 30%, and energy storage inverter will become a new growth point of business

(I) The average gross profit margin of the photovoltaic inverter industry is over 30%, and energy storage inverters will become a new growth point for the business

This article focuses on sorting out the 2020 financial reports of major photovoltaic listed companies that have been published, briefly analyzing the profitability of leading photovoltaic companies in 2020, and then looking forward to the profit prospects of the entire photovoltaic industry.

The financial report series compiled by Gaix Consulting this time covers mainstream listed photovoltaic companies in A-shares, Hong Kong stocks, New Third Board, GEM, Science and Technology Innovation Board, and US stocks. The selected companies correspond to the 2020 revenue, net profit, non-GAAP, gross profit, net profit data, etc. (the data are all selected from the platform disclosed on the official website or information disclosure system, and the final data is subject to the company's announced financial report)

The 2020 financial reports of the seven major inverter manufacturers selected this time are analyzed as follows:

As of the 2020 annual report, inverter manufacturers had a total operating income of 61.925 billion yuan in 2020, up 12.7% year-on-year. Gross profit and net profit increased by 6.4% and 82.2% year-on-year respectively; the average return on net assets increased by 4.1 percentage points year-on-year to 14.7%, surpassing silicon wafers to become the first in the industry chain. This shows that the overall profitability of inverter manufacturers in 2020 increased year-on-year, the main business is healthy and upward, and the profitability is at the top of the industry chain.

Figure 1: Profitability analysis of major inverter companies

Sungrow has the highest revenue in the inverter sector, with inverter shipments of 33.52GW in 2020

Among them, Chint Electric had the highest total revenue, reaching 33.25 billion yuan. Among the companies whose main business is photovoltaic products, Sungrow Power Supply had the highest total revenue, reaching 19.29 billion yuan, of which the inverter business revenue was 7.51 billion yuan.

The gross profit margins of GoodWe, Jinlong Technology and Sineng Electric show that the gross profit margin of the inverter industry is relatively high, averaging around 30%. Sungrow and Sineng Electric mainly produce centralized inverters, which leads to their high shipments of 33.52GW and 5.97GW respectively, up 103% and 21% respectively from the same period last year.

Figure 2: Sungrow Power Supply Financial Report Analysis

Among the companies whose main business is the photovoltaic industry, Sungrow has the highest return on net assets, reaching 18.7%, an increase of 8.3 percentage points over the same period last year. The inverter shipments reached 33.52GW, of which 22GW was in overseas markets, accounting for 63%, and the global market share was about 27%. It ranks first in many overseas countries and regions and is expected to maintain its leading position in photovoltaic inverters.

GoodWe's energy storage inverter business is outstanding, with energy storage inverter revenue reaching 159 million yuan in 2020

Figure 3: Analysis of GoodWe’s financial reports from 2018 to 2020

GoodWe's total revenue was 1.589 billion, a significant year-on-year increase of 68.1%. In 2019 and 2020, the revenue from energy storage inverters was 108 million yuan and 159 million yuan respectively, with year-on-year growth rates of 148% and 47%. At the same time, the company is actively developing industrial and commercial energy storage and other forms of energy storage system products, and it is expected that the energy storage business will continue to grow rapidly.