Prospective IPONingbo Deye Technology Corporation (605117.SH) Goes Public in Hong Kong: A "Dual-Faced" Interpretation of High Margins and High Growth

Under the grand narrative of a rapid global transition towards a clean and low-carbon energy structure, the photovoltaic and energy storage industries are ushering in unprecedented development opportunities. As a key participant in this wave, Ningbo Deye Technology Corporation (hereinafter referred to as "Ningbo Deye Technology Corporation", 605117.SH) is moving towards another important milestone in its capital market journey. Following its listing on the Shanghai Stock Exchange main board in 2021, Ningbo Deye Technology Corporation submitted a second listing application to the main board of the Hong Kong Stock Exchange on July 28, initiating the layout of its dual capital platform "A+H". According to data from Frost & Sullivan, by sales value in 2025, Ningbo Deye Technology Corporation has risen to become the worlds largest provider of residential energy storage inverters. So, what highlights does this second submission bring? From a leader in low-voltage inverters to a provider of integrated solar storage solutions Ningbo Deye Technology Corporation's business landscape shows a clear "dual engine" pattern. The core growth engine is its new energy business, focusing on three main product lines: energy storage inverters, photovoltaic inverters, and energy storage battery packs. Meanwhile, the company has over twenty years of deep cultivation in the field of environmental management equipment, including dehumidifiers, CECEP Solar Energy air conditioners, and heat exchangers. This diversified product portfolio not only endows the business with resilience but also forms a reusable cost control gene on the manufacturing end. In recent years, the global energy storage market has experienced explosive growth. According to Frost & Sullivan's report, the global residential energy storage system market size has surged from 10.8 billion yuan in 2021 to 67.6 billion yuan in 2025, with a compound annual growth rate of 58.3%. It is expected that the market size will grow to 290.6 billion yuan by 2031, with a compound growth rate of up to 27.6% between 2026 and 2031. Factors driving this growth include countries' ambitions for carbon neutrality, economic considerations from rising electricity prices, and the rigid demand for backup power in areas with unstable grids. Ningbo Deye Technology Corporation has accurately seized this historic opportunity presented by the global energy transition. Unlike many peers competing in the mature markets of Europe and America, the company adopts a differentiated strategy of "three-dimensional marketing + brand internationalization + deep localization," taking the lead in entering emerging markets such as South Africa, Pakistan, and Brazil, where the grid is weak and electricity prices are high. Its products leverage core performances like low-voltage high-current technology, millisecond-level grid-tie and off-grid switching, and seamless compatibility with diesel generators to accurately address the "essential needs" of electricity in areas with weak grids, quickly establishing a first-mover advantage. The effectiveness of this strategy is notable. The prospectus shows that the company's products are distributed in over 150 countries and regions across six continents, with overseas revenue share climbing from 58.0% in 2023 to 79.7% in 2025, reaching 87.6% in the first four months of 2026, clearly tracing the successful trajectory of its global layout. Through diligent efforts in emerging markets and continuous international expansion, Ningbo Deye Technology Corporation has topped the global residential energy storage inverter market. According to data from Frost & Sullivan, its sales value in 2025 ranks first among global peers, solidifying its position as a global leader in the solar storage field. While consolidating its inverter advantage, Ningbo Deye Technology Corporation is transitioning towards becoming a provider of energy storage system solutions. The energy storage battery pack business has become the fastest-growing segment, with shipments and revenue projected to achieve high-speed growth of 67.2% and 56.3%, respectively, by 2025. The company achieves full-scenario coverage from low-voltage residential to high-voltage commercial applications, and from portable storage to containerized large storage through its four major product seriesspring, summer, autumn, and winter. Behind the high financial growth Financial data also confirms the growth trajectory of Ningbo Deye Technology Corporation. From 2023 to 2025, the company's revenue has risen from 7.48 billion yuan to 12.22 billion yuan, while annual profits increased from 1.79 billion yuan to 3.17 billion yuan. Entering 2026, the growth momentum remains strong, with revenue of 6.18 billion yuan and profit of 1.61 billion yuan achieved in the first four months, reflecting a year-on-year increase of 74.3%. This growth rate not only outpaces the industry average but also shows a characteristic where profit growth significantly exceeds revenue growth; the net profit growth rate is 65.3% in 2024, far exceeding the revenue growth rate of 49.8%. In terms of profitability indicators, the gross profit margin is maintained at 38.0% in 2025, with a net profit margin of 25.9%, and the gross profit margin of energy storage invertersa core producthas consistently remained above 51%. This high profit margin is achieved partly due to the company's procurement of domestic substitutes for key upstream components like IGBT and vertical integration of key structural parts, as well as its bargaining power in emerging markets. However, alongside the rapid industry and performance growth, the company faces multiple challenges. Firstly, scale expansion has raised concerns regarding the balance sheet. By the end of April 2026, the companys accounts receivable surged from 570 million yuan at the end of 2023 to 2.04 billion yuan, and inventory expanded from 750 million yuan to 3.08 billion yuan, with the turnover days extending to 39 days and 80 days, respectively. Although the company holds cash reserves amounting to 5.615 billion yuan, and its operational cash flow consistently covers net profit, the risk of inventory impairment cannot be ignored if downstream distributors fail to reduce stock as expected. Secondly, intense market competition poses a significant threat. The photovoltaic and energy storage sectors attract a large number of participants, and escalating competition may lead to price wars, thus compressing profit margins. Supply chain risks should not be overlooked either, as the company depends on key raw materials such as battery cells and IGBTs, and price fluctuations and supply stability directly impact the companys costs and delivery capabilities. Geopolitical issues and international trade policies present another area of concern. A large portion of the company's revenue comes from overseas, so global macroeconomic fluctuations, trade frictions, and changes in tariff policies (such as increased tariffs on Chinese products by the United States) could impact its business. Additionally, exchange rate fluctuations are an important variable; as the company's overseas sales are primarily settled in US dollars or euros, changes in the exchange rate of the yuan will directly affect its financial performance. On the operational side, the company also faces a series of challenges related to customer concentration, inventory management, product quality, and compliance in overseas operations. For instance, the company previously sold to a Syrian customer subject to international sanctions, although the monetary amount was small and remedial measures had been taken, this still highlighted the compliance risks it may face in expanding its global market. Looking ahead, Ningbo Deye Technology Corporation plans to primarily use the funds raised from this IPO for four major directions: enhancing research and development capabilities, expanding production capacity, strengthening the global marketing network, and supplementing working capital. The company is actively laying out next-generation technologies such as silicon carbide (SiC), high-power commercial products, and solid-state transformers, planning to build new production bases in Malaysia and other locations to optimize global capacity layout and improve cost efficiency. In conclusion, Ningbo Deye Technology Corporation's application for listing on the Hong Kong Stock Exchange demonstrates a clear picture of a successful transformation from traditional manufacturing to a leading global new energy enterprise. With its leading technology, diversified product portfolio, and strong global channels, the company occupies a favorable position in the rapidly growing energy storage sector. Despite facing challenges such as market competition, supply chain issues, and geopolitical factors, its solid financial fundamentals and clear strategic planning lay a strong foundation for continued growth in the future. This move to list in Hong Kong will undoubtedly inject new capital momentum into its globalization journey, warranting continued market attention.