Sunwoda Electronic Co.,Ltd. (300207.SZ) recently submitted its listing application to the Hong Kong Stock Exchange, as this consumer battery leader that built its foundation through Apple's supply chain officially pursues an "A+H" dual listing strategy.
As a company that originated from consumer battery business, Sunwoda has been aggressively expanding into the power and energy storage battery markets in recent years, attempting to secure a share in the highly competitive power battery sector through capital operations and business diversification. However, its profitability in new business segments remains under significant pressure.
A detailed examination of financial statements reveals that while Sunwoda's revenue continues to climb, its net profit margin has remained at relatively low levels, falling below 1% in the past two years.
**Power Battery Business Shows Volume Growth but Price Decline**
According to the prospectus, Sunwoda's revenue increased 17.0% from RMB 47.862 billion in 2023 to RMB 56.021 billion in 2024. The growth was primarily driven by sales volume increases from domestic and overseas business expansion, though partially offset by declining average selling prices due to falling raw material costs.
Consumer batteries remain Sunwoda's primary revenue source. According to the company's 2024 financial report, consumer batteries, electric vehicle batteries, and energy storage system batteries accounted for 54.27%, 27.02%, and 3.37% of revenue respectively, with other businesses comprising 15.33%.
In 2024, power battery business revenue reached RMB 15.139 billion, up 40.24% year-over-year. Despite the continuous revenue growth in power battery business, this segment has not generated substantial profits. On the contrary, its gross margin ranks lowest among the company's three core business segments.
The prospectus shows that in 2024, Sunwoda's three major business segments achieved gross margins of: consumer batteries 18.3%, power batteries 8.8%, and energy storage systems 20.4%. As of the first quarter of 2025, while overall gross margins improved, power batteries still ranked last at 12.9%. During the same period, consumer batteries and energy storage batteries saw their gross margins rise to 20.2% and 25.5% respectively.
The pressure on power battery business gross margins stems from Sunwoda's "price-for-volume" strategy. In the first quarter of 2025, Sunwoda's power battery revenue was RMB 3.048 billion, up 14.4% year-over-year, while sales volume increased from 3.4GWh in Q1 2024 to 6.1GWh. However, unit selling price dropped sharply from RMB 0.8/Wh to RMB 0.5/Wh.
The company explained that this change was primarily due to synchronized price reductions following declining raw material costs. Data disclosed in the prospectus shows Sunwoda's power battery prices have been declining since 2022: from RMB 1.1/Wh in 2022 to RMB 1.0/Wh in 2023, and further down to RMB 0.6/Wh in 2024, nearly halving.
Affected by price reductions and other factors, Sunwoda's net profit margin has remained at low levels, falling below 1% in the past two years, raising concerns about profitability. How to improve profitability amid scale expansion has become Sunwoda's core challenge.
**Frequent Financing Activities**
With the accelerated rise of the new energy vehicle industry in 2018, Sunwoda increased investment in the lithium battery sector, followed by multiple rounds of financing.
In March 2018 and November 2021, Sunwoda conducted two private placements, raising RMB 2.55 billion and RMB 3.92 billion respectively for consumer and power lithium battery capacity expansion and working capital supplementation. In July 2020, the company issued convertible bonds raising RMB 1.12 billion for consumer cell capacity expansion and working capital supplementation.
In March 2023, Sunwoda announced a RMB 4.8 billion private placement plan, with proceeds mainly for SiP system packaging and testing projects, high-performance consumer cylindrical lithium-ion battery projects, and working capital supplementation. However, just months after the announcement, the company's board decided on August 14, 2023, to actively withdraw the private placement application from the Shenzhen Stock Exchange, stating it would reapply after revising the plan to meet regulatory requirements.
Notably, in July 2023, Sunwoda also announced plans to spin off its subsidiary Sunwoda Power Technology Co., Ltd. for listing on the ChiNext board of the Shenzhen Stock Exchange. Subsequently, Sunwoda Power signed a listing counseling agreement with CITIC Securities, officially launching the IPO process.
Prospectus data shows that from 2022 to 2024, Sunwoda Power recorded annual losses of RMB 1.26 billion, RMB 1.568 billion, and RMB 1.855 billion respectively. According to the revised ChiNext Listing Rules from 2023, companies must meet the first set of listing criteria requiring combined net profits of at least RMB 100 million over the past two years, with at least RMB 60 million in the most recent year. Clearly, with its current financial condition, Sunwoda Power faces difficulty listing on ChiNext in the short term, and to date, there has been no further progress on the spinoff listing.
Intensive capital investment has not generated abundant cash flow. Due to years of continuous expansion combined with the "price-for-volume" competitive strategy in power battery business, Sunwoda finds itself in a difficult position. As of the end of the first half of 2025, the company's cash on hand remained lower than interest-bearing debt in the same period, creating tighter financial conditions and forcing continuous pursuit of new financing channels.
**Fundraising to Accelerate Overseas Strategy**
Sunwoda was established in 1997 by Wang Mingwang and his cousin Wang Wei from Maoming, Guangdong. In April 2011, Sunwoda successfully listed on the Shenzhen Stock Exchange, issuing 47 million A-shares at RMB 18.66 per share and raising RMB 877 million. After completion, Wang Mingwang and Wang Wei held 33.1% and 13.82% stakes respectively.
Before submitting to the Hong Kong Stock Exchange, Wang Mingwang and Wang Wei held 19.6% and 7.18% of Sunwoda shares respectively. As parties acting in concert, they collectively hold 26.78%, making them the actual controllers.
As Sunwoda continued developing and advancing capital operations, Wang Mingwang accumulated considerable wealth. According to the 2025 Hurun Global Rich List, Wang Mingwang and his wife Cai Di'e ranked 2,295th with wealth of RMB 11.5 billion, becoming the new "richest in Maoming."
According to the prospectus, Sunwoda's fundraising will primarily support the company's globalization strategy, technology R&D, digital operations and intelligent upgrades, potential investments or acquisitions of upstream and downstream businesses, and working capital.
In July 2024, Sunwoda decided to invest in building a production base in Vietnam for manufacturing consumer cells, SiP modules, and battery packs, with total investment not exceeding RMB 2 billion. Sunwoda hopes this move will enhance supply chain efficiency and cost competitiveness while mitigating risks from market volatility.
The prospectus indicates the Vietnam base is expected to begin trial production in 2026, with approximately 30% of designed capacity operational by the end of 2026 and full operation by 2028.
In 2024, Sunwoda's overseas revenue reached RMB 23.431 billion, accounting for 41.8%. As of March 31, 2025, Sunwoda operated or was constructing 25 production bases, including 6 overseas bases distributed across India, Vietnam, Thailand, and Hungary.
Additionally, funds raised from this Hong Kong secondary listing will support R&D to further enhance the company's technological capabilities. This specifically includes developing new battery products, optimizing battery module design and development, improving battery management system technology, investing in next-generation battery technology development and strategic deployment, and continuously developing and perfecting R&D management systems and platforms.
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