Eve Energy Co.,Ltd. announced on March 30 that it would exercise an early redemption of its convertible bonds. The following day, the company's stock fell nearly 10%, while its convertible bonds experienced a 20% drop, hitting the daily limit-down threshold.
In March 2025, Eve Energy raised 5 billion yuan through the issuance of convertible bonds, with a first-year interest rate of only 0.2%. On March 30 of this year, immediately after meeting the condition that its closing price had been no less than 130% of the conversion price for nearly 15 consecutive trading days, the company swiftly approved a proposal for early redemption.
This means Eve Energy utilized 5 billion yuan in funds for one year at an almost zero cost, then moved to reclaim investors' potential equity conversion rights through forced redemption. The company's financial expense ratio stands at around 1%, similar to that of comparable firms. The market was taken by surprise by Eve Energy's decision to prioritize minor savings over the interests of minority investors, leading to a sell-off in both its shares and bonds.
In 2025, Eve Energy managed to keep its net profit nearly flat year-over-year only by reducing the expensing ratio of its R&D expenditures. While the company's profitability declined, its cash collection ratio remained low, indicating that its operational condition had not improved.
It is noteworthy that the company's actual controller cashed out nearly 3 billion yuan through a share transfer during the same year, effectively reducing their stake acquired via a previous low-price private placement. A series of such actions have eroded market trust, and the ongoing Hong Kong IPO is likely to face negative repercussions as a result.
Eve Energy announced the early redemption of its convertible bonds on the evening of March 30. The redemption price was set at 100.034 yuan per bond, with the record date on April 23, 2026, and the redemption date on April 24.
On March 31, Eve Energy's stock fell by 9.93%, while its convertible bonds dropped by the daily limit of 20%. The market reacted strongly against the company's decision.
The 5 billion yuan convertible bonds were issued on March 24, 2025, with an original conversion period spanning six years, from September 29, 2025, to March 24, 2031. The annual interest rates were set at 0.2%, 0.4%, 0.6%, 1.5%, 1.8%, and 2.0%, respectively. However, after just one year and six days, Eve Energy initiated a forced redemption, apparently to avoid paying rising interest rates in subsequent years. In effect, the company used 5 billion yuan for one year at a cost of only 0.2%.
Eve Energy's financial expense ratio has long remained around 1%, lower than that of peers such as Guoxuan High-Tech and Sunwoda, and only slightly higher than industry leader CATL, indicating that its interest payment burden is not particularly high.
Moreover, between February 25 and March 30, 2026, Eve Energy's stock price closed at or above 130% of the conversion price of 50.28 yuan per share (i.e., 65.37 yuan) for 15 out of 30 consecutive trading days, precisely triggering the conditional redemption clause. On March 30, the company's board passed a resolution to forcibly redeem all unconverted bonds at 100.034 yuan per bond, far below the market price of around 167 yuan at the time. This further highlighted the management's eagerness to execute the redemption.
Convertible bonds are generally viewed as a financing tool with downside protection and unlimited upside potential. However, a forced redemption just one year after issuance is rare in the A-share market. One market participant commented, "The bonds had been listed for only about a year, with a long time until maturity. Most investors did not expect the company to trigger redemption so soon, leaving them unprepared."
Eve Energy's pursuit of minor cost savings at the expense of minority investors surprised the market, leading to a sharp decline in both its stock and bond prices.
In 2025, Eve Energy's power battery shipments reached 50.15 GWh, up 65.56% year-over-year, moving the company to sixth place in global rankings. Its energy storage battery shipments grew 40.84% to 71.05 GWh, ranking among the top two globally.
However, the increase in market share was entirely driven by price competition and did not lead to any improvement in the company's earnings or cash flow.
Eve Energy's revenue in 2025 was 61.47 billion yuan, up 26.44% year-over-year, significantly lower than the growth rates of its power and energy storage battery shipments. Its net profit attributable to shareholders was 4.134 billion yuan, a mere increase of 1.44%, or 58 million yuan, from the previous year.
It is important to note that the company's full-year R&D expenditure was 3.435 billion yuan, of which approximately 400 million yuan was not expensed in the current year, lowering the expensing ratio compared to nearly 100% in previous years. It was only through this accounting adjustment that the company managed to keep its annual net profit largely unchanged.
In fact, compared to its peers, Eve Energy's net profit growth has been consistently low, particularly since 2024.
In 2025, Eve Energy's gross margin was 16.17%, down 1.24 percentage points year-over-year, while its net margin fell 1.65 percentage points to 6.73%. As profitability declined, its cash collection ratio remained below 80%.
While operational conditions did not improve, major shareholders were engaged in other activities.
In November 2025, the company's actual controllers, Liu Jincheng and Luo Jinhong, transferred 40.7768 million shares through a block trade at 72.20 yuan per share, cashing out 2.944 billion yuan in one transaction.
In 2022, Eve Energy raised 9 billion yuan through a private placement to its controlling shareholder, Eve Holding, and the actual controllers, Liu Jincheng and Luo Jinhong, at 63.11 yuan per share. The recent share transfer effectively allowed them to reduce part of their stake acquired in the low-price placement.
The company also conducted two additional private placements in 2019 and 2020, raising a total of 5 billion yuan from the market. It is currently planning a Hong Kong IPO.
However, recent actions have gradually eroded market confidence, and the ongoing Hong Kong IPO is likely to face adverse effects as a result.
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