Sineng Electric's Two-and-a-Half-Year Private Placement Shrinks by 35%: Key Financial Metrics Diverge from Peers, Capacity Utilization Faces Sharp Fluctuations

On November 23, Sineng Electric Co., Ltd. announced that its private placement registration application had been approved. The company plans to raise 1.65 billion yuan to fund the industrialization projects for 25GW string photovoltaic inverters and 15GW energy storage converters annually, with the remaining funds allocated to working capital.

Compared to the initial proposal, the fundraising target was reduced from 2.55 billion yuan to 1.65 billion yuan, a 35% cut. The scope of the projects was also scaled back. However, post-expansion capacity utilization rates for key products like distributed string inverters and energy storage converters are projected to plummet from 536% and 272% to below 50%, raising doubts about the rationale behind the expansion.

Despite multiple rounds of financing—including an IPO in April 2020 (raising 397 million yuan) and a convertible bond issuance in June 2022 (420 million yuan)—Sineng Electric’s debt ratio remains persistently above 70%, significantly higher than peers like Sungrow Power, Ginlong Technologies, and Deye Inverter. Analysts speculate the private placement may prioritize debt reduction over genuine capacity expansion.

The company’s financial performance is also under pressure. For the first three quarters of the year, revenue grew 16.15% year-on-year to 3.565 billion yuan, but net profit attributable to shareholders rose only 2.99% to 311 million yuan, with non-GAAP net profit up a mere 0.22%. The third quarter saw a 21.88% YoY decline in net profit, signaling a downturn.

Sineng’s gross margin of 24.17% (down 1.15 percentage points YoY) continues to trail competitors. Rising sales expenses (up 58.47%) and financial costs (up 230.21%), alongside a 55.19% increase in credit impairment losses, further eroded profitability.

Notably, the company’s inventory write-down provisions—0.24%, 0.16%, and 0.10% from 2022 to 2024—are far below the peer average of 1.70% to 4.16%, suggesting potential under-provisioning. With weak competitiveness in photovoltaic inverters and energy storage converters, Sineng’s aggressive expansion plans heighten concerns over project viability and future earnings risks.