On January 19, 2026, industrial automation leader Shenzhen Inovance Technology Co.,Ltd. officially announced its plan to issue H-shares and list on the Hong Kong Stock Exchange, marking the formal launch of a dual-platform "A+H" strategy for this A-share company with a market capitalization of approximately 200 billion yuan. The market was not taken by surprise. Just three months prior, Inovance had completed the "A-spin-off-A" listing of its subsidiary United Power, whose market value rapidly soared to nearly 70 billion yuan. This capital move is viewed as a crucial step in its internationalization strategy, with a deeper underlying intention to raise funds for its energy storage business. Inovance is placing a massive bet on the digital energy sector. In its Q3 2025 financial report, the company explicitly prioritized "key breakthroughs in overseas energy business," echoing the objectives of this Hong Kong listing endeavor. Inovance is no newcomer to the energy storage field. As early as 2009, Zhu Xingming led the charge into the photovoltaic inverter sector, once propelling Inovance to the number two position domestically. At that time, energy storage was more of an ancillary product to new energy. A decision in 2016 changed everything. Zhu Xingming decisively cut the photovoltaic business, shifting strategic focus to the then loss-making new energy vehicle and industrial robotics sectors. Three years later, he publicly admitted this was the "biggest strategic mistake in Inovance's history" and a "bloody lesson," attributing the failure fundamentally to an "unclear understanding of the era" and "insufficient resolve." When he decided to re-enter the energy sector in 2020, the market landscape had transformed. Inovance no longer confined itself to singular inverter hardware but aimed for a digital energy ecosystem covering "generation, grid, load, and storage," with the goal of managing customers' "carbon assets." 2025 became a pivotal year for Inovance's energy storage business. In November, its Xi'an energy storage base, with a total investment of approximately 1 billion yuan and an annual production capacity of up to 50GW, commenced operations, instantly catapulting the company into the top tier of global standalone energy storage converter factories. As Inovance made its grand entry into energy storage, the industry was undergoing severe growing pains. In February 2025, the National Development and Reform Commission and the National Energy Administration issued a notice on deepening market-oriented reforms for new energy feed-in tariffs to promote high-quality development of new energy, marking the official cancellation of the long-standing mandatory energy storage allocation policy. The policy shift was rapidly reflected in market data. Q1 2025 saw the first negative growth since 2020 in the newly commissioned capacity of new-type energy storage projects domestically, with declines in both front-of-meter and behind-the-meter new installations. While the cancellation of mandatory allocation aimed to return energy storage to market fundamentals, it inadvertently intensified cut-throat competition within the industry. Data from the China Energy Storage Alliance (CNESA) showed that in large-scale centralized procurement in 2025, the average price for 4-hour energy storage systems had plummeted to 421.52 yuan/kWh, with the lowest winning bid hitting a record low of just 370 yuan/kWh. The price war had reached a survival threshold for companies. Data from the China Industrial Association of Power Sources indicated that from the end of 2022 to August 2025, the price of lithium iron phosphate materials crashed from 173,000 yuan per ton to 34,000 yuan, a drop of 80.2%, with the entire industry reporting continuous losses for over 36 months. Inovance itself was not immune. In July 2025, the company won the bid for a 65MW energy storage project from PetroChina with an ultra-low price of 0.192 yuan per watt. The company's overall gross margin had declined steadily from 52.2% in 2012 to approximately 30% by 2024. Against the backdrop of unsustainable pure price competition, Inovance began exploring differentiated competitive pathways. On January 20, 2026, Inovance signed a strategic cooperation agreement with Hongzheng Energy Storage in Suzhou, upgrading their collaboration from "single-point equipment procurement" to a comprehensive strategic partnership involving "capacity locking, technological synergy, and joint market expansion." According to the agreement, the two parties will conduct joint research on key technologies such as grid-forming control and extreme environment adaptation, enhancing the operational stability of energy storage systems in complex environments like weak grids and high altitudes. The core logic of this cooperation model is to build more robust supply chain relationships through technological integration and capacity locking, avoiding purely price-based competition in the open market. Another advantage for Inovance lies in customer synergy. The company has long served high-energy-consumption enterprises in sectors like metallurgy, chemicals, and lithium battery manufacturing. These companies face real cost-reduction pressures under dual-control energy policies, making them potential clients for commercial and industrial energy storage. Leveraging this advantage, Inovance launched its FEMS energy management software platform. This platform enables precise regulation of the supply side and energy storage without altering a company's existing grid infrastructure, providing a comprehensive energy efficiency optimization solution covering "generation, grid, load, and storage." For Inovance, which entered the global top ten in energy storage converter shipments in 2025, the real challenge may not be production capacity, but the change in the industry's rules of the game. Currently, the bid price for a 200MW/800MWh independent energy storage project in Wusu City, Xinjiang, has dropped to about 0.937 yuan/Wh. As the industry shifts from "mandatory allocation" to "market-driven," energy storage projects must prove their economic viability in the electricity spot market, peak-shaving and frequency-regulation services, and capacity compensation. Zhu Xingming has set a "three-step" target for the energy storage business: achieve a market share exceeding 5% by 2026; rank among the top three globally by 2028; and dominate the next-generation energy storage technology standards after 2030. Inovance's 50GW Xi'an base can shorten the product production cycle to just 3 days, but in the battlefield of the price war, this resembles more an endurance race than a sprint.
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