What happened
On August 28, Sungrow, a leading PV inverter maker, posted its 2026 semi-annual report showing revenue of 30.912 billion yuan, down 28.99% year on year, and net profit attributable to shareholders of 5.259 billion yuan, down 32.01%.
Energy storage systems became the company's largest revenue source in the period, contributing 154.56 billion yuan, or 50% of total revenue, surpassing PV inverters. PV inverters and other power electronic conversion equipment generated 123.88 billion yuan, about 40% of total revenue.
The company's overall gross margin rose to 35.92%, up 1.56 percentage points, helped by product mix optimization. However, the energy storage business gross margin fell 7.49 percentage points to 32.43%, which the company attributed to lithium carbonate price fluctuations and market structure, while PV inverter gross margin climbed 6.98 points to 42.72%.
Why it matters
Sungrow's results reflect a broader industry shakeout: China's PV sector saw new installations plunge about 66% year on year in the first half, and several major players recorded multibillion-yuan losses. Storage demand, meanwhile, stayed resilient globally, helping companies with storage exposure cushion the downturn.
The company's overseas revenue share jumped to 73.40% from 58.30%, underscoring the value of global expansion, though currency swings also inflated financial expenses by 239.94%.
Sungrow also listed AIDC power as a major business for the first time, signaling an attempt to build a new growth engine beyond PV and storage through products like solid-state transformers and a partnership with Alibaba Cloud.
Key facts
Sungrow's 2026 H1 revenue was 30.912 billion yuan, down 28.99% year on year; net profit attributable to shareholders was 5.259 billion yuan, down 32.01%.
Energy storage systems accounted for 50% of total revenue, becoming the largest business; PV inverters accounted for about 40%.
Overseas revenue reached 22.69 billion yuan in H1, accounting for 73.40% of total revenue, up from 58.30% a year earlier.
The new energy investment and development business shrank sharply, with revenue falling 85.02% year on year to 1.258 billion yuan.
Global lithium battery storage installations reached 140GWh in H1, up 30% year on year, while China's PV new installations fell about 66%.
What to watch next
Whether Sungrow can reverse the decline in energy storage gross margin, which fell 7.49 percentage points year on year due to lithium carbonate price swings and market structure.
How the company manages exchange-rate risks, as financial expenses surged 239.94% from euro and dollar depreciation causing exchange losses.
Whether the newly launched AIDC power business, including the EnerNeo series solid-state transformers and the Alibaba Cloud partnership, can become a meaningful new revenue stream.