Bloomberg News
Mon, March 25, 2024
(Bloomberg) -- Sungrow Power Supply Co. surpassed Longi Green Energy Technology Co. as the world’s most valuable solar sector company, as tumbling equipment prices squeeze margins for manufacturers of panel components.
Hefei, China-based Sungrow gets the largest share of revenue from sales of inverters, the technology needed to convert direct current solar electricity into the alternating current that’s used in most power grids. The firm’s product mix offers “high volume growth” and relatively sustainable margins, Citigroup Inc. said in a note this month.
Longi, among the top global players in production of solar modules, cells and wafers, has slumped more than 70% from a 2021 peak as rapid expansion by manufacturers has outpaced demand growth. The firm plans to lay off thousands of workers to survive in an increasingly competitive landscape, Longi said earlier this month.
The company’s market capitalization fell Friday to 152.2 billion yuan ($21 billion), slipping behind Sungrow. Longi had been the most valuable of 13 major solar industry companies tracked by Bloomberg since September 2018. Both remain some way off the valuation of China’s leading energy firm, oil and gas producer PetroChina Co.
Sungrow advanced as much as 1.1% in Shenzhen trading as of 1:02 p.m. local time Tuesday, as Longi rose as much as 0.9% in Shanghai.
China’s boom in battery-storage capacity, which almost quadrupled last year, is handing another boost to Sungrow, which won about a quarter of revenue in 2022 from the segment. The company said in January it forecasts annual net income in 2023 rose as much as 187%.
Bloomberg Businessweek
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