Jinlang Technology Sells 72 Subsidiaries to Focus on Energy Storage Inverters Amidst Strategic Shift

Disposing of 72 Subsidiaries! Jinlang Technology Takes Drastic Measures for Survival, Energy Storage Inverters Surge by 313%.

In September 2025, Jinlang Technology completed a share transfer for four subsidiaries amounting to 29.059 million yuan. While this transaction may seem like a routine asset sale, it actually reflects a broader strategy in which the company has canceled 505 businesses and transferred 72 subsidiaries within the year. The divested subsidiaries primarily include household photovoltaic power stations, which once served as a cash cow for the company with gross margins exceeding 50%.

In the backdrop of holding a steady third-place market share in photovoltaic inverters nationwide, one may wonder why Jinlang Technology is opting for such drastic measures. The financial report indicates that in the first half of 2025, the company’s net profit attributable to shareholders rose by 70.96%. However, long-term loans surged dramatically, increasing 50 times to reach 7.339 billion yuan. This large-scale asset sale appears to align with a strategic shift towards energy storage inverters, emulating companies like Deye.

The company is transitioning from heavy asset power plants to a lighter asset technology model. In the first half of 2025, Jinlang Technology’s revenue structure underwent a significant transformation. Revenue from photovoltaic power plant operations (including power generation and photovoltaic power systems) fell from 68% in 2023 to 45% in 2025, though it still remains a vital profit contributor with 629 million yuan in operating profit (representing 45% of total profits). Conversely, the inverter segment (including grid-tied and storage inverters) saw revenue rise to 2.613 billion yuan, accounting for 55% of total revenue. Notably, the revenue from energy storage inverters skyrocketed by 313.51% to 793 million yuan.

The company has strategically abandoned household photovoltaic systems, refocusing on commercial and industrial storage solutions. The subsidiaries that were sold primarily operated household photovoltaic power stations, collectively boasting a grid-connected capacity of around 1,300 MW. In 2025, new investments are projected to raise 1.677 billion yuan, with 625 million yuan earmarked for upgrading inverter production capacity, particularly in the commercial and industrial storage sector. Jinlang’s new HJT series inverters have achieved a conversion efficiency of 99.2%, significantly higher than the industry average of 98.5%.

However, the company faces challenges associated with its heavy asset model. Fixed assets accounted for over 70% of total assets, reaching 15.318 billion yuan by the end of 2023. From 2021 to 2023, cash payments for long-term asset purchases exceeded 14.104 billion yuan, leading to increasing depreciation pressures. In the first half of 2025, combined depreciation and interest expenses totaled 569 million yuan, eroding profits. Long-term loans jumped from 1.34 billion yuan in 2020 to 7.339 billion yuan by mid-2025.

To alleviate financial pressure, Jinlang Technology improved its cash flow through asset sales, recovering 518 million yuan from subsidiary disposals, which helped reduce cash flow from investment activities from a negative 2.973 billion yuan in 2023 to 1.509 billion yuan in the first half of 2025. In August 2025, the company successfully raised 1.677 billion yuan for production capacity upgrades.

While profit margins for photovoltaic systems remain above 50%, with systems achieving 58%, the gross margin for energy storage inverters stands at 30.27%, significantly lower than Deye’s 45%. Nonetheless, the overall net profit growth rate of 70.96% exceeds that of competitors such as Sungrow.

Jinlang Technology’s founder, Wang Yiming, emphasized in an internal meeting, “In the past, we relied on the scale of power stations for success; in the future, we must lead with technology. Energy storage inverters are the second growth curve in the photovoltaic industry, and Jinlang must seize this transformation opportunity.” At the strategic release conference in 2025, he stressed that “selling power stations is not a retreat but a strategic move for more precise targeting. We aim to recreate Jinlang in the commercial and industrial storage sector within three years.”

According to Wang, the transition holds three major opportunities and two risks. The opportunities include: 1) An explosion in the storage market, with demand recovering in Europe and rapid growth in emerging markets in Asia, Africa, and Latin America, projecting over 100% growth in commercial and industrial storage by 2025. 2) A window for technological catch-up, as the HJT series inverters achieve efficiencies above 99%, narrowing the technology gap with Deye to less than a year. 3) The advantages of light asset operations, which will allow the company to respond more flexibly to market changes, with research and development investment expected to rise from the current 5% to 8%.

However, the commercial storage sector is crowded with giants like Deye and Sungrow, leading to intense price competition. Even with the asset sales, the outstanding long-term loans of 7.339 billion yuan will take 3-5 years to manage. Additionally, the technology path for energy storage inverters is not yet unified, with potential disruptions from materials such as silicon and silicon carbide.

The key to this transformation is to achieve full coverage of the commercial storage product line by the end of 2025 and to increase the gross margin of energy storage inverters to over 35%, while also boosting the European market revenue share from the current 15% to 25%.

The asset sales by Jinlang Technology represent more than just a simple business contraction; they reflect a strategic choice of “exchanging space for time.” By divesting its heavy asset power plants, the company secures cash flow to support energy storage technology research and development and focuses on commercial storage to avoid the competitive red ocean of household systems. While the pains of transition are inevitable, as Wang Yiming remarked, “Daring to take down old bestsellers allows us to introduce new strengths.” In the photovoltaic industry, where competition is shifting from scale to technology, this self-revolution by Jinlang Technology may be a crucial step toward becoming a leader rather than a follower.

Note: The contents and data in this article are for reference only and do not constitute investment advice. Investors act at their own risk.