Market Value Plummets by 60 Billion: Challenges Continue for Leading Energy Storage Company

PaiNeng Technology, known as the “first stock in energy storage,” is currently facing significant pressure as its market value has evaporated by 60 billion yuan. The company’s recent financial results reveal a decline in performance, with a reported 2024 revenue of 2.005 billion yuan, down 39.2% from the previous year. Additionally, the net profit attributable to shareholders was 41.11 million yuan, representing a staggering 92.0% decline. The non-recurring net profit even shifted into a loss.

This marks the second consecutive year of declining performance for PaiNeng Technology, with revenue plummeting from <b>6 billion yuan</b> in 2022 to the current <b>2 billion yuan</b>. The downturn can be attributed to two main factors: the complex and fluctuating global economic landscape and intensified competition within the industry. While the company initially benefited from the overseas household energy storage market, demand began to wane in 2023.

In 2024, PaiNeng Technology continues to struggle in the overseas market, facing fierce price competition domestically and challenges from rival manufacturers. The year 2022 was a peak for the company, with soaring performance and a market value that exceeded <b>70 billion yuan</b>. However, those days of effortless success are long gone. Today, PaiNeng Technology is amidst a crisis, grappling with transformation hurdles, executive turnover, and shareholder divestment.

According to <b>SNE Research</b>, the global energy storage battery shipment volume is projected to reach <b>301 GWh</b> in 2024, marking a growth of approximately <b>62.4%</b> year-over-year. Leading the pack are <b>CATL</b>, <b>Yiwei Lithium Energy</b>, <b>Xiamen Haichen</b>, and <b>BYD</b>, while PaiNeng Technology has slipped out of the top ten.

PaiNeng Technology, originally named ZTE PaiNeng, was established in <b>2009</b> and has its roots in the ZTE Group's investment platform. Initially focusing on the communication energy storage lithium battery market, it quickly became a leader in this field. The company specializes in the development, production, and sales of lithium iron phosphate battery cells, modules, battery management systems, and integrated energy storage systems, a model of vertical integration that is rare in China.

By <b>2019</b>, in its tenth year, PaiNeng Technology reported revenues of <b>820 million yuan</b>, outperforming its competitors. Its energy storage battery shipments accounted for <b>12.2%</b> of the global market, ranking third in household energy storage systems. The company was listed on the Science and Technology Innovation Board at the end of 2020, successfully raising <b>2.168 billion yuan</b>.

However, PaiNeng Technology's growth has largely hinged on overseas markets. Prior to its IPO, about <b>80%</b> of its revenue came from international sales, with products exported to markets in Europe, South Africa, Southeast Asia, North America, and Australia. In 2024, the overseas business revenue was <b>1.862 billion yuan</b>, a <b>39.69%</b> decrease, yet it constituted <b>93.79%</b> of total revenue.

The turning point began in 2022, often referred to as the year of explosive growth for household energy storage, driven by the energy crisis in Europe due to the Russia-Ukraine conflict. PaiNeng Technology’s revenue surged to <b>6.013 billion yuan</b>, nearly doubling year-over-year, with a net profit peak of <b>1.273 billion yuan</b>. The company also topped the global household energy storage system shipment rankings that year, and its market value surpassed <b>70 billion yuan</b>.

However, this surge was not sustainable as international demand proved ephemeral and competitors rapidly entered the space, leading to a downturn. In 2023, PaiNeng Technology's revenue fell to <b>3.299 billion yuan</b>, a <b>45.13%</b> decline, with a net profit dropping by <b>59.49%</b> to <b>516 million yuan</b>. By the latter half of 2023, the company reported a net loss attributable to shareholders.

For 2024, the downward trend continued, with revenue falling to <b>2.005 billion yuan</b>, a <b>39.24%</b> decrease, and net profit plummeting to <b>41.11 million yuan</b>, down <b>92.0%</b>. The company’s sales volume for energy storage products reached <b>1,521 MWh</b>, a decrease of <b>18.90%</b>, compounded by declining prices and significant currency exchange losses affecting profitability.

Data from the <b>Zhongguancun Energy Storage Industry Technology Alliance</b> indicates that China remains a core driver of global energy storage market growth, with new operational energy storage capacity projected to reach <b>43.7 GW/109.8 GWh</b>, reflecting a year-over-year increase of <b>103%</b>/<b>136%</b>.

Despite this ongoing decline, PaiNeng Technology announced a plan to distribute a cash dividend of <b>4.50 yuan</b> per ten shares (before tax), totaling <b>108 million yuan</b> (before tax), which raises questions among investors regarding the appropriateness of such distributions amid declining profits. With shareholders reducing their stakes and executive changes, PaiNeng Technology is indeed navigating a turbulent period.

As of April 18, the company had seen a drop of approximately <b>17%</b> in its stock price over the past month, with its market value halving to <b>9.1 billion yuan</b> compared to its high in 2022. On March 27, the third-largest shareholder, <b>Rongke Venture</b>, announced it would reduce its stake by up to <b>7360776 shares</b>, representing <b>3%</b> of the total shares, to address its own funding needs, equating to an estimated cash-out value of <b>700 million yuan</b>.

Notably, two years prior, another shareholder, <b>Rongtong Capital</b>, was penalized by the Shanghai Securities Regulatory Bureau for excessive selling. Over the first half of 2022, Rongtong Capital divested <b>5.08%</b> of its stake, realizing nearly <b>2 billion yuan</b> at a time when the stock price was at its peak.

PaiNeng Technology has faced multiple executive changes in the past year. On March 15, the company announced that Vice President and core technical staff member <b>Shi Lu</b> had submitted his resignation, along with Vice President <b>Feng Zhaohui</b>. Both executives held <b>27,300 shares</b> directly and additional shares through an employee stock ownership plan.

In addition to these changes, the company experienced a perplexing incident last May involving the detention of its chairman <b>Wei Zaisheng</b> due to an investigation. Three months later, it was reported that he would temporarily step down from his responsibilities, with <b>Zhai Weidong</b> appointed as interim chairman.

As a result of the slowing energy storage market demand, PaiNeng Technology announced a delay in the construction of a <b>5 billion yuan</b> energy storage battery research and manufacturing base, originally scheduled for completion in April 2025, now postponed by a year.

In light of the fluctuating performance, PaiNeng Technology has made attempts to pivot, but the path to transformation remains challenging, and a new growth trajectory has yet to be established. With overseas market risks impacting operational stability, the domestic market presents a potential buffer against these challenges. However, the fierce competition in the domestic lithium battery and energy storage market complicates this strategy.

PaiNeng Technology is no longer solely focusing on high-end markets in Europe but is also expanding into emerging markets in Southeast Asia and South Africa. Currently, it is primarily selling commercial energy storage, large storage products, and sodium-ion batteries domestically, adopting an Energy Management Contract (EMC) business model tailored to the market's development characteristics.

Despite launching a comprehensive series of commercial energy storage products and achieving some success in scaling market deliveries, the revenue generated from domestic operations has remained modest. Financial reports indicate that from 2020 to 2024, domestic revenue figures have not shown significant growth, primarily due to the prioritization of overseas markets where margins are higher.

In the fiercely competitive lithium battery industry, the advantages of larger players like <b>CATL</b> and <b>BYD</b> have become increasingly pronounced, making it difficult for PaiNeng Technology to gain traction. Consequently, the company has sought alternative routes for breakthrough, initiating efforts in sodium battery development and application since 2021. In 2023, it invested <b>220 million yuan</b> into a <b>1 GWh sodium-ion battery project</b> and acquired stakes in sodium battery cathode material companies to enhance vertical integration.

As of 2024, PaiNeng Technology has begun to deliver sodium-ion battery products at scale. However, with the energy storage market facing intense competition, growth has been stifled. According to the <b>Global Energy Storage Industry White Paper</b>, while industry capacity surged by <b>45%</b> year-on-year, demand growth lagged at <b>18%</b>, further squeezing PaiNeng Technology's operational space.

Amidst the significant downturn experienced over the last three years, the credibility of PaiNeng Technology as the "first stock in energy storage" is being questioned, and the establishment of a new growth curve remains a work in progress. In the current market landscape, maintaining a stable foundation is already a challenge, and the pressure to rebound is mounting.