Shenghong Co. to Hold Performance Briefing on April 9 for Investor Participation

Shenghong Co., Ltd. announced on April 9, 2025, that it will hold a performance briefing on the same day. The company responded to several questions raised by investors during the meeting.

Questions:

1. V2G Technology and Policy Opportunities: What is the progress of the company’s participation in the first batch of V2G pilot projects in cities like Shanghai and Shenzhen, particularly regarding breakthroughs in bi-directional charging and vehicle-to-grid communication? What is the commercial path for the large-scale application of V2G technology and the status of order conversion?
2. Competition and Profitability in Energy Storage: In light of the price war pressures in the energy storage industry, how does the company plan to enhance product premiums through modular designs and multi-branch energy storage inverters? What are the company’s plans for new scenarios such as integrated solar-storage-charging and virtual power plants?
3. Overseas Charging Stations and Ultra Charging Technology: What is the status of the collaboration with BP, and what are the certification and promotion plans for the 44MW Ultra Charging Pile “Tianji Series” in the European market? What measures are being taken to optimize local service capabilities abroad (e.g., supply chain, certification)?
4. Financial and Strategic Balance: Can you confirm the sustainability of the high dividend policy and its impact on R&D investment and new businesses like V2G? What is the status of the commercialization of R&D outcomes in SiC and AI energy trading platforms?
5. Industry Risks and Management: What impact do inventory reductions in European household storage and U.S. interest rate hikes have on overseas operations, and what are the company’s strategies to address these? Also, how do equity incentive adjustments affect core team stability and the retention of technical talent?
6. Swapping and AI Synergy: What are the technological advantages and customer collaborations in the battery swapping business for heavy trucks and passenger vehicles? What progress has been made in collaboration with leading companies regarding AI computing infrastructure (e.g., power quality in data centers)?

Responses:

Thank you for your interest in our company. We place significant emphasis on the research and development of new power system technologies and the exploration of application scenarios. In the V2G field, we have completed the technical and product preparation based on our solid foundation in power electronics. Currently, V2G commercial applications are still in the industry validation stage. We will continue to focus on policy direction and market demand while actively participating in the construction of the industry ecosystem to promote the practical application of relevant solutions.

Regarding energy storage, our products effectively address industry pain points by continuously improving energy efficiency and system reliability. In response to market changes, we maintain a strategy of differentiated competition driven by technological innovation and enhance product value through multi-dimensional technology integration and scenario customization. In the commercial and industrial energy storage sector, we are advancing various new business models while deepening technology iterations and scenario integration capabilities.

In the charging and swapping sector, we are following a global strategy, leveraging our existing product systems to meet diverse regional and situational needs. Our products have received local certifications in multiple global markets, such as the certification under the German Measurement Act obtained in the second half of 2024, allowing us to enter the German market under our own brand. We are continually expanding application scenarios and increasing our market share in overseas regions.

Strategically, we are proactively addressing various market uncertainties. For instance, regarding recent tariff events, we have established a partnership with a professional OEM in Malaysia for local production, and this project is progressing smoothly, with production preparations expected to be completed by the end of May 2025. We are also preparing for other potential uncertainties by proactively laying out our plans.

Regarding cash dividends, we aim to continue delivering long-term investment returns to shareholders while ensuring normal operations and aligning with our business development goals.

Recent Investor Engagement: The company has recently been surveyed by over 70 investment institutions, primarily focusing on our operational situation for 2024 and industry development. There are currently no major adjustments to the company’s business.

Advantages in AIDC: We have long focused on the research and innovation of power electronics technology, continuously optimizing our product layout based on the demands of intelligent computing centers. Our industrial power supply products have a wide application scope, including active filters, static reactive power generators, three-phase imbalance adjustment devices, dynamic voltage regulators, low-voltage line voltage regulators, uninterruptible power supplies, laser power supplies, and single crystal silicon furnace heating power supplies. These products primarily solve industrial power supply issues related to harmonic distortion, phase imbalance, voltage dips, and sudden power outages, thereby improving the quality and safety of power use.

In the future, we will continue to pay close attention to industry trends and enhance our comprehensive competitiveness through innovative R&D and channel optimization, aiming to become one of the key suppliers of comprehensive power solutions for intelligent computing centers.

International Collaborations: Our revenue for 2024 reached approximately 3.036 billion yuan, with overseas revenue around 438 million yuan. Direct exports to the U.S. account for about 56 million yuan, representing only 1-2% of our total revenue, which has a minimal impact on our overall business. We are prepared for uncertain policy changes and have proactively established plans.

Profitability: For 2024, our total operating revenue was 3,036,170,730.45 yuan, an increase of 14.53% year-on-year. Our total profit was 462,431,817.03 yuan, up by 1.42%, and the net profit attributable to shareholders was 428,975,205.06 yuan, a rise of 6.49%. Detailed operational data can be found in our annual report published on the Giant Tide Information Network.

Future Growth Points: Looking ahead, we will continue to focus on our core business and leverage our solid foundation and technological advantages in the power electronics industry. We aim to absorb and integrate advanced technologies and resources within the industry, enhance our learning of cutting-edge technologies, and continuously develop new processes, technologies, and products while expanding our client base to solidify our position in traditional industries. We will also enhance our market share in energy storage globally and explore new growth points in high-end sectors, optimizing our product and market structure.

Industry Performance: In 2024, our total operating revenue was 3,036,170,730.45 yuan, reflecting a year-on-year increase of 14.53%. The industry’s landscape and operational data can be referenced in our annual report on the Giant Tide Information Network. For comparative performance with peers, you may refer to other publicly listed companies’ periodic reports.

Charging Station Profit Margins: We consistently adhere to a strategy of enhancing product competitiveness through technological innovation. In the charging station sector, we continue to optimize product energy efficiency and leverage our technological advantages to increase the proportion of high-value-added products. We are actively promoting globalization and enhancing supply chain efficiency through localized service capabilities to improve customer value.

Future Development Prospects: We remain attentive to global energy transformation and the construction of new power systems. In terms of power quality, it is a critical infrastructure supporting the development of high-end manufacturing and intelligent computing centers, directly influencing production efficiency, product quality, and operational stability. With expanding industry demand, the requirements for high-quality development are also increasing. In the charging and swapping sector, as domestic new energy vehicle ownership rises, charging infrastructure is improving, alleviating supply-demand conflicts in the public domain, with potential growth in fast-charging penetration. The Chinese charging station market is transitioning from focusing on construction speed to emphasizing high-quality development, with government policies encouraging advanced construction, which is expected to further expand market share.

In the energy storage sector, countries are rapidly transitioning their energy systems towards decarbonization; the large-scale use of renewable energy alongside the clean transformation of conventional energy will be fundamental trends in energy development. New energy storage will become a key support for achieving carbon peak and carbon neutrality, providing strong policy backing for rapid industry growth. The demand for power batteries and energy storage batteries will continue to grow rapidly as the penetration of new energy vehicles increases and carbon reduction goals advance, with lithium batteries remaining the mainstream technology for some time. The global market for lithium battery testing and formation equipment is expected to continue growing at a similar pace.

For further information about our industry conditions, please refer to our annual report on the Giant Tide Information Network, specifically in the section titled “Management Discussion and Analysis” and “Industry Conditions During the Reporting Period”.

Shenghong Co., Ltd. specializes in the application of power electronics technology in industrial power supplies and the new energy sector, providing efficient and safe power solutions for high-end manufacturing, data centers, energy, and rail transit. The company’s 2024 annual report indicates that our main revenue reached 3.036 billion yuan, a year-on-year increase of 14.53%, with a net profit attributable to shareholders of approximately 429 million yuan, also showing a year-on-year rise of 6.49%. In the fourth quarter of 2024 alone, our main revenue was 941 million yuan, reflecting a 2.49% year-on-year increase, and our net profit attributable to shareholders was 158 million yuan, an increase of 22.11% year-on-year. The debt ratio is at 50.45%, with financial expenses amounting to 1.7997 million yuan and a gross profit margin of 39.2%. Over the past 90 days, 11 institutions have rated our stock, all recommending a buy. The average target price set by institutions in this period is 45.73.

For detailed profit forecast information: The stock has seen a net outflow of 143 million in financing over the last three months, with a decrease in the financing balance; the securities lending has also seen a net outflow of 145,900 with a reduction in the lending balance. This information has been compiled by Securities Star based on public data and is generated by intelligent algorithms. It does not constitute investment advice.