Wuxi Energy Storage Company Achieves $1 Billion Annual Revenue and $6 Billion Valuation Ahead of Hong Kong IPO

In just six years since its establishment, this Wuxi-based energy storage company is preparing for an IPO in Hong Kong. With an annual revenue of 1 billion yuan and a valuation of 6 billion yuan, the company has carved out its niche in a highly competitive market. Known as Guoxia Technology, it positions itself not as a manufacturer or battery cell producer, but as a provider of cutting-edge “brain” solutions for energy storage devices.

Guoxia Technology officially submitted its prospectus to the Hong Kong Stock Exchange on April 28, 2025, with Everbright Securities International serving as the sole sponsor. Shortly before this announcement, the company secured an investment of 30 million yuan from Shenzhen Ningqian, pushing its valuation to 6 billion yuan. This Wuxi-based firm, which brands itself with the tagline “AI-driven energy innovation,” reported revenues of 142 million yuan, 314 million yuan, and 1.026 billion yuan for the years 2022, 2023, and 2024, respectively, achieving a remarkable compound annual growth rate of 168.9%.

However, it faces challenges as its gross margin plummeted from 25.1% to 15.1% due to industry overcapacity and fierce price competition. Initially benefiting from European household storage subsidies, Guoxia has shifted its focus toward larger storage systems, which now account for over 76% of its business, with domestic market revenue nearing 80%.

The prospectus highlights the company’s commitment to technologies like “AI scheduling platforms” and “customized chips,” showcasing its determination to integrate AI with energy storage. Unlike many competitors investing heavily in battery cell and inverter manufacturing, Guoxia has adopted a different strategy: it does not build factories or produce battery cells and relies on external procurement for core components. This “asset-light” model makes it a unique player in the energy storage sector.

In its three main business segments, the smart energy storage system solutions contributed an impressive 97.8% of total revenue in 2024, serving as the company’s main growth driver and revenue pillar. Guoxia acts more like a system integrator, focusing on research and development along with platform operations rather than heavy asset manufacturing. The company prioritizes resources for AI algorithms, cloud management platforms (such as SafeESS and HanchuiESS), and IoT technology development.

While Guoxia does have a smart manufacturing base in Wuxi, which focuses on the integration and testing of energy storage systems, its production capacity in 2022 was merely 72.8 MWh, projected to grow to 2363.9 MWh by 2024. This facility primarily supports system integration and customized production rather than offering full supply chain coverage. Core components like battery cells account for 68% of the total cost from 2022 to 2024, with key suppliers including Contemporary Amperex Technology Co., Ltd. and Guangdong Lithium Hua, making up 46% of total purchases from the top five suppliers.

Initially, Guoxia’s residential energy storage products were produced in collaboration with external manufacturers, allowing them to quickly meet European market demands by purchasing standardized energy storage hardware and integrating it with its self-developed AI energy management system. This agile approach enabled the company to respond swiftly to the surging demand in the European residential storage market without having to establish its own production lines.

However, as the business scaled up, the reliance on external manufacturing became a potential vulnerability. The fluctuating costs associated with contract production could impact gross margins, particularly due to the volatility in battery cell prices. As the residential energy storage market in Europe began to decline, Guoxia pivoted toward larger storage solutions, adapting to the new market dynamics within just nine months.

The company’s rapid growth can be traced back to European subsidy incentives from 2020 to 2022, aimed at reducing dependency on Russian natural gas. This led to a surge in household storage subsidies, allowing Chinese energy storage companies, including Guoxia, to capitalize on the opportunity. Guoxia quickly climbed to among the top ten globally in shipments, with 72.1% of its revenue in 2022 coming from Europe.

However, this growth trajectory was abruptly halted when European governments could no longer sustain their subsidy programs, coinciding with a drastic drop in lithium carbonate prices—from 600,000 yuan/ton to 80,000 yuan/ton. As energy storage system prices fell from 1.6 yuan/Wh to 0.8 yuan/Wh, Guoxia sensed impending danger and quickly refocused its strategy back to the domestic market.

With new regulations mandating energy storage at wind and solar facilities, the company found a new battleground in the large-scale storage sector. Despite facing stiff competition, Guoxia carved out a share in this crowded market. By 2024, its large-scale storage revenue skyrocketed to 785 million yuan, representing a rise from 12.2% to 76.6% of total revenue, with domestic market contributions climbing to 79.9%.

However, this aggressive expansion came at a cost, as gross margins declined from 24.5% in 2022 to 15.1% in 2024. As the European market contracted, Guoxia shifted its strategic focus to Africa, where it saw new growth opportunities. By 2024, revenue from Africa reached 102 million yuan, accounting for 9.9% of total revenue. This strategic pivot was both a necessity and a calculated choice, as the diminishing technological premium in Europe opened the door for potential growth in Africa.

As Guoxia successfully transitioned from European household storage to large-scale domestic storage in just nine months, its distinctiveness lies not in the battery cabinets assembled in Wuxi but in its innovative approach. The prospectus emphasizes the core positioning of leveraging AI technology to drive intelligent energy storage systems, suggesting that Guoxia is on a differentiated path with its “AI + Storage” strategy.

The company claims that its core assets lie in its software platforms and technological services. Through self-developed systems like Safe ESS and Hanchui ESS, Guoxia incorporates AI algorithms for comprehensive lifecycle management of energy storage systems. In contrast to traditional energy storage firms that primarily depend on hardware sales, Guoxia bundles “hardware + software services” as its business model, focusing on system efficiency sharing and value-added services.

Guoxia’s objective is to integrate and assemble products, whether purchased or self-manufactured, onto its so-called “system platform” and then package these solutions for clients. The technology’s primary function is to enable energy storage systems to optimize cost savings. For instance, the AI system can monitor real-time electricity price fluctuations and, by analyzing data such as weather forecasts and factory power consumption habits, automatically determine the best times for charging and discharging.

While AI-driven cost reduction is becoming increasingly common in the industry, Guoxia must remain vigilant. The asset-light model can facilitate rapid growth during industry expansion, but without control over core hardware like battery cells, the company risks becoming a low-margin system integrator. Additionally, if its software technology does not keep pace with industry advancements, it may face challenges regarding bargaining power and ecosystem strength.

As the competitive landscape shifts from merely capturing market share to optimizing profitability across the entire supply chain, Guoxia Technology must navigate these challenges carefully to sustain its growth and market position.