Wuxi Energy Storage Company Plans Hong Kong IPO: Achieving 1 Billion in Revenue and 6 Billion Valuation in Just 6 Years

In just six years since its establishment, Guoxia Technology, a Wuxi-based energy storage company, is set to be listed on the Hong Kong Stock Exchange. The company, which boasts an annual revenue of 1 billion RMB and a valuation of 6 billion RMB, has carved out its niche in a fiercely competitive market without building factories or producing battery cells. Instead, it claims to excel by equipping energy storage devices with the “most powerful brain” through advanced AI technology.

Guoxia Technology submitted its prospectus to the Hong Kong Stock Exchange on April 28, 2025, with Everbright Securities International as its sole sponsor. Prior to announcing its intention to go public, the company secured an investment of 30 million RMB from Shenzhen Ningqian, raising its latest valuation to 6 billion RMB. The company, branded as “AI-driven energy innovation,” reported revenues of 142 million RMB, 314 million RMB, and 1.026 billion RMB for the years 2022 through 2024, reflecting an astonishing 168.9% compound annual growth rate. However, Guoxia faced challenges as its gross margin plummeted from 25.1% to 15.1% due to industry overcapacity and fierce price competition.

Initially, the company capitalized on subsidies for residential storage in Europe, but it has since shifted its focus towards large-scale storage, which now accounts for over 76% of its business, with nearly 80% of its domestic market revenue coming from this segment. The emphasis on terms like “AI dispatch platform” and “customized chips” in their prospectus underscores Guoxia Technology’s commitment to integrating AI with energy storage solutions.

1. Limited Production and Dependency on External Procurement

While giants like CATL and Sungrow invest billions in battery and inverter manufacturing, Guoxia Technology has taken a markedly different approach by not building factories or producing battery cells. This “asset-light” model has positioned it as a distinct player in the energy storage sector.

The core of Guoxia’s business matrix is its intelligent energy storage system solutions, which contributed 97.8% of its revenue in 2024. The company operates more like a system integrator, focusing on research and development rather than heavy asset manufacturing. Funds are primarily directed towards AI algorithms, cloud management platforms like SafeESS and HanchuiESS, and IoT technology development. While Guoxia does have a manufacturing base in Wuxi focused on system integration and testing, its production capacity was limited to 72.8 MWh in 2022 and is projected to increase to 2363.9 MWh by 2024.

The company relies heavily on external suppliers for core components, with battery procurement costs constituting 68% of total costs from 2022 to 2024. Its main suppliers include companies like Zhongxin Innovation and Guangdong Lithium, with the top five suppliers accounting for 46% of procurement.

In its early days, Guoxia’s residential energy storage products were primarily manufactured through partnerships with external factories, allowing for rapid production to meet the booming demand in Europe. This model enabled the company to quickly adapt to changing market needs without investing in its own production lines.

2. Transition from Residential to Large-Scale Storage

As the European residential storage market began to decline, Guoxia Technology swiftly pivoted to focus on large-scale storage—a move that took just nine months. The company’s rapid growth was initially fueled by subsidy incentives in the European residential storage market from 2020 to 2022. During this period, European governments incentivized home energy storage to reduce dependency on Russian natural gas, leading to a surge in demand for Chinese storage products.

However, the favorable conditions changed abruptly as subsidies dwindled and the price of lithium carbonate collapsed—from 600,000 RMB per ton to 80,000 RMB. The price of storage systems dropped sharply, prompting Guoxia to recognize the looming threats of a market downturn. With European revenues plummeting, the company refocused its strategy domestically, capitalizing on national mandates that required wind farms and solar power stations to integrate storage solutions.

Despite facing stiff competition in this crowded field, Guoxia’s revenue from large-scale storage skyrocketed to 785 million RMB in 2024, increasing its market share significantly. However, this growth came at a cost, as its gross margin decreased from 24.5% in 2022 to 15.1% in 2024. Furthermore, the contraction of the European market forced Guoxia to expand into Africa, with revenue from African operations reaching 102 million RMB, representing 9.9% of total revenue in 2024.

3. The Challenges of an Asset-Light Model

Guoxia Technology’s rapid transition from European residential storage to domestic large-scale storage distinguishes it from traditional energy storage manufacturers. The company’s core strategy revolves around leveraging AI technology to enhance the intelligence of its energy storage systems. Guoxia claims that its core assets are derived from its software platform and technical services. Through its proprietary Safe ESS management system and Hanchui iESS dispatch platform, the company embeds AI algorithms into the entire lifecycle management of its energy storage devices.

Unlike traditional energy storage companies that rely solely on hardware sales, Guoxia adopts a “hardware plus software service bundle” approach. Its revenue model is based on system efficiency sharing and value-added services. The objective is to integrate and assemble products purchased or self-produced into a comprehensive “system platform” for sale to clients, thereby enabling the storage systems to learn how to optimize costs.

For example, the AI system can monitor real-time electricity price fluctuations and automatically determine the optimal charging and discharging times based on various data inputs. This innovative approach has its challenges, particularly in maintaining a competitive edge in technology while managing costs. Despite this, Guoxia’s R&D expenditure was only 3.1% of its revenue in 2024, significantly lower than that of leading companies like BYD and CATL.

To remain competitive, Guoxia must continue to invest heavily in AI research and technological breakthroughs, with 50% of its IPO fundraising earmarked for these initiatives. A wave of “AI-native” energy storage companies is emerging, reshaping the competitive landscape. These companies are leveraging advanced technologies to enhance operational efficiency and profitability in ways that could threaten Guoxia’s market position.

Ultimately, while the asset-light model allowed Guoxia Technology to scale rapidly during the industry boom, the long-term sustainability of this approach hinges on its ability to maintain control over core hardware and keep pace with technological advancements. Without this, the company risks becoming a low-margin system integrator, facing challenges in bargaining power and ecosystem resilience. The energy storage sector’s competition has shifted from rapid market capture to a more intricate battle for profit across the entire value chain.