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

Established just six years ago, this Wuxi-based energy storage company is set to go public in Hong Kong, boasting an impressive annual revenue of 1 billion yuan and a valuation of 6 billion yuan. This remarkable achievement is attributed to its ability to install the “strongest brain” in energy storage devices, allowing it to carve out a significant market share in a fiercely competitive landscape. This company, known as Guoxia Technology, is on the verge of listing on the Hong Kong Stock Exchange.

On April 28, 2025, Guoxia Technology submitted its prospectus for a mainboard listing, with Everbright Securities International serving as the sole sponsor. Prior to this submission, the company secured a 30 million yuan investment from Shenzhen Ningqian, bringing its latest valuation to 6 billion yuan. Marketed as an “AI-driven energy innovation” firm, Guoxia Technology reported revenues of 142 million yuan, 314 million yuan, and 1.026 billion yuan for the years 2022 to 2024, respectively, achieving a staggering compound annual growth rate of 168.9%. However, it faces a profitability challenge as its gross margin plummeted from 25.1% to 15.1% due to industry overcapacity and price wars.

Guoxia Technology’s transition from early reliance on European household storage subsidies to a focus on large-scale storage solutions, which now account for over 76% of its business, reflects the cyclical changes in the industry. The company’s emphasis on technological innovations such as its “AI scheduling platform” and “customized chips” underscores its commitment to integrating AI with energy storage.

Low Production, High Dependence on Procurement

While industry giants like CATL and Sungrow Power invest billions in factories and inverter production, Guoxia Technology has taken a different approach: it does not build factories, manufacture battery cells, or hold heavy assets. This “three-free” model (no factories, no battery cells, no heavy assets) positions it as a unique player in the energy storage sector. In 2024, its intelligent energy storage system solutions accounted for 97.8% of its revenue, serving as the primary driver of growth.

Operating more like a system integrator, Guoxia Technology focuses on lightweight assets, dedicating its core resources to research and platform development rather than large-scale hardware manufacturing. Although it has a smart manufacturing base in Wuxi for system integration and testing, its production capacity was limited to 72.8 MWh in 2022, projected to increase to 2363.9 MWh in 2024. However, this facility primarily supports system integration and customized production, rather than full industry chain coverage. The company relies heavily on external suppliers for core components, with battery cell procurement costs accounting for 68% of total costs from 2022 to 2024.

Initially, Guoxia Technology’s household energy storage products were manufactured through partnerships with external OEMs, enabling rapid product delivery to meet European market demands. By leveraging standardized energy storage hardware and its proprietary AI energy management system, the company was able to respond promptly to the surging demand in the European household storage market.

Shifting Focus: From Household Storage to Large-Scale Solutions

As the European household storage market began to decline, Guoxia Technology swiftly pivoted its strategy, transitioning from easy profits to aggressive competition in the large-scale storage sector within just nine months. The company’s rapid growth from 2020 to 2022 was fueled by generous subsidies in the European household storage market, driven by the region’s desire to reduce dependence on Russian gas. During this period, Guoxia Technology capitalized on the boom, achieving a top-ten global shipping volume with modular storage cabinets.

However, the favorable conditions abruptly changed when European governments could no longer sustain subsidies, and lithium carbonate prices plummeted from 600,000 yuan/ton to 80,000 yuan/ton, leading to a sharp decline in energy storage system prices. Recognizing the impending crisis as subsidy cuts threatened its business model, Guoxia Technology shifted its focus back to the domestic market. With new regulations mandating energy storage for wind and solar farms, the company entered the large-scale storage arena, which is already crowded with competitors. Nevertheless, it managed to carve out a niche, with large-scale storage revenue soaring to 785 million yuan in 2024, representing 76.6% of its total revenue, while domestic income rose to 79.9%.

Despite this success, the cost of competition has been steep, with gross margins declining from 24.5% in 2022 to 15.1% in 2024. The contraction of the European market has compelled Guoxia Technology to redirect its strategic focus towards Africa, where new growth opportunities are emerging. By 2024, its African operations generated 102 million yuan, accounting for 9.9% of total revenue. This strategic shift highlights both the necessity and inevitability of adapting to the changing landscape, as the potential for growth in Africa offers a chance to escape the saturated European market.

The Dual Nature of a Light Asset Model

While Guoxia Technology successfully transitioned from European household storage to domestic large-scale solutions in nine months, its distinguishing factor lies not in the assembly of energy storage units but in the different market segments it targets. The prospectus highlights its core positioning as leveraging AI technology to drive the intelligence of energy storage systems. Guoxia Technology asserts that its core assets stem from its software platform and technical services.

Through its proprietary Safe ESS safety management system and Hanchui iESS scheduling platform, the company integrates AI algorithms into the lifecycle management of energy storage devices. This raises the question: what exactly does Guoxia Technology offer? Unlike traditional energy storage companies that primarily sell hardware, Guoxia Technology combines hardware with software services, adopting a profit-sharing model based on system efficiency and value-added services.

The goal is to integrate and assemble procured or self-produced products onto its “system platform” and sell bundled solutions to customers. For instance, its AI system can monitor real-time electricity price fluctuations, leveraging data from weather forecasts and factory energy usage patterns to optimize charging and discharging times. In one project, the AI system identified a pattern of equipment maintenance during weekends, allowing the facility to store an additional 20% of energy on Friday nights to maximize profits during peak hours on Mondays.

However, similar AI+storage solutions are not unique to Guoxia Technology. For instance, the Envision Energy EN 8 Pro system utilizes an AI weather model to predict electricity price peaks with an accuracy rate of 80% to 90%. Additionally, a 7.5 MWh storage system deployed at the Nantong Wotai Park reduces electricity costs by 5% annually through AI scheduling combined with photovoltaic generation.

This light asset model has its limitations. To maintain a competitive edge, Guoxia Technology must consistently invest in research and development. However, in 2024, its R&D expenditures accounted for only 3.1% of revenue, significantly lower than leading companies like BYD and CATL, and even below many second-tier manufacturers. Should it fail to keep pace with technological advancements, the substantial investments in its intelligent ecosystem could become sunk costs.

The allocation of funds from its IPO also reflects Guoxia Technology’s awareness of its core strengths, with 50% of the raised capital earmarked for AI R&D and technological breakthroughs. In addition to Guoxia Technology, a growing number of “AI-native” energy storage companies are reshaping the competitive landscape. For example, Ronghe Yuan Storage has implemented its Ronghe Baize system, which monitors over 20 million battery cells, reducing operational costs by 30%. Meanwhile, Lingchu Yuneng has developed an integrated platform that can respond within 15 seconds, enhancing arbitrage opportunities.

Guoxia Technology must remain vigilant, as the light asset model can yield rapid growth during industry expansion, but in the long term, a lack of control over core hardware like battery cells could reduce the company to a low-value system integrator. Furthermore, if it fails to innovate its software technology ahead of competitors, it risks losing bargaining power and facing weak ecological barriers. The current competition in the energy storage sector has shifted from a race for market share to a battle for profitability across the entire supply chain.