Domestic industrial and commercial energy storage contributed to new growth, and the revenue of Yuneng Technology continued to hit a record high

On April 23, Yuneng Technology (688348. SH) released its 2023 annual report, during the reporting period, the company achieved operating income of 1.420 billion yuan, an increase of 6.11% over the same period of last year, and net profit attributable to shareholders of listed companies of 220 million yuan.

Affected by the phased overcapacity and high inventory in the photovoltaic industry, the sales of inverters of Yuneng Technology were affected to a certain extent during the reporting period. However, it is worth mentioning that the industrial and commercial energy storage products in the domestic market have achieved a breakthrough of zero, becoming a new growth point for the company, and the company's revenue level has remained stable and rising.

Continue to increase R&D investment

The company is mainly engaged in the R&D and industrialization of module-level power electronics technology in distributed photovoltaic power generation systems, providing distributed photovoltaic + energy storage full-scenario application solutions with microinverters as the core, and the company's products include microinverters, module-level shutdowns, energy storage systems, EMA databases and intelligent operation and maintenance platforms.

In 2023, Yuneng Technology will increase its investment in R&D and marketing. During the reporting period, the company's R&D investment totaled 105 million yuan, and the total R&D investment accounted for 7.37% of the operating income, an increase of 3.27 percentage points over the previous year.

After years of R&D and innovation accumulation, Yuneng Technology has formed a wealth of scientific and technological achievements in power electronics technology, accumulated 26 core technologies with independent intellectual property rights, and by the end of 2023, the company has 136 authorized patents, including 84 invention patents. During the reporting period, the company added 4 authorized invention patents (including 1 transfer), 4 utility model patents and 9 software copyrights.

During the reporting period, for the European DIY small household photovoltaic scene, Yuneng Technology launched a new upgrade product EZ1 micro-inverter series products, with an input current of up to 20A, suitable for 182 and 210 high-power components, and at the same time adopted two communication modes of Wi-Fi and Bluetooth, making the construction, commissioning, operation and maintenance of the system more convenient.

In terms of industrial and commercial energy storage products, Yunergy has mastered core technologies such as string inverter control technology and string energy storage integrated cabinet system integration technology, and has developed Ocean200L and Ocean400L system products on this basis, which have the characteristics of high safety, high reliability, high efficiency and friendliness. Among them, the Ocean series 400L string liquid-cooled energy storage system products made their debut at the 19th China (Jinan) International Solar Energy Utilization Conference in March 2024, becoming one of the most high-profile new products at the exhibition.

In terms of market expansion, Yuneng Technology aims to improve the company's marketing network system with the goal of "two-wheel drive in domestic and foreign markets, and coordinated promotion of the integration of photovoltaic and storage". While maintaining the advantages of the European and American markets, Yunergy has increased its efforts to develop the domestic market, and has achieved zero breakthroughs in industrial and commercial energy storage business by providing AES modular solutions including air-cooled/liquid-cooled energy storage systems, 3S, etc., to meet the application needs of various energy storage scenarios.

At the same time, Yuneng Technology continues to improve the development and delivery capabilities of large projects, and promotes the certification of energy storage products at home and abroad. At present, there are more than 10 industrial and commercial user-side projects with a single unit of more than 50MWh, with a cumulative installed capacity of not less than 500MWh.

High-quality development of photovoltaic and storage integration

The integration of photovoltaic and storage mainly refers to the addition of energy storage modules in the inverter system, so as to integrate the functions of photovoltaic grid-connected power generation and energy storage power station. Under the general trend of integrated development of photovoltaic and energy storage, in 2023, Yuneng Technology will complete the latest corporate strategic layout planning, and determine the three major optical storage industry ecology with microinverters as the core: DIY micro-optical storage, residential optical storage, and industrial and commercial optical storage, and become a full-scenario solution provider of "distributed photovoltaic + energy storage".

At the 19th China (Jinan) International Solar Energy Utilization Conference 2024, Yunergy Technology showcased the latest micro-optical storage EZ1+River1600 solution. The DIY micro-optical storage system is composed of 20A high-current Wi-Fi + Bluetooth dual-mode microinverter EZ1 series, energy storage equipment River1600 and other products, which has significant advantages such as 1.6kWh ultra-large capacity, plug and play, safety and reliability, strong adaptability, and long service life.

The residential photovoltaic storage system is composed of 20A high-current microinverter QT2 and DS3 series, three-phase energy storage inverter ELT series, APbattery battery and other products, using AC coupling solutions, suitable for photovoltaic stock and new markets. For industrial and commercial photovoltaic storage scenarios, Yuneng Technology showcased the latest Ocean series string liquid-cooled energy storage system + three-phase 20A high-current microinverter technology solution.

It is worth mentioning that in the context of the "dual carbon" goal, distributed photovoltaic has developed rapidly, but at the same time, a large number of photovoltaic safety problems have emerged. To this end, since 2022, Yunergy Technology has jointly launched the Distributed Optical Storage System Safety Quality Improvement Initiative with relevant units in the industry for many times. In August 2023, Yuneng Technology, together with GoodWe and other units and institutions, jointly launched the Distributed Optical Storage Security Quality Improvement Initiative, and signed the "Distributed Optical Storage Security Quality Improvement Initiative".

Yuneng Technology said that in the future, it will focus on building a development system of overseas and domestic two-wheel drive and three-way synergy of optical storage and charging, explore and practice the integrated development of optical energy and storage, build a leading edge in the field of micro-inverter, energy storage and other technologies, and lay the foundation for deepening the integrated business layout of domestic optical energy storage.

Cut into the operation of power stations to create the third growth curve

During the reporting period, according to the market prospects, development trends of the optical storage industry and the company's future strategic development direction, Yuneng Technology increased the investment in self-invested photovoltaic storage projects, and strived to achieve the company's third growth curve.

In October 2023, the company's board of directors deliberated and passed two proposals, agreeing that the company should use 200 million yuan of over-raised funds to invest in the construction of "Yuneng 150MWH distributed energy storage power station construction project", and use 100 million yuan of over-raised funds to increase capital to Jiaxing Yuzhong New Energy Technology Co., Ltd., a wholly-owned subsidiary, to build a new "Yuneng 30MW distributed photovoltaic power station construction and operation project".

Through the new power station project, Yuneng Technology seizes the development opportunity of the photovoltaic and energy storage industry, cuts into the power station operation track, meets the market demand of downstream users, drives the shipment of the company's optical storage products, and expands the company's profit points, thereby promoting the rapid growth of the company's performance, which will have a positive impact on the company's long-term development.

For the 2023 performance of Yuneng Technology, the research report of Soochow Securities pointed out that the company's 2023 micro-inverter product shipments will be basically flat year-on-year, and in 2024, with the completion of inventory removal, demand is expected to return to high growth, and it is expected that the annual micro-inverter shipments will increase by more than 30%, while industrial and commercial reserves are expected to double. In addition, due to the slowdown in market demand, the extension of the destocking cycle, the company's credit and asset impairment losses in 2023 and other factors have lowered the company's net profit.