In today's era of data explosion and energy transition, energy storage technology is becoming a key force and common intersection for the upgrading of communication and big data equipment and the transformation of the global energy structure.
Recently, Shuangdeng Group Co., Ltd. (hereinafter referred to as "Shuangdeng Group"), a global leader in energy storage business in the field of big data and communications, submitted a listing application to the Hong Kong Stock Exchange, with CICC, CCB International and China Thailand as joint sponsors.
Deeply engaged in the energy storage business in the field of big data and communications, it has a global leader position
Founded in 2011, Shuangdeng Group is a company focusing on energy storage business in the field of big data and communication on a global scale. Shuangdeng Group's product line covers lithium batteries and lead-acid batteries, of which lithium batteries are mainly lithium iron phosphate batteries, and lead-acid batteries include various types.
With its outstanding performance in the fields of communication base station energy storage, data center energy storage, and power energy storage scenarios, Shuangdeng Group has established a leading position in the global energy storage market. According to the prospectus, in 2023, Shuangdeng Group's shipments will reach 5.3 GWh, ranking first among global communication and data center energy storage battery suppliers, with a corresponding market share of 10.4%.
In the field of communication base station energy storage, Shuangdeng Group has established a solid cooperative relationship with many of the world's top communication operators and equipment manufacturers, and its products continue to expand their market share in the world. According to the prospectus, Shuangdeng Group ranks first in the world in terms of shipments in the communication base station energy storage market, accounting for 9.7% of the global market share.
In the data center energy storage market, shipments accounted for 12.5% of the global market share. With the rise of artificial intelligence and big data, the company has kept up with market demand and established partnerships with a number of large technology companies and data center operators.
Shuangdeng Group has a high-quality and loyal customer base in the above two major segments.
Specifically, the company's customers include five of the world's top 10 telecom operators and equipment vendors, nearly 30% of the world's top 100 telecom operators and equipment vendors, as well as China's top five telecom operators and equipment vendors, 50% of China's top 10 self-owned data center companies, and 60% of China's top 10 third-party data center companies. In 2021, 2022 and 2023, the average length of service to the company's top five customers was more than nine years.
In addition, the company has also achieved good results in power energy storage scenarios, successfully seizing the market opportunities brought by large-scale grid energy storage, commercial and residential energy storage, and its products have begun to be applied globally, and overseas energy storage projects include Cambodia, Mongolia, Guinea, Central Africa, etc.
In the power storage projects in different regions of China, the company has also done a good job. Among them, the company successfully participated in the development of the State Grid Zhangbei Energy Storage System Project, which is the world's largest new energy power station in terms of installed capacity since the commencement of operation in 2011 in terms of installed capacity.
The financial performance showed a trend of rapid growth, and stability and balance continued to be released
According to the prospectus, Shuangdeng Group has achieved rapid growth in the past few years. The Company's revenue increased from RMB2.440 billion in 2021 to RMB4.260 billion in 2023, with a compound annual growth rate of 32.1%. During the same period, the compound annual growth rate of gross profit reached 371.1%.
The company's gross profit margin recorded 7.5%, 16.9% and 20.3% respectively from 2021 to 2023, forming a significant upward trend year-on-year.
In addition, in terms of profitability, the Company successfully turned losses into profits, from a net loss of RMB53.7 million in 2021 to a net profit of RMB385.2 million in 2023. The cash flow from operating activities for the corresponding period also changed from negative 200.2 million yuan to 907.2 million yuan.
From 2021 to 2023, the cash at the end of the book period recorded 99.0 million yuan, 270.3 million yuan and 479.0 million yuan respectively, which also showed a similar growth trend to revenue, profit and cash flow, further verifying the reliability of the growth of financial performance.
A series of strong financial performance not only reflects the market competitive advantage of Shuangdeng Group in the industry, but also fully shows that the company is building a solid financial foundation for its future expansion and R&D investment.
It is worth noting that in recent years, the proportion of the company's top five customers in the company's total revenue has gradually decreased. According to the prospectus, at the end of the first quarter of 2021-2023 and 2024, the company's top five customers accounted for 45.0%, 54.2%, 46.1% and 35.7% of the total revenue, respectively, and the single largest customer accounted for 15.4%, 24.3%, 21.3% and 10.0% of the total revenue in the same period.
It not only shows that the company is more diversified in customer distribution, reduces its dependence on a single customer, but also improves the company's financial stability, thereby making Shuangdeng Group's revenue sources more balanced.
Future development strategy: condense several key factors for the rapid development of Shuangdeng Group's business
Behind the financial growth of Shuangdeng Group, in addition to the significant market leadership, there are several key factors that drive the rapid development of Shuangdeng Group's business, and these factors are actually synergistic and interlinked.
It is worth noting that the company's future development strategy, which was first proposed in its prospectus, highly summarizes and integrates these key factors.
First of all, technological innovation is an extremely important aspect.
Shuangdeng Group adheres to scientific and technological innovation as the driving force for enterprise development, and has embarked on an open road of scientific and technological innovation. The company has continuously invested in upgrading the company's production and R&D equipment, and has a high-tech working environment and R&D equipment, such as United States Arbin's BT2000 battery test system, United Kingdom Solartron potentiostat, etc., which effectively enhance the company's independent innovation ability.
Shuangdeng Group has also formulated a clear future development strategy, saying that the company will continue to increase R&D investment and promote product technology innovation and upgrading to meet the market demand for high-performance and high-safety energy storage products.
In addition, Shuangdeng Group also signed a strategic cooperation agreement on technology development with Dalian Institute of Chemical Physics to jointly study the topic of battery mechanism model, and use AI and big data technology to conduct in-depth research on energy storage system fault warning and battery status prediction technology, so as to effectively solve customer pain points and create value for customers.
Secondly, there are product advantages. Shuangdeng Group has a rich product line, which can meet the differentiated needs of different customers such as communication base stations, data centers, household energy storage, and power energy storage. The company has a layout in the field of lithium-ion batteries and lead-acid batteries, and meets the different needs of the market with its product advantages. In the company's future development strategy, it is also mentioned that the layout of the product line is that Shuangdeng Group will continue to optimize the product structure of lithium batteries and lead-acid batteries, improve the energy density and cycle life of products, and reduce costs.
Moreover, it is inseparable from the expansion of production capacity. In order to meet the expected growth in battery demand, Shuangdeng Group has continued to expand its production capacity in the past and in the future. The company already has a high-tech working environment and R&D equipment, and has established a lithium-ion battery materials laboratory. The company's investment in the field of lithium-ion batteries has also made the sales of lithium-ion batteries continue to increase in the absolute amount of the company and the proportion of total revenue.
In addition, the company has always put its business and products overseas in an important strategic position, such as the previously mentioned power energy storage projects in Cambodia, Mongolia, Guinea, Central Africa and other places. The company's future development strategy also includes the plan to go overseas, and the company will continue to actively expand overseas markets and increase its global market share by establishing more cooperative relationships and sales networks.
In addition to going overseas, actively exploring the diversification of energy storage technology landing scenarios has also become an important source of diversification of the company's business income sources. For example, the company's development strategy mentions exploring new applications of energy storage technology in new energy, smart grids and other fields to promote the diversification of the business.
On the growth track: the rapid development of the global and Chinese energy storage market
With the global emphasis on clean energy and sustainable development, the energy storage market is ushering in unprecedented development opportunities.
According to the Frost & Sullivan report, the cumulative global energy storage generator capacity is expected to increase from 478.5 GWh in 2023 to 6,393.0 GWh in 2030, with a compound annual growth rate of 44.8%.
It also expects the global energy storage market to grow from 157.7 GWh in 2023 to 1,677.0 GWh in 2030, at a CAGR of 40.2%.
Growth is particularly significant in China, where the energy storage market in terms of new installed capacity will further increase from 48.4% of the global market (2023) or 52.2% by 2030.
It can also be seen that China will continue to consolidate its leading position in the field of global energy storage installation in the future.
Facing the future, the rapid growth of the global energy storage market, especially the golden period of the energy storage industry dominated by the development of the Chinese market, is providing a broad market space for the development of Shuangdeng Group.
In depth, the rapid development of communication networks and data centers, the acceleration of energy transition, the support of regulatory policies, and the continuous progress and cost reduction of energy storage technology are all important factors driving the rapid growth of the entire energy storage market.
(1) The industry demand for communication networks and data centers is strong
In the field of communications, with the commercialization of 5G technology and the rapid development of the Internet of Things, the number and density of communication base stations are increasing, and the demand for energy storage systems is also rising. With its deep technical accumulation and rich experience in the field of communication base station energy storage, Shuangdeng Group is expected to occupy a favorable position in this market.
As the infrastructure of the digital economy, the demand for energy and the dependence on energy storage solutions are also growing, so Shuangdeng Group's layout in the field of data center energy storage will enable it to seize this market opportunity and achieve sustainable business growth.
(2) The energy transition provides a strong boost
The global energy transition, especially the shift to renewable energy, is another important factor driving the development of the energy storage industry. The integration of intermittent energy sources such as wind and solar energy into the grid requires energy storage systems to balance supply and demand and ensure the stability of energy supply. Shuangdeng Group's technologies and products in the power storage scenario will play an important role in this transformation process.
(3) Regulatory and policy support
The government's supportive policies for the energy storage industry, such as tax incentives, subsidies, R&D funding, etc., provide a good policy environment for the development of the energy storage market. In the 14th Five-Year Plan, the Chinese government clearly stated that it will accelerate the research and development and industrialization of energy storage technology, which provides a broad space for development for enterprises such as Shuangdeng Group.
(4) Efficiency improvement and cost reduction
Technological advances have led to increased efficiency and reduced costs for energy storage systems, making energy storage solutions more economically attractive. Shuangdeng Group has continuously improved product performance and reduced costs through continuous R&D investment, enhancing its competitiveness in the market.
The author judges that with Shuangdeng Group's deep accumulation in the field of energy storage and strong comprehensive leading strength, it is fully expected to achieve a larger share in the future market.
At the same time, in the process of the industry pattern from the current fragmentation to the relative concentration in the future, Shuangdeng Group can also continue to conform to the Matthew effect law of "the strong will always be strong", so as to benefit more fully than its competitors.
Epilogue
In fact, Shuangdeng Group's submission of listing application in Hong Kong is not only a demonstration of the company's own strength, but also an affirmation of the potential of the global energy storage market. On the whole, as a global leader in energy storage business in the field of big data and communications, Shuangdeng Group is expected to have good development potential in the rapid development of the global and Chinese energy storage market in the future, and fully benefit from the rapid growth of the industry/track.
The company's technological innovation capabilities, high-quality customer base, global market layout and stable financial performance provide a solid foundation for its future development. In addition, with the gradual implementation of the company's development strategy, Shuangdeng Group is expected to occupy a more important position in the energy storage market and achieve sustainable growth and development.