--- title: "NARADA Power is deeply trapped in a funding chain crisis, with concentrated outbreaks of debt and litigation risks" type: "News" locale: "en" url: "https://longbridge.com/en/news/288921993.md" description: "ST NARADA is deeply trapped in a capital chain crisis, with 157 accounts frozen and an amount involved of approximately 1.625 billion yuan; in the past year, there have been 23 lawsuits and arbitrations, involving 222 million yuan. Due to internal control negative opinions and account freezes triggering risk warnings, the stock price has continued to decline, causing losses to shareholders. The previous expectation of holding 8.9 billion yuan in orders has fallen through, and the performance loss in the first half of the year has expanded, leading to a systemic operational dilemma" datetime: "2026-06-06T05:23:15.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/288921993.md) - [en](https://longbridge.com/en/news/288921993.md) - [zh-HK](https://longbridge.com/zh-HK/news/288921993.md) --- # NARADA Power is deeply trapped in a funding chain crisis, with concentrated outbreaks of debt and litigation risks This report (chinatimes.net.cn) reporter Hu Yawen reports from Beijing Why is a veteran in energy storage with ample orders facing a funding shortage and falling into a systemic operational crisis? Zhejiang NARADA Power Source Co., Ltd. (hereinafter referred to as "ST NARADA", 300068.SZ) recently updated the progress of its stock being implemented with ST status. The announcement shows that ST NARADA has had 157 accounts frozen, with an amount of approximately 1.625 billion yuan frozen, accounting for 115% of its net assets; at the same time, there have been 23 litigation and arbitration cases in the past year, involving an amount of approximately 222 million yuan. More than a month ago, ST NARADA was implemented with ST status due to a negative opinion audit report on internal controls for the 2025 financial report. Subsequently, the company triggered other risk warnings again due to the freezing of its bank accounts. The risks quickly reflected in the stock price. From April 30 to May 7, ST NARADA faced three consecutive 20% limit downs, with the stock price falling from 11.06 yuan/share to 5.71 yuan/share, impacting 98,100 shareholders severely. The concentrated outbreak of risks completely shattered the market expectations that ST NARADA had ample orders and was expected to grow. Back in late October 2025, ST NARADA held 8.9 billion yuan in undelivered orders, and at that time, the company told reporters from the China Times, "The power storage field has begun to scale up, and the company is optimistic about the overseas data center business, expecting good growth in performance in 2026." However, by the first half of 2026, investors were met with a financial report showing expanded losses and ST NARADA entangled in lawsuits, debts, and internal control issues. On June 4, the reporter sent an interview outline to ST NARADA regarding related issues, but had not received a reply by the time of publication. **Order Delivery Blocked** ST NARADA was established in 1997 and went public on the Growth Enterprise Market in 2010. The company has long been deeply involved in the communication energy storage field and once ranked among the top in global data center energy storage battery shipments. As lithium batteries gradually replaced lead-acid batteries, ST NARADA began to promote the "abandon lead for lithium" strategic transformation around 2020, significantly expanding into the lithium energy storage field. From the 2025 financial report, ST NARADA indeed reduced the revenue proportion of the lead battery sector, with the lithium battery sector becoming the largest source of income. In October last year, ST NARADA stated in an investor communication that it had approximately 8.9 billion yuan in undelivered orders at that time, including about 5.5 billion yuan in grid-side energy storage orders and about 1.67 billion yuan in lithium battery orders for data centers. This scale even exceeded its total operating income of 7.471 billion yuan for the year 2025. From a business perspective, ST NARADA does not lack orders. In recent years, ST NARADA has successively won bids for the 1.2GW high-voltage lithium battery data center project from Global Data, a U.S. data center project, a semi-solid energy storage project in the Guangdong-Hong Kong-Macao Greater Bay Area, and several overseas energy storage projects As of the end of the first quarter of 2026, its contract liabilities reached 774 million yuan, further increasing from 548 million yuan at the end of 2025, indicating that the company is still acquiring new order resources. However, the orders have not been smoothly converted into operational results. In response to investors' questions about order execution, the company stated that due to temporary funding constraints, deliveries did not meet expectations. In other words, the issue is no longer on the demand side, but on the funding side. Liu Zhigeng, a well-known tax and financial expert and senior certified public accountant, stated in an interview with the "Huaxia Times" that "the official order conversion rate data at the end of 2025 is not disclosed in the public information, but based on the scale of orders on hand and the current operational crisis, it can be judged that the probability of converting orders on hand into actual deliveries is likely to significantly decrease, with very high uncertainty in conversion and conversion capability severely suppressed by the funding chain crisis." From an industry perspective, the choice to transform into lithium batteries is not problematic. However, this transformation comes with huge capital investments. Financial data shows that 2024 became a significant turning point for the deterioration of ST Nandu's operations. In the first three quarters of that year, the company still achieved a net profit of 247 million yuan, but in the fourth quarter, it suffered a single-quarter loss of 1.744 billion yuan, resulting in an annual loss of 1.497 billion yuan. After entering 2025, the situation further deteriorated. ST Nandu reported a net profit loss of 2.642 billion yuan for the year, with cumulative losses exceeding 4.1 billion yuan over two years. At the same time, ST Nandu's debt-to-asset ratio continued to rise, increasing from about 73% at the end of the first quarter of 2024 to 92.14% at the end of 2025, and further reaching 93.74% at the end of the first quarter of 2026. As of the end of the first quarter of 2026, ST Nandu's current liabilities exceeded current assets by about 3 billion yuan. The auditing agency clearly pointed out in last year's annual report that there is significant uncertainty regarding the company's ability to continue as a going concern. From a business structure perspective, ST Nandu faces dual pressure. On one hand, its once-important subsidiary, Huabo Recycling Resources, has fallen into losses. Due to high raw material prices in the recycled lead industry and compressed profit margins, the company admitted that the related business has fallen into a situation of "production equals loss, more production equals more loss." After two failed asset sale plans, Huabo Recycling Resources announced a complete shutdown of operations in April this year. On the other hand, while the lithium battery energy storage business continues to grow, the industry is experiencing fierce price competition. ST Nandu has actively given up some low-margin orders to control risks, and last year, the lithium battery capacity utilization rate was 65.5%, with profitability not effectively released. **Chain Crisis Erupts** If the funding crisis is the result of long-term accumulation, then the 2025 annual report became the fuse for the concentrated exposure of risks. Xinyong Zhonghe Accounting Firm issued a qualified audit report on ST Nandu's 2025 financial report, along with a negative opinion on internal controls. The auditing agency pointed out that as of the end of 2025, the balance of advance payments to ST Nandu's first supplier reached 365 million yuan, and the related suppliers were involved in large borrowing activities with non-financial institutions and individuals, while ST Nandu had participated as a co-borrower or guarantor, but the related matters did not go through internal approval procedures and were not included in financial accounting and estimated liability recognition In addition, the auditing firm found that ST NARADA's accounts receivable of 183 million yuan from its fifth largest customer had already been overdue, but the auditing firm was unable to obtain sufficient evidence to assess its recoverability. The auditing firm bluntly stated, "ST NARADA has significant deficiencies in internal controls related to fund management, supplier management, related party management, financing management, seal management, information disclosure, customer management, and overdue receivables collection." Two independent directors even voted against the financial report, clearly stating that they could not confirm the authenticity, accuracy, and completeness of the relevant financial information. Issues such as illegal loan guarantees, unverified accounts receivable, and ineffective internal controls quickly shook market confidence. Subsequently, ST NARADA's stock was designated as ST, and the risks of debt and litigation were further exposed. As of May 6, ST NARADA had accumulated overdue debts of 552 million yuan, while its cash and cash equivalents at the end of the first quarter of this year were 491 million yuan. At the same time, due to the forced liquidation or freezing of some shares by the controlling shareholder and related shareholders, market concerns about the company's liquidity have further intensified. In the face of the crisis, ST NARADA is attempting to save itself. On May 13, ST NARADA held an online meeting to answer dozens of questions from investors regarding the company's operational difficulties. On one hand, ST NARADA continues to negotiate debt solutions with creditors, hoping to obtain extensions and refinancing support; on the other hand, the company also plans to supplement liquidity by revitalizing assets, accelerating accounts receivable collection, and introducing strategic investors. However, the reality is equally severe. Currently, the amount applied for freezing against ST NARADA has exceeded 1.6 billion yuan, while the cash and cash equivalents during the same period are limited, and issues such as overdue debts, frozen accounts, and ongoing litigation are still fermenting. Liu Zhigeng believes that "in the A-share market, large amounts of unverified accounts receivable usually indicate doubts about financial authenticity, and there is even a risk of financial fraud and fund occupation. Considering industry practices and ST NARADA's actual situation, the likelihood of recovering large unverified accounts receivable is overall low, likely not exceeding 30%. If strategic investors can be successfully introduced to obtain funds and revitalize orders, it can avoid large-scale defaults and alleviate bankruptcy risks; if the funding issue cannot be resolved, massive default compensation will become the last straw that breaks the company." ### Related Stocks - [300068.CN](https://longbridge.com/en/quote/300068.CN.md) - [GDS.US](https://longbridge.com/en/quote/GDS.US.md) - [09698.HK](https://longbridge.com/en/quote/09698.HK.md) ## Related News & Research - [Did the Trump White House just give Warsh the green light to hike interest rates? 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