Sungrow 1Q26 First Take: results missed market expectations again, with both revenue and profit down YoY. The only bright spot was GPM, which rebounded QoQ from last quarter's record low.
1) Q1 revenue was RMB 15.6bn, down 18% YoY and well below the street's RMB 21.2bn. Weak domestic PV inverter shipments amid soft demand and shipment timing in storage (potential cell shortages) likely weighed on revenue. Industry-wide price competition also pressured the top line.
2) GP was RMB 5.2bn, down 22.6% YoY, driven by the revenue shortfall. However, GPM recovered QoQ from the record low of ~23% in the prior quarter. This likely reflects a better order mix, with a higher share of higher-margin overseas storage, and earlier raw-material cost inflation being passed through to end prices.
3) That said, profits were severely eroded by the smaller revenue base and wider FX losses on currency volatility, leading to a sharp YoY decline in attributable NP. Q1 attributable NP was RMB 2.3bn, down 40% YoY. $Sungrow Power Supply(300274.SZ)
