Sungrow Power Supply H1 Net Profit Falls Over 30% to 5.26 Billion Yuan; Proposes 6.4 Yuan Dividend Per 10 Shares — BigGo Finance

China’s Sungrow Power Supply (300274.SZ), a leading photovoltaic inverter and energy storage systems maker, disclosed its 2026 semi-annual report on the evening of August 28, showing declines in both total operating revenue and net profit for the first half, with net profit attributable to parent company owners falling more than 30% year-on-year. The company also announced plans to distribute a cash dividend of 6.4 yuan per 10 shares (tax inclusive) to all shareholders, with no capital reserve conversion into share capital and no bonus share issuance.

According to the report, the company achieved total operating revenue of 30.91 billion yuan (approximately $4.6 billion) during the reporting period, down 28.99% from the prior-year period. Net profit attributable to parent company owners was 5.26 billion yuan (approximately $781.9 million), down 32.01% year-on-year. Basic earnings per share came in at 2.56 yuan, down 31.37%.

On a quarterly basis, second-quarter performance pressure was more pronounced. The company posted second-quarter total operating revenue of 15.35 billion yuan (approximately $2.3 billion), down 37.33% year-on-year, while net profit attributable to parent company owners was 2.97 billion yuan (approximately $441.2 million), down 24.08%.

Despite the contraction in revenue and profit scale, the company’s profitability metrics showed improvement. First-half operating costs totaled 19.81 billion yuan (approximately $2.9 billion), down 30.68% year-on-year—a decline slightly larger than the revenue drop—pushing gross margin to 35.92%, up 1.56 percentage points year-on-year. The company explained in the report that the gross margin improvement was primarily driven by product mix optimization, while the decline in net profit attributable to parent company owners was mainly dragged down by the shrinking revenue scale.

Expense items showed a divergent pattern. Selling expenses totaled 2.13 billion yuan (approximately $316.7 million), down 7.00% year-on-year, consistent with the revenue contraction. R&D expenses, however, rose rather than fell, reaching 2.1 billion yuan (approximately $311.5 million), up 2.85% year-on-year, indicating that the company maintained a relatively high level of technology investment even amid earnings pressure.

The abnormal fluctuation in financial expenses was a notable feature of the current-period financial statements. First-half financial expenses amounted to 368 million yuan (approximately $54.7 million), a sharp year-on-year increase of 239.94%. The company attributed this change primarily to increased foreign exchange losses resulting from the depreciation of the euro and the U.S. dollar. For a company with a relatively high proportion of overseas revenue, the impact of exchange rate fluctuations on the income statement was concentrated in this period.

On the cash flow front, net cash flow from operating activities was 3.73 billion yuan (approximately $555.3 million), up 8.75% year-on-year, achieving positive improvement despite declining profits and reflecting the company’s steady management of collections and working capital.

From an industry perspective, after a period of rapid expansion, China’s photovoltaic supply chain has entered a deep adjustment phase since 2025, with module prices continuing to decline and industry inventories remaining elevated. While the inverter and energy storage segments have shown greater resilience than the module segment, overall demand growth has also slowed. As a leading global supplier of photovoltaic inverters and energy storage systems, Sungrow Power Supply’s performance fluctuations to some extent reflect changes in industry cyclical conditions.

For investors, the implementation of this interim dividend plan carries signaling significance. The 6.4 yuan per 10 shares cash payout (tax inclusive), maintained even against a backdrop of net profit declining more than 30% year-on-year, reflects the company’s emphasis on shareholder returns. However, whether the dividend intensity can be sustained still depends on the pace of industry demand recovery in the second half and the effectiveness of the company’s management of foreign exchange risks in overseas markets.

Market observers noted that Sungrow Power Supply’s second-quarter revenue decline widened to 37.33%, warranting attention to the delivery pace of overseas utility-scale energy storage projects and the impact of price competition in China’s domestic tenders on subsequent quarters. At the same time, the counter-trend improvement in gross margin indicates that product mix upgrades are still progressing. If revenue stabilizes in the second half, the positive effects of profitability improvement may be further unleashed.