SOFARSOLAR Soars 244% in IPO Debut: Solar-Storage Powerhouse Emerges

April 2, 2025 - Sofar Solar(301658.SZ) officially listed on Shenzhen's ChiNext board today, opening at 40 yuan per share—a staggering 239% increase from its IPO price. The stock closed at 40.65 yuan, up 244.49%, with a total market capitalization reaching 16.76 billion yuan ($2.38 billion), marking the highest first-day gain for a new energy stock listing this year.

A Challenging IPO Journey

Sofar Solar's path to an IPO has been anything but smooth. The company initially filed its application in June 2022 and received approval in March 2023. However, the process was suspended four times due to financial data updates and other issues. It wasn't until January 23, 2025, that the company finally submitted its registration and successfully went public in early April.

The IPO was priced at 11.80 yuan per share, with approximately 41.24 million shares issued, raising about 487 million yuan ($69 million). These funds will primarily support new energy product R&D and manufacturing, energy storage system construction, R&D center upgrades, marketing network expansion, and working capital requirements.

The IPO funding target underwent significant adjustments, starting at 1.51 billion yuan, then increasing to 3.51 billion yuan after adding energy storage projects, before finally settling at 1.21 billion yuan—a reduction of over 65%. Market analysts suggest these adjustments may be related to tightening regulatory policies, declining performance pressures, and low capacity utilization rates.

Regarding ownership structure, before the IPO, controlling shareholder Xu Tao directly and indirectly owned 52.75% of the company while controlling 67.26% of voting rights through a multi-layered structure. Notably, CATL (Contemporary Amperex Technology Co. Limited), the lithium battery giant, holds a 3% stake in Sofar Solar through a wholly-owned subsidiary and serves as the company's core battery cell supplier.

source: Sofar Solar

Integrated Solar and Energy Storage Strategy

Founded in 2013, Sofar Solar specializes in developing and manufacturing new energy power equipment. Its core products include solar grid-connected inverters, energy storage inverters, and battery systems for residential, commercial, industrial, and utility-scale applications. In 2023, the company's solar inverter shipments ranked among the global top ten.

The company has accelerated its pivot toward energy storage in recent years. From 2021 to the first half of 2024, energy storage revenue contribution increased from 35.1% to 46.64%. Their core solar-storage inverter products range from 3kW to 20kW, suitable for residential and small commercial applications.

In international markets, Sofar Solar has established a global service network covering over 100 countries, with localized maintenance centers in more than 20 countries across Europe, the Middle East, and other regions. The company has received "Top PV Brand" certifications in multiple countries from EuPD Research. Italy represents over 30% of total revenue, with local distributor ZCS consistently ranking as the top sales channel.

Technological Innovation and Recent Performance

Sofar Solar has built impressive technological capabilities, holding 102 invention patents, 94 utility model patents, and 80 software copyrights as of 2024. Their self-developed 320kW high-power inverter, with a 99.05% conversion efficiency and MPPT tracking precision, has set a new industry benchmark, standing out in stringent European and American certification systems.

For commercial and industrial applications, the company launched the PowerMagic AC-coupled energy storage system, proven effective for peak shaving and valley filling in Middle Eastern and European projects. The complementary "Sofar Solar Cloud" intelligent monitoring platform uses AI algorithms to optimize multi-terminal energy dispatch and provides lifecycle maintenance support for overseas customers.

source: Sofar Solar

Financial Performance Affected by European Market Downturn

Sofar Solar New Energy has experienced significant performance fluctuations in recent years. In 2022, stimulated by the European energy crisis, the company's performance exploded, with annual revenue reaching 4.46 billion yuan, a 144% year-on-year increase, and net profit soaring to 849 million yuan, up 354% year-on-year.

However, in 2023, as European natural gas prices retreated and market inventory became saturated, revenue fell to 3.74 billion yuan, down 16% year-on-year, while net profit dropped to 341 million yuan, a sharp 60% decline.

For the first three quarters of 2024, Sofar Solar reported revenue of 2.05 billion yuan, down 32.3% year-on-year, with net profit attributable to shareholders at 218 million yuan, a significant 47.19% decrease. The company forecasts full-year revenue and net profit of 2.71 billion yuan and 236 million yuan respectively, representing year-on-year decreases of 27.53% and 23.03%. This performance pressure is primarily attributed to declining European market demand, reduction in low-margin orders, and foreign exchange losses from euro depreciation.

It's worth noting that Sofar Solar currently faces concerns about capacity utilization rates—55.9% for solar inverters and only 24.3% for energy storage batteries in 2023. The company's high dependence on the European market has affected performance as energy prices have fallen.

Development Opportunities in High-Growth Sectors

The solar PV industry, after experiencing fluctuations driven by policy and market forces, is now seeing recovery opportunities.

According to the China Photovoltaic Industry Association, global new solar installations will reach 531-583GW in 2025, with domestic installations of 215-255GW. Meanwhile, leading securities firms predict the global energy storage market will experience high growth in 2025, with shipments expected to reach 449GWh, a year-on-year increase of approximately 30%.

As a "dark horse" in the solar and energy storage field, Sofar Soalr has rapidly emerged by covering these two potential-rich sectors in its main business. This A-share listing marks the addition of a new capital force in the photovoltaic storage sector. Amid the carbon neutrality wave, Sofar Solar has the potential to break the monopoly of overseas brands in technical certification and channel barriers, becoming another A-share benchmark enterprise with global competitiveness in integrated solar and energy storage solutions.