Sungrow Power Supply Co. (300274.sz): Management call takeaways on reported US draft ban; 2Q results preview; Stay Neutral on already conservative US business expectations

Research evidence excerpt

Sungrow Power Supply Co. (300274.sz): Management call takeaways on reported US draft ban; 2Q results preview; Stay Neutral on already conservative US business expectations

Goldman Sachs Sungrow Power Supply Co. (300274.SZ)

2Q26 with revenue of Rmb23.3bn (-5% yoy) and net income of Rmb3.0bn (-22% yoy)

due to solar inverter demand weakness, ESS industry competition, and higher lithium

costs, but expect earnings to marginally improve into 2H26 driven by back-end loaded

large-project deliveries. Our estimates, 12-m TP of Rmb135.0 and Neutral rating are

unchanged, as potential benefits from new AIDC power/SST products are not yet

firm in our view with tough earnings set-up for the existing business.

Key takeaways from management call

Company response to the reported draft ban on Chinese inverters in the US: Per

Reuters, the U.S. Federal Communications Commission is drafting a ban on imports of

new foreign models of solar and battery inverters over concerns around potential power

supply disruptions. During the conference call, Sungrow management commented that

its utility-scale inverters deployed in Europe and the US are power-conversion hardware

without remote-control functionalities. To ensure transparency, the company operates

in full compliance with international standards on information security and privacy

protection such as ISO 27001/27701 and has established a Cybersecurity Laboratory

recently, allowing third-party institutions and global customers to audit its industrial

control security and data privacy practices. Meanwhile, the company noted that it is less

likely that the US market could decouple from the Chinese inverter supply chain in the

near term, given that they estimate it will take at least 3-5 years to build a scalable and