Sigenergy Charges Into IPO Just Two Years After Inception

The maker of energy storage products used in solar farms has quickly established itself as an industry leader with its world-first AI-optimized systems

Key Takeaways:

• Sigenergy has filed for a Hong Kong IPO, ranked as the world's top provider in the stackable all-in-one distributed energy storage system market with 24% share
• The company logged 700 million yuan in revenue in the first three quarters of last year, on track to reach the $100 million mark just two years after its founding

Much has been written about China's charge into green power, as solar and wind farms spring up at lightning pace across the country in Beijing's rush to reduce its carbon footprint. But far less is written on the recent rise of energy storage products, which are critical for such plants to store excess power in times of abundance for use when winds ebb or sunlight is scarce.

China's installed renewable energy storage capacity is fast approaching the 70 million kilowatt-mark, representing an important step in the industry's shift from its singular focus on power generation to integrated development of power generation and energy storage. New technological advances in AI and digitalization are poised to further accelerate energy storage development in China as a group of young new players juices up the field.

One such company, Sigenergy Technology Co. Ltd., is seizing on this latest flavor of new energy technology to launch a Hong Kong IPO, less than three years after its establishment, according to its listing document filed a week ago.

Founded in 2022, the company has grown at breakneck speed since then on the success of its SigenStor flagship product, an all-in-one energy storage system (ESS). Sigenergy calls the product the world's first AI-optimized 5-in-1 ESS solution that "seamlessly integrates a solar inverter, EV DC charger, power conversion system (PCS), battery pack, and energy management system (EMS) with a modular, stackable product design."

It says the product's simple stacking or module replacement design lets users easily tailor capacity to meet their individual needs.

Storage management

SigenStore not only develops hardware for energy storage, but has also created cloud-based systems to manage those resources. It says its energy integration platform, called mySigen App, is the first of its kind to integrate the GPT-4o model. Last September, it also unveiled Sigen Cloud, capable of supporting extensive processing across varied distributed energy hardware and usage scenarios.

The Sigen Cloud platform is already synced with leading virtual power plant (VPP) vendors in various regions around the world such as Sweden, the Netherlands, and Australia, and also supports automatic capture of real-time dynamic electricity prices from over 20 countries and more than 60 power companies.

According to third-party market data in the listing document, SigenStore was already the world's top provider of stackable all-in-one DESS solutions in the first nine months of last year, with 231 MWh in total shipments for 24.3% of the market.

Despite its China roots, the company has set its sights on the global market since its inception. It established an extensive collaborative network as of mid-February this year, including 99 distributors across more than 60 countries and regions. In the last two years, revenue from overseas markets made up about 90% of its total.

As the company commercialized its products, its revenue jumped from zero in 2022 to 58.3 million yuan ($8.03 million) in 2023. As it built up its network, the figure soared to 700 million yuan in the first nine months of last year. That made it the fastest Chinese energy storage company to hit the $100 million in annual revenue milestone, which typically takes more than five years, according to the listing document, citing third-party research.

The company is still in the red, though its losses are quickly narrowing. It lost 76.19 million yuan and 373 million yuan in 2022 and 2023, respectively, and the loss narrowed to 53.35 million yuan in the first three quarters of 2024. Meanwhile, its gross margin has also been improving as it gains economies of scale, rising from 31.3% in the first three quarters of 2023 to 44.1% during the same period in 2024. If current trends continue, the company could soon record its first-ever profits.

Instilled with Huawei DNA

Notably, the company has a connection to Huawei, one of China's best-known tech names and a leader in many of the fields it enters, earning Sigenergy the nickname of "Little Huawei" in energy storage circles. Its founder, Xu Yingtong, once headed Huawei's intelligent solar energy business and worked in Huawei for 23 years, building the company into the world's largest supplier of solar inverters in 2015 just four years after entering the field.

Xu also oversaw Huawei's Ascend Computing AI computing platform between 2020 and 2022, which might explain Sigenergy's rapid incorporation of AI into its products. Another Sigenergy co-founder, Zhang Xianmiao, previously served as the vice president of Huawei's solar business.

Xu sees a potential shift ahead for the solar industry's business model, from power generation to energy storage in terms of its primary focus. Government policies seem to point in that direction.

On Feb. 17, China's Ministry of Industry and Information Technology (MIIT) and eight other government departments issued an action plan to promote high-quality development of the new energy storage manufacturing industry, with a view to further enhancing China's international competitiveness in the sector. As more countries build up their green energy capacity, companies from the storage sector are rapidly shaping up as a new generation of noteworthy players.

But Sigenergy is hardly alone in jumping on the energy storage bandwagon. In addition to competition from established solar equipment makers, the company must also contend with other startups and new entrants crossing over from other industries.

As global demand for renewable energy storage rises, helped by supportive government policies, going public now could let Sigenergy tap into positive sentiment to bring in foreign capital to further accelerate its international expansion and keep upgrading its products and services.

The company is capitalizing on its hardware and software advantages, as well as AI advances, to try to lead the way in the storage segment of the broader renewable energy market. If it can turn a profit while maintaining its early lead, it could attract some strong attention and a high valuation on its way to a Hong Kong listing.