East Sunrise New Energy Co., Ltd. (East Sunrise) reversed from profit to loss in 2024, with a non-GAAP net loss of over 3.7 billion yuan, a decrease of more than 335% compared to the previous year. At the same time, East Sunrise also faced financial pressure.
On April 22, East Sunrise released its “2024 Annual Report.” The report revealed that in 2024, East Sunrise achieved operating income of 20.239 billion yuan, a decrease of 42.71% year-on-year. The net profit and non-GAAP net profit were losses of 3.435 billion yuan and 3.731 billion yuan respectively, with a decrease of 352.03% and 335.76% year-on-year. This marked the first decline in operating income for the company since 2019.
According to a report on April 23 by “First Financial,” from 2019 to 2023, the company accumulated a non-GAAP net profit of 2.648 billion yuan. The loss in the past year exceeded the profits of the previous four years, by over 10 billion yuan.
Furthermore, East Sunrise also faced financial pressure. The annual data showed that in 2024, East Sunrise’s operating cash flow had a net outflow of 4.323 billion yuan, a significant increase compared to the 1.643 billion yuan net outflow in the same period the previous year.
The increased net cash outflow led to a substantial reduction in East Sunrise’s cash reserves. By the end of December last year, the company’s monetary funds balance was 5.206 billion yuan, a decrease of 5.367 billion yuan compared to the previous year, a decrease of 50%.
Simultaneously, East Sunrise’s debt-to-asset ratio had reached a historical high. By the end of last year, the company’s total assets were 43.094 billion yuan, total liabilities were 31.576 billion yuan, and the debt-to-asset ratio reached 73.27%, an increase of 1.66 percentage points year-on-year, while interest-bearing debt accounted for 35.84%.
As of the end of December last year, the company’s long-term borrowings and accounts payable had balances of 2.538 billion yuan and 2.857 billion yuan respectively, totaling 5.395 billion yuan, combined with 10.05 billion yuan in short-term liabilities, the total interest-bearing debt was 15.445 billion yuan.
“First Financial” indicated that there existed a significant gap of about 4.844 billion yuan between East Sunrise’s monetary funds and short-term liabilities.
In the annual report, East Sunrise explained the decline in performance as follows: “The photovoltaic market experienced a temporary supply-demand mismatch in 2024, leading to a decline in product prices across the photovoltaic industry chain.”
On April 22, the “China Business Network” analysis stated that East Sunrise’s main business was focused on research, development, production, and sales of solar photovoltaic cell modules, which also included services in photovoltaic power station EPC, operation of photovoltaic power stations, and energy storage fields. The company primarily operated in the midstream position of the photovoltaic industry chain and extended its involvement to both upstream and downstream sectors. By product category, the proportion of electricity fee income from photovoltaic power stations increased from 0.66% in 2023 to 3.26% in 2024, while the proportion of revenue from solar cells and modules decreased from 81.17% in 2023 to 76.66% in 2024.
According to industry association data, the prices of polysilicon, silicon wafers, and modules decreased by approximately 35%, 45%, 30%, and 25% respectively last year.
Due to external factors, the gross profit level of East Sunrise also significantly decreased. Last year, the company’s overall gross profit margin was only 6.16%, a decrease of 8.53 percentage points, representing a nearly 60% drop.
Among East Sunrise’s main business segments, revenue from batteries and components had the highest proportion, with the most dramatic decline in both revenue and gross profit margin. The revenue from batteries and components was 15.516 billion yuan, a year-on-year decrease of 45.89%, with a gross profit margin of 2.89%, a decline of 10.69 percentage points, which equates to an almost 80% decrease. During the same period, the revenue declines for photovoltaic power station EPC transfers, energy storage system lighting, and auxiliary photovoltaics were 19.53% and 29.61% respectively, with gross margins decreasing by 4.47 and 0.53 percentage points.
Additionally, in 2024, East Sunrise recorded substantial impairment losses and inventory write-downs totaling 2.654 billion yuan, which became another significant reason for the sharp decline in net profit.
Public records show that East Sunrise New Energy Co., Ltd. was founded in 2002 and went public on the Shenzhen ChiNext board in 2010.
As of 09:37:00 on April 24th Beijing time, East Sunrise’s stock price was reported at 8.81 yuan per share, a decrease of 1.01%, with a total market value of 10.044 billion yuan.