Kehua — 2024 at a Glance

SZSE: 002335 · Founded 1988 · Xiamen, China
Total revenue
CNY 7.757 B (~$1.07 B)
YoY change
-4.71 %
Net profit
CNY 315.2 M (~$43 M)
YoY change
-37.90 %
R&D spending
CNY 468.1 M (6.03 % of revenue)
Employees
4,250 (R&D: 1,238, 29.13 %)
Operating cash flow
CNY 1.512 B (+7.84 %)
Cumulative ESS PCS installed
>30 GW / 12 GWh

Key takeaways

  • Kehua’s New Energy segment (PV inverters + ESS PCS combined) generated CNY 3.608 billion, down 16 % year-on-year, as fierce pricing pressure in China’s PCS market squeezed both revenue and margins.
  • The company claims the #1 position among Chinese companies for ESS PCS shipments globally, with cumulative installed capacity exceeding 30 GW / 12 GWh by end of 2024.
  • Data Center infrastructure overtook New Energy as the higher-margin growth engine, reaching CNY 3.152 billion (+14 %) with 28.77 % gross margins — roughly 70 % above New Energy’s 16.78 %.
  • Kehua launched the S3-EStation 2.0 with grid-forming capability and full liquid cooling, and delivered several landmark projects including what it describes as the world’s largest single-unit LFP grid-forming ESS project.
  • Overseas revenue contracted 25.8 % to CNY 725 million (9.35 % of total), though overseas gross margins at 39.28 % remain far above domestic levels.

1. Headline numbers

Kehua reported total revenue of CNY 7.757 billion for the year ended December 31, 2024, down 4.71 % from CNY 8.141 billion in 2023. Net profit attributable to shareholders fell 37.90 % to CNY 315.2 million.

The profit decline was sharper than the revenue decline, reflecting margin compression across the company’s largest segment and a shifting product mix. Operating cash flow, however, improved 7.84 % to CNY 1.512 billion — a signal that working capital management held up even as profitability dropped.

R&D spending reached CNY 468.1 million, representing 6.03 % of revenue. The company employed 4,250 people at year-end, of which 1,238 (29.13 %) were R&D staff.

2. Revenue by segment

Kehua operates three reporting segments. The revenue breakdown reveals a company in transition:

Segment 2024 Revenue (CNY B) % of Total YoY Change Gross Margin
New Energy 3.608 46.51 % -15.98 % 16.78 %
Data Center 3.152 40.63 % +14.07 % 28.77 %
Smart Power (UPS) 0.922 11.88 % -9.01 % 41.06 %

New Energy remains the largest segment by revenue, but it shrank substantially while Data Center grew into a near-equal contributor. Smart Power (traditional UPS) is smaller and declining, though it carries the highest margins at 41 %.

The shift matters for how we read Kehua’s ESS story. Data Center now generates nearly as much revenue as New Energy, and at significantly better margins. Kehua itself frames the company strategy around “Green Power + AI + Storage” convergence — positioning its PCS, data center power, and energy storage capabilities as a unified offering.

3. New Energy margins and pricing pressure

The New Energy segment’s gross margin of 16.78 % is the weakest of Kehua’s three divisions. This is consistent with the broader PCS market in China, where aggressive competition from Sungrow, Sineng Electric, and dozens of smaller manufacturers has driven system-level pricing below CNY 0.4/Wh for 2-hour and 4-hour configurations.

An important caveat: Kehua’s New Energy segment combines PV inverters and ESS PCS into a single line item. The company does not disclose ESS-specific revenue or margins separately. This limits the analysis — we cannot determine whether ESS PCS margins are better or worse than PV inverter margins, or how the mix is shifting between the two product lines.

What we do know: New Energy units sold fell 29.62 % to 79,039 units in 2024. The combination of lower unit volumes and lower per-unit pricing drove the 16 % revenue decline. Whether PCS or PV inverters took the larger hit is not visible from the filing.

Among PCS peers, Sungrow and Sineng Electric face similar pricing headwinds in China, though both have different segment structures and disclosure levels, making direct margin comparisons difficult.

4. ESS market position: #1 PCS in China

Kehua states it ranked #1 among Chinese companies for ESS PCS shipments globally in 2024, with cumulative installed capacity exceeding 30 GW and 12 GWh by year-end.

This claim positions Kehua ahead of domestic PCS competitors including Sungrow and Sineng Electric, though the basis and methodology for the ranking are not detailed in the filing. The 30 GW cumulative figure represents PCS power capacity shipped over the company’s history in energy storage, not a single-year number.

For context, China’s new-type energy storage grid-connected capacity reached 44.6 GW / 111.6 GWh in 2024 alone, a 115 % year-on-year increase. Kehua’s PCS equipment is installed across a significant share of this base, though the company does not quantify its 2024-specific share.

5. ESS product developments

Kehua highlighted several product milestones in the annual report.

S3-EStation 2.0 Smart Liquid-Cooled ESS System

The flagship product for 2024, the S3-EStation 2.0 features grid-forming capability and full liquid cooling across all components. Grid-forming inverters are increasingly required for standalone storage projects and weak-grid applications — a growing segment in China where standalone storage exceeded 50 % of new installations for the first time in 2024.

5 MWh Liquid-Cooled ESS Battery System

Using 300 Ah+ LFP cells, this battery system targets utility-scale projects. The higher cell capacity aligns with the industry trend toward larger-format cells for energy density improvements.

S3-EStore C&I All-in-One

A commercial and industrial (C&I) energy storage system aimed at behind-the-meter applications, combining PCS and battery in a single enclosure.

PCS Range: 3 kW to 10 MW

Kehua’s PCS product line spans from residential-scale 3 kW units to utility-scale 10 MW systems, giving the company coverage across all major storage segments.

6. Key project milestones

The annual report highlights several landmark ESS projects delivered or connected in 2024:

  • World’s largest single-unit LFP grid-forming ESS project — no additional details on capacity or location are provided in the filing, but grid-forming at this scale is notable
  • China’s first semi-solid-state battery grid-side ESS project — an early deployment of next-generation battery chemistry in a grid application
  • China’s largest single-unit electrochemical standalone ESS project — reflecting the trend toward larger standalone storage installations
  • Tibet’s first long-duration standalone grid-forming ESS projects — high-altitude, off-grid applications in one of China’s most challenging operating environments

These project references are sourced from Kehua’s own filing. The company does not provide MW/MWh capacity figures for individual projects in the annual report.

7. Geographic breakdown and Malaysia expansion

Region 2024 Revenue (CNY B) % of Total Gross Margin
Domestic (China) 7.032 90.65 % 23.08 %
Overseas 0.725 9.35 % 39.28 %

Overseas revenue fell 25.8 % year-on-year to CNY 725.1 million, reducing the international share from 12 % to under 10 %. The decline is significant for a company that needs international growth to offset domestic pricing pressure.

However, overseas gross margins at 39.28 % are nearly double the domestic margin of 23.08 %. This premium reflects higher pricing power in export markets and a product mix tilted toward higher-value equipment — a pattern seen across Chinese PCS and inverter manufacturers.

Kehua’s Malaysia manufacturing base became operational in 2024, establishing a production footprint in Southeast Asia. This facility could serve as a platform for non-China supply chains, potentially helping the company access markets where tariffs or local content requirements apply.

Compared to PCS peers like Sungrow, which has a much larger international business, Kehua’s 9 % overseas share and declining trajectory is a vulnerability. Sineng Electric has similarly been working to grow its international presence, making overseas expansion a competitive priority across the PCS segment.

8. Green Power + AI + Storage convergence strategy

Kehua frames its three business segments as parts of a unified “Green Power + AI + Storage” strategy. The thesis: data centers increasingly need clean power, energy storage provides grid stability and cost management, and Kehua can supply the full power infrastructure stack.

This narrative is commercially grounded. Data center power demand is growing rapidly, driven by AI training and inference workloads. Energy storage paired with on-site or nearby renewable generation is becoming a standard configuration for new data center builds, particularly in China.

For Kehua, the convergence story has practical implications. The Data Center segment’s 14 % growth and 28.77 % margins are currently subsidizing the company through the New Energy downturn. If the company can cross-sell ESS solutions to its data center customer base, the strategy could accelerate ESS deployment while maintaining better blended margins than pure-play PCS competitors.

9. Market context

Kehua’s annual report includes several data points about the broader Chinese energy storage market:

  • China new-type ESS grid-connected capacity reached 44.6 GW / 111.6 GWh in 2024, up 115 % year-on-year
  • Standalone storage exceeded 50 % of new installations for the first time, driven by policy mandates and merchant storage economics
  • 2-hour and 4-hour ESS system minimum quote prices fell below CNY 0.4/Wh, intensifying margin pressure across the value chain
  • Grid-forming capability is becoming a standard requirement for standalone and weak-grid projects

The market is growing rapidly but pricing is falling faster than volumes are rising for many equipment suppliers. This dynamic explains why Kehua’s New Energy segment shrank despite the overall market more than doubling.

10. What to watch

Kehua’s 2024 results paint a picture of a company navigating a difficult transition. The New Energy segment declined 16 % despite the broader ESS market growing 115 %, suggesting Kehua either lost share, faced particularly severe pricing pressure, or saw its PV inverter business (bundled in the same segment) drag down the combined numbers. Without separate ESS and PV disclosure, it is impossible to tell which factor dominated — and that opacity itself is worth watching. If Kehua begins breaking out ESS-specific revenue in future filings, it would be a meaningful signal of confidence in the segment.

The Data Center pivot is working financially but raises questions about strategic focus. Data Center revenue nearly matches New Energy and carries far better margins. There is a risk that management attention and capital allocation tilt toward the higher-margin data center business at the expense of ESS investment, particularly if New Energy margins remain compressed.

Overseas revenue shrinking by 26 % is a red flag. In a year when Chinese PCS manufacturers were aggressively expanding internationally, Kehua moved in the opposite direction. The Malaysia factory becoming operational could reverse this trend, but the company will need to demonstrate meaningful export growth in 2025 to maintain credibility as a global PCS player.

Margin pressure across the PCS industry shows no sign of abating. With system prices below CNY 0.4/Wh and dozens of competitors fighting for market share in China, Kehua’s 16.78 % New Energy gross margin leaves limited room for further compression. The company’s #1 PCS position by cumulative shipments does not automatically translate into pricing power in a commoditizing market.

11. Sources

All data in this article is sourced from Kehua’s official 2024 Annual Report, filed on CNINFO (Shenzhen Stock Exchange disclosure platform).

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