On the evening of October 20, Ningde Shidai (300750) released its third-quarter report, showing a revenue of CNY 442.1 billion and a net profit attributable to the parent company of CNY 64.5 billion (click here). The numbers themselves are not bad, but the feedback from the capital market has been intense.
At the opening of the next trading day, the A-shares of Ningde Shidai opened low and continued to decline, closing with a drop of 12.03% at CNY 227.90, with a turnover of CNY 32.439 billion. Calculated from its historical high of CNY 467 per share in May, its market capitalization has retreated from over CNY 2 trillion to around CNY 1.07 trillion, evaporating more than CNY 1.1 trillion in just over five months.
The single-day drop exceeded the limit-down percentage during the early stage of its listing in 2018. Coupled with ranking first in the amount of a single shareholder reduction in A-shares in 2026, and ranking first in the market capitalization evaporation of core assets within the year—these three "firsts" have pushed this global battery leader to the forefront of public attention. On the same day, Ningde Shidai updated its investor relations record form, announcing data such as energy storage sales while also responding to multiple inquiries from the market.
▍ Two Sets of Data in Focus by the Market
The first set is the profit growth gap. The third-quarter report shows that in the third quarter, Ningde Shidai's revenue was CNY 165.2 billion, a year-on-year increase of 58.6%; the net profit attributable to the parent company was CNY 21.25 billion, a year-on-year increase of 14.54%. The gap between revenue and profit growth rates for the quarter widened to 44 percentage points. Revenue is still expanding, but profit growth has not kept pace synchronously.
The second set is cash flow and inventory. In the first three quarters, the net cash flow from operating activities was CNY 61.6 billion, a year-on-year decrease of 23.6%; at the end of the third quarter, inventory reached CNY 144.77 billion, an increase of 53% compared to the end of the previous year. As profit growth slows down, changes in these two indicators are easily interpreted by the market as pressure signals.
▍ Ningde Shidai: Demand Is Not as Pessimistic as the Market Expected
These two sets of data are easily attributed by the market to the same concern: revenue is still growing, so why have profit, inventory, and cash flow not kept pace synchronously? Is the terminal demand not as strong as it appears?
The response from Ningde Shidai in the investor relations record form is that "demand may not be as pessimistic as the market expects." Data shows that in the third quarter, the combined sales of power and energy storage batteries by Ningde Shidai exceeded 260 GWh, with energy storage batteries accounting for about a quarter. Calculated accordingly, the sales of energy storage batteries were approximately 65 GWh, representing a year-on-year growth rate of about 60%.
Meanwhile, regarding topics such as profitability, inventory, cash flow, and capacity utilization rate, Ningde Shidai responded one by one. The core of this round of responses is to attribute the profit growth gap, inventory increase, and cash flow decline to factors such as product structure, delivery and revenue recognition cycles, and proactive support for the supply chain, rather than weakening terminal demand or sluggish sales.
Regarding profitability: The change in unit profitability in the third quarter was mainly affected by several factors: first, changes in product structure, where fluctuations in the product structure of a single quarter do not represent the long-term direction; second, the impact of consumption tax and export tax rebates. The company stated that it is actively communicating with customers to share the relevant impacts, while promoting the implementation of new technologies and new products to reduce the impact on profitability.
Regarding inventory: The increase in inventory amount in the third quarter is the result of business scale development. The inventory turnover days have remained relatively stable in recent quarters, with no situation of sluggish sales or shipments, which belongs to normal inventory turnover. From a structural perspective, the growth is mainly in dispatched goods, which will gradually be reflected in the company's revenue in the future.
Specifically, in the energy storage sector, the company is shifting from selling battery cells and DC side products to providing AC side and system products. The product structure and forms are richer, but the corresponding delivery and revenue recognition cycles have been extended compared to the past.
Regarding cash flow: In recent years, upstream supply chain enterprises in the lithium battery sector have faced significant cash flow pressure. Starting from the third quarter, the company has proactively adjusted its payments to suppliers, prioritizing support for partners with R&D capabilities, innovative spirit, and active cooperation in the company's capacity expansion, including a combination of measures such as shortening payment terms, paying advance payments, and providing R&D funding support. These measures may last for a period of time to promote a healthier and more sustainable development of the industrial chain. Operating cash flow may be affected in phases, but in the long run, it will not affect the company's cash profitability and will return to a relatively healthy level in the future.
Regarding capacity utilization rate: In the first half of the year, the company's capacity utilization rate was highly saturated. In recent years, the company has accelerated its capacity construction progress according to market demand. With the successive commissioning of capacity this year, the degree of capacity tightness has been alleviated. However, market demand is also continuing to grow. Overall, the capacity utilization rate will remain at a high level in the future, maintaining a relatively healthy state.
Regarding market expectations: Recently, some investors have expressed concerns about the industry demand next year. From the company's perspective, the industry demand in 2027 is still worth looking forward to. The market demand for global power and energy storage batteries may not be as pessimistic as the market expects, and there is still considerable growth potential. For example, in the energy storage sector, both domestic and overseas markets are maintaining a good growth rate, especially with strong energy storage demand in some overseas markets.
Hangjia Shuo Energy Storage observed that Ningde Shidai is also releasing confidence to the market through share repurchases. On October 21, the number of shares repurchased by Ningde Shidai was 3.4886 million, with the maximum repurchase price per share at CNY 231.38 and the minimum repurchase price per share at CNY 227.51, with a total fund expenditure of approximately CNY 800 million.
Moving forward, there are two aspects that truly need attention: whether the profit growth gap can converge as the product structure stabilizes, and whether inventory and cash flow can return to a normal pace.
As of press time, the A-share price of Ningde Shidai is CNY 220.41 per share, with a total market capitalization of CNY 1.020 trillion.
Note: The content of this article is only for sorting out public information in the energy storage industry, industrial research, and objective analysis. The listed companies mentioned in the article are only for reference as industry chain cases and do not constitute any investment basis. The market has risks, and investment requires caution.