Sungrow Power Supply Co., Ltd.
2022Annual Report
Announcement No.: 2023-020
April 2023
2022Annual Report
Section I Important Notes, Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and executives of the
Company hereby guarantee that the information presented in this annual report is truthful,
accurate and integrate, free of any false records, misleading statements or material omissions,
and assume individual and joint legal liabilities thereof.
Cao Renxian as the President of the Company, Tian Shuai as the Chief Accountant, and Li
Pan as the head of accounting department (accounting supervisor) hereby guarantee the
truthfulness, integrity, and accuracy of financial statements in this annual report.
All directors have attended the board meeting to review this report.
Contents in this report concerning future plans, performance forecasts, and etc., do not
constitute any commitment made by the Company to any investor or related party. Investors
and related parties should maintain adequate risk awareness and understand the possible
difference between plans, forecasts, and commitments. Investors are kindly advised to pay
attention to investment risks.
(1) Policy-related risks
Although technologies related to renewable energy power generation are still evolving and
grid parity has been achieved in most regions around the world, there are still a few regions
where the power generation cost or the on-grid electricity price is higher than that of fossil
energy, and the unit electricity cost per kilowatt-hour from wind-solar-storage integrated
applications maintains relatively high. In addition, considering the various constraints
including grid consumption, intermittent fluctuations in new energy availability, as well as
land and taxation, policy support and encouragement from governments are still necessary.
Since the supportive policies are formulated by the governments of various countries, while
the global trend of energy conservation and emission reduction remains unchanged, major
changes in the macro economies of major markets or relevant supportive policies will affect
the growth pace of the industry and the Company’s profitability to a certain extent. To this
end, the Company actively makes global presence, and continually delves into the global
market to minimize the impact of policy fluctuations within a single country.
(2) Risk of gross margin reduction due to intensified competition
As the world's largest PV inverter manufacturer, the Company's core product, PV inverters,
enjoys an obvious market advantage. However, the huge potential of domestic and foreign
markets has also attracted fierce market competition. If the Company fails to maintain the
leading edge in technological innovation, new product development, and cost control, the
products will face the risk of gross margin declination. As such, the Company needs to further
accelerate new product upgrade and iteration through R&D innovation and increasing R&D
investment, speed up the research and application of AI technology, so as to constantly
provide customers with value-added services, delivering better customer experience, and
consolidate product advantages in the market.
(3) Risk of collecting accounts receivables
As the domestic market grows rapidly, the Company makes more efforts in product sales. In
consideration of the PV industry characteristics in China, such as subsidy arrearage, large
project amount, and long payment term, the Company's business growth at fast pace will lead
to a quick increase of receivables and certain risks in payment collection. In order to prevent
credit risks and accelerate capital turnover, the Company has formulated strict credit
management systems and sale-on-credit policies, and actively reduce the risk of
non-performing loans and bad accounts through legal actions.
(4) Risk of international trade frictions
Under the impact of intensified international trade frictions, global economy is under huge
pressure of inclination, governments are launching monetary policies and other economic
stimulation policies. While boosting the economy, such policies may cause bigger supply chain
fluctuation, logistic efficiency reduction, and cost increase. The PV industry where the
Company is in also faces short-term pressures due to changes in demand tempo. The
Company has formulated a series of defensive measures and lean production plans to actively
respond to the complicated global situation and expand the global market on the premise of
ensuring employees’ safety and health. By strengthening the global supply chain layout,
improving supply chain management capabilities, the Company makes every effort to reduce
trade frictions and other impacts, ensuring that the annual tasks are completed on time.
(5) Risk of exchange rate fluctuation
USD, AUD and EUR are the three major currencies used for the Company's overseas revenue
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