New stock preview | Can Hainan Drinda New Energy Technology (002865.SZ) rely on overseas expansion stories to support another IPO with marginal improvement in first quarter performance?

In the first quarter report of 2025, just after the disclosure of marginally improved performance, Hainan Drinda New Energy Technology (002865.SZ) promptly submitted documents again to the Hong Kong Stock Exchange. According to the report of Frost & Sullivan, this leading company in the field of photovoltaic cells, based on the shipment volume in 2024, Hainan Drinda New Energy Technology's market share of N-type TOPCon cells among professional manufacturers is approximately 24.7%, ranking first globally; in the same year, among professional manufacturers and integrated manufacturers, the company's market share of N-type TOPCon cells is around 7.5%. Despite its prominent position in the industry, the photovoltaic industry has experienced a phase of mismatch between supply and demand since the end of 2023, entering a phase of capacity clearance. The "elimination round" has begun, and even top players like Hainan Drinda New Energy Technology have been affected to some extent. The prospectus shows that the company's revenue in 2024 was 9.924 billion yuan, a decrease of 46.7% year-on-year; while the net profit for the whole year was -591 million yuan, in comparison, Hainan Drinda New Energy Technology's net profit in 2023 was 816 million yuan. However, entering 2025, the fundamentals of Hainan Drinda New Energy Technology seem to have shown a slight "turnaround". Data shows that in Q1 of 2025, the company's revenue decreased by 49.52% to 1.875 billion yuan year-on-year, with a net profit of -106 million yuan; but in terms of quarter-on-quarter calculation, both revenue and profit indicators in this quarter have improved compared to the fourth quarter of the previous year, with a significant reduction in losses. Another important signal is that during Q1, the proportion of Hainan Drinda New Energy Technology's overseas revenue increased rapidly, indicating that the company's global layout is entering an accelerated phase. Is a turning point in performance emerging? Hainan Drinda New Energy Technology can trace its history back to 2003, and in 2021, through the acquisition of Jietai Technology, the company officially entered the photovoltaic technology industry. By 2022, based on the shipment volume of N-type TOPCon cells, Hainan Drinda New Energy Technology had already risen to the top among specialized manufacturers. It was also in this year that the company's revenue multiplied, successfully breaking through 10 billion to 11.086 billion yuan; in the same year, the company's net profit reached 8.21 billion yuan, showing a significant change compared to the previous year. In 2023, Hainan Drinda New Energy Technology started using its Huai'an base, and the production capacity of N-type TOPCon cells increased. Looking back at the current year, this was also a "highlight moment" for Hainan Drinda New Energy Technology. The company's revenue increased to 18.611 billion yuan, and net profit increased to 8.16 billion yuan. In the year of significant performance decline in 2024, both the revenue of Hainan Drinda New Energy Technology's N-type TOPCon cells and P-type PERC cells experienced substantial negative growth. Data shows that in that year, the revenue contributed by N-type cells for Hainan Drinda New Energy Technology was 9.277 billion yuan, accounting for 93.5% of total revenue, while in the previous year this business segment's revenue was 13.495 billion yuan. In the same year, the revenue from P-type cells was 380 million yuan, accounting for 3.8%, compared to 4.228 billion yuan in the same period of the previous year. It is worth mentioning that in 2024, the market sales performance of Hainan Drinda New Energy Technology's main products varied. The sales volume of N-type TOPCon cells was 30.4GW, a significant increase from 20.4GW in the previous year, but the average selling price dropped from 0.67 yuan/watt in 2023 to 0.31 yuan/watt. At the same time, the sales volume of P-type PERC cells was 1.2GW, with an average selling price of 0.32 yuan/watt, showing a trend of both quantity and price decrease. Perhaps out of necessity, in the context of a significant drop in overall revenue, the overseas expansion of Hainan Drinda New Energy Technology accelerated in 2024. According to disclosures from the company, the proportion of overseas revenue for Hainan Drinda New Energy Technology increased rapidly from 4.7% in 2023 to 23.9% in 2024, and further increased to 58.1% in the first quarter of this year. In terms of profitability, with the drop in prices of main products in 2024, the gross profit of Hainan Drinda New Energy Technology was -85.058 million yuan, with a corresponding gross profit margin of -0.9%. In comparison, the margins were 11% and 9.1% in 2022 and 2023 respectively. It was also in 2024 that Hainan Drinda New Energy Technology recorded a huge loss in net profit, marking its worst performance since going public. However, as mentioned at the beginning, in the first quarter of this year, Hainan Drinda New Energy TechnologThe operating conditions have improved. The data shows that the company shipped 7.15 GW of N-type TOPCon solar cells during the period, with an average unit price of 0.26 yuan/w (excluding tax), and a per watt profit of -0.015 yuan/w. This represents a significant improvement compared to the average unit price of 0.24 yuan/w (excluding tax) and per watt profit of -0.024 yuan/w in the fourth quarter of 2024.Fostering growth new momentum from going out to sea? In a recent quarterly report, Hainan Drinda New Energy Technology stated that with the continuous improvement in the supply-demand relationship of the photovoltaic industry, the high-efficiency battery segment, as a core technical segment of the photovoltaic industry, is expected to achieve profit improvement and enhancement by taking advantage of product technology and cost advantages in the next stage of technology upgrade and industry demand enhancement. It is not surprising that Hainan Drinda New Energy Technology has optimistic expectations for the future market. Last year, the battery segment suffered serious losses, and even after outdated production capacities exited the industry, the cost curve remained relatively steep. Considering the characteristics of the production capacity structure, cost curve, and supply-demand status of each segment, many institutions currently believe that the industrial chain is expected to achieve significant improvement in supply-demand relationship this year, driving the profit recovery of leading companies in related segments. Looking towards the long term, considering the fierce competition in the domestic photovoltaic industry, it may be necessary for companies in the industry chain to go out to sea in order to regain growth or even break through growth bottlenecks. GMTEight has noticed that in the first quarter of this year, Hainan Drinda New Energy Technology actively targeted overseas market demand, continuously expanding and certifying emerging market customers in Asia, Europe, Latin America, Australia, and became a major supplier of photovoltaic batteries in various countries and regions overseas. The company's market share in major overseas markets such as India and Turkey is already in a leading position. It is worth noting that Hainan Drinda New Energy Technology's expansion into overseas markets is not just about product exports. The company also plans to enhance the global market's battery product supply capacity through offshore production capacity. It is understood that Hainan Drinda New Energy Technology is currently planning to invest in 5GW of high-efficiency battery capacity in Oman, and the project is expected to be completed and put into production by the end of this year. As one of the important destinations in Hainan Drinda New Energy Technology's go-out strategy, Oman is one of the pioneers in the development of renewable energy projects in the Middle East and has set the expected goal of achieving net zero emissions by 2050. In addition, given the current situation, Oman is also one of the countries least affected by the trade war initiated by the Trump administration this month. According to existing information, the United States imposes a basic tariff of 10% on Oman, which is among the lowest among the target countries. Some brokerage analysts believe that the "equal tariffs" are expected to strengthen company's capacity advantage in Oman. Attempting to expand in overseas markets, this partly explains why Hainan Drinda New Energy Technology is determined to list on the Hong Kong stock exchange. After all, landing on the Hong Kong stock exchange is conducive to the establishment of an international capital operation platform for Hainan Drinda New Energy Technology, thereby providing protection for the company's future globalization development. In conclusion, it is undeniable that Hainan Drinda New Energy Technology is currently in a process of seeking a bottom in performance and waiting for a turning point. However, the positive aspect is that from the latest financial report, the "turnaround" seems to have appeared. Given that overseas markets are full of opportunities, it is unknown whether Hainan Drinda New Energy Technology will cultivate new growth momentum through strengthening global layout in the future. However, all of this needs to be verified by time. GMTEight will also continue to pay attention to the progress of Hainan Drinda New Energy Technology's listing on the Hong Kong stock exchange.