Shuangdeng Group Co., Ltd. Stock Research Report

I. Company Introduction

Shuangdeng Group Co., Ltd. (hereinafter 'Shuangdeng Group'), established in 2011, specializes in energy storage solutions for big data and telecommunications. With three decades of expertise in energy storage batteries, this Jiangsu-based enterprise holds the distinction of being the global leader in energy storage battery shipments for telecommunications and data centers (Frost & Sullivan data, 2024: 11.1% market share). Prior to its Hong Kong IPO application, Shuangdeng filed for listing on the Shenzhen Stock Exchange in 2023 but withdrew in April 2024, subsequently pursuing a Hong Kong listing. This marks its second application to the Hong Kong Stock Exchange.

II. Business Transformation and Market Position

Shuangdeng has evolved into a comprehensive solutions provider spanning three sectors: telecom base stations, data centers, and power storage. Its product portfolio comprises lithium-ion batteries (primarily LFP) and lead-acid batteries, deployed across core applications: (1) Telecom Base Stations — Global shipment leader (2024: 9.2% market share) contributing >50% of historical revenue, with >35% domestic backup power share serving China Mobile, China Unicom, China Telecom, and Huawei; (2) Data Centers — Serving 80% of China's top self-operated data center operators and 90% of third-party operators, ranked #1 domestically (2024: 16.1% share); (3) Power Storage — Expanding grid-side and user-side projects to diversify applications.

III. Financials

Shuangdeng Group's revenue primarily derives from the sale of energy storage batteries. In 2022, revenue reached RMB 4.072 billion with net profit of RMB 281 million (gross margin 16.9%); in 2023, revenue rose to RMB 4.260 billion with net profit of RMB 385 million (gross margin 20.3%); in 2024, revenue further increased to RMB 4.499 billion, while net profit declined to RMB 353 million and the gross margin contracted to 16.7%.

For the first five months of 2025, Shuangdeng Group reported revenue of RMB 1.867 billion, reflecting a year-on-year growth of 33.36%. Gross profit stood at RMB 279 million with a gross margin of 14.9%. While topline growth has been steady, profitability is under pressure. Rising raw material costs and falling product prices have driven significant margin volatility.

From a revenue composition perspective, the data center energy storage segment surged to account for 46.7% of revenue in the first five months of 2025, surpassing telecom base stations for the first time. As of May 31, 2025, Shuangdeng Group held RMB 617 million in cash and cash equivalents. By the end of 2024, accounts receivable had reached RMB 2.318 billion (63.68% of current assets), while inventory stood at RMB 514 million.

IV. Industry Growth Potential: The Golden Era of Energy Storage

The energy storage market is experiencing rapid expansion. According to Frost & Sullivan, the global energy storage battery market is projected to grow from 746.8 GWh in 2024 to 6,810.1 GWh by 2030. The global number of 5G base stations is expected to surpass 20 million by 2025. In 2024, global data center electricity consumption reached 415 TWh, and it is forecast to exceed 945 TWh by 2030, representing an average annual growth rate of 15%. Data centers require backup power within 100 milliseconds of an outage, making high-rate batteries an essential technology.

Shuangdeng's leading position, along with its deep expertise in telecom and data center energy storage, gives it significant potential. Leveraging its first-mover advantage, Shuangdeng has spearheaded the formulation of high-rate battery industry standards, shipped its self-developed 587Ah high-capacity cells, and launched semi-solid energy storage systems. This forward-looking deployment secured Shuangdeng's position as the sole winning bidder for Alibaba's Zhangbei Data Center project.

V. Company Strengths and Risks

Core Competitiveness

1. Partnerships with 5 of the world's top 10 telecom operators; over 8 years of collaboration with China's three major telecom carriers; 80% penetration among leading data center enterprises, with full coverage of Alibaba, Tencent, and ByteDance.

2. Competitive edge in lead-acid batteries with superior low-temperature performance; ongoing upgrades in lithium-ion energy density; active reserves in sodium-ion and solid-state batteries, enabling risk hedging across multiple technology pathways.

3. Rapid ramp-up with the Malaysian plant achieving 'same-year commissioning'; successful rollouts of energy storage projects in Cambodia and Mongolia.

Risks and Concerns

1. 64.6% of revenue is derived from lead-acid batteries, leaving the company vulnerable to the EU's 2030 lead-acid restrictions. The 'de-lead-acid' trend in telecom base stations is accelerating, yet Shuangdeng's lithium battery penetration in base stations is only 33.3%, lagging the industry average above 50%.

2. R&D expense ratio stands at only 2.3%–2.8%, well below the industry average of 4.1%–4.4%. Sodium-ion batteries remain at the laboratory stage.

3. Customer concentration is high, with the top five customers contributing 46.1% of revenue. Bargaining power with telecom operators is limited, forcing the company to adopt strategic price concessions.

VI. Investment Value Assessment and Outlook

Shuangdeng Group's IPO raised a total of HKD 2.75 billion, with proceeds allocated as follows: 52% (HKD 1.43 bn) to Southeast Asia lithium battery capacity construction (3 GWh capacity to cover SE Asia, Europe, and US demand); 18% (HKD 495 mn) to next-generation R&D (semi-solid and sodium-ion breakthroughs); 7% (HKD 193 mn) to lead-acid line upgrades for EU regulatory compliance; 15% (HKD 413 mn) to overseas marketing expansion in Africa and Europe; and 8% (HKD 220 mn) to working capital to alleviate the RMB 2.31 bn receivables funding pressure.