Equity Research: GoodWe (688390.SH) – Turning the Corner: Q2 Profitability Restored Amidst Surging Overseas Demand

Date: September 8, 2025
Ticker: 688390.SH (Shanghai Stock Exchange STAR Market)
Sector: Power Equipment / Photovoltaic (PV) & Energy Storage
Rating: OUTPERFORM (Maintained)
Current Price: CNY 53.37
Target Price: Implied via Valuation Multiples (See Section 5)
Market Cap: CNY 12.95 Billion
Analysts: Jiaxiong Wu (S1300523070001), Zhen Gu (S1300525040003)

Executive Summary

GoodWe Technologies Co., Ltd. ("GoodWe" or the "Company") has released its interim financial results for the first half of 2025 (1H25), marking a pivotal inflection point in its operational and financial trajectory. The Company reported a significant year-over-year (YoY) reduction in losses for 1H25, culminating in a return to profitability in the second quarter (2Q25). This turnaround is underpinned by robust volume growth in both grid-tied and hybrid inverters, alongside an accelerating expansion in energy storage battery sales.

Our analysis indicates that GoodWe is successfully navigating the post-inventory correction phase of the global solar and storage markets. The Company’s strategic focus on high-growth overseas markets, particularly in Australia and emerging Southeast Asian economies, is yielding tangible results. A key catalyst for future growth is the Australian Federal Government’s newly launched "Cheaper Home Batteries" initiative, which provides substantial subsidies for residential energy storage systems (RESS). Given GoodWe’s strong market presence in Australia, we anticipate this policy will drive disproportionate benefits to the Company’s inverter and battery pack shipments in the second half of 2025 (2H25) and beyond.

Consequently, while we have adjusted our earnings per share (EPS) forecasts for 2025-2027 downward to reflect a more conservative margin outlook and competitive pricing environment, we maintain our OUTPERFORM rating. The revised forecasts stand at CNY 1.17, CNY 1.94, and CNY 2.60 for 2025, 2026, and 2027, respectively. At the current share price of CNY 53.37, the stock trades at forward P/E multiples of 45.6x, 27.5x, and 20.5x for the respective years. We believe the market has not fully priced in the sustainability of the Q2 profitability recovery and the upside potential from the Australian subsidy scheme, offering an attractive risk-reward profile for institutional investors with a 6-12 month horizon.

Key Investment Highlights:

1. Financial Turnaround: 2Q25 net profit attributable to shareholders reached CNY 11 million, marking a sequential swing from loss to profit and a YoY increase of 129.02%.
2. Volume Growth: Inverter shipments grew 43.45% YoY in 1H25, with storage inverters up 46.90%. Battery sales surged 62.65% YoY to 214.47 MWh.
3. Policy Tailwind: The AUD 2.3 billion Australian home battery subsidy program (launched July 2025) is a direct catalyst for GoodWe’s core overseas business.
4. Valuation Reset: Despite lower absolute EPS forecasts, the forward P/E of 27.5x for 2026 reflects a reasonable valuation for a company returning to double-digit profit growth (65.6% projected for 2026).

Key Takeaways

1. Financial Performance Analysis: From Loss Reduction to Profitability

The 1H25 financial results demonstrate a clear stabilization of GoodWe’s bottom line, driven by top-line revenue growth and improved operational efficiency.

1.1 Revenue and Profitability Trends

In 1H25, GoodWe achieved total operating revenue of CNY 4.086 billion, representing a 29.80% YoY increase. This growth rate significantly outpaces the broader industry average, indicating successful market share gains despite macroeconomic headwinds in certain regions.

• Net Profit Dynamics: The Company reported a net loss attributable to shareholders of CNY 17 million for 1H25. While still negative, this represents a substantial narrowing of losses compared to the same period in the previous year. More importantly, the quarterly breakdown reveals a decisive trend reversal:
  • 2Q25 Net Profit: CNY 11 million.
  • 2Q25 YoY Growth: +129.02%.
  • Sequential Change: Swing from loss in 1Q25 to profit in 2Q25.

This sequential improvement suggests that the destocking pressures that plagued the European and global markets in 2023 and early 2024 have largely dissipated. The Company’s ability to generate positive net income in Q2 validates the effectiveness of its cost-control measures and the recovery of demand in key end markets.

1.2 Margin Structure and Cost Analysis

A detailed examination of the income statement reveals mixed signals regarding margins, which necessitated our adjustment of future earnings forecasts.

• Gross Margin Compression: The gross profit margin declined by 2.84 percentage points YoY to 19.92% in 1H25 (from 22.76% in 1H24). Gross profit amounted to CNY 814 million, up 13.60% YoY. The compression in gross margin is primarily attributed to:

  1. Intense Price Competition: The global inverter market, particularly in the residential segment, has seen aggressive pricing strategies from competitors to clear inventory and gain share.
  2. Product Mix Shift: While higher-margin premium products remain strong, the rapid growth in battery sales (which typically carry lower margins than pure inverter hardware in the current cycle) has slightly diluted the overall blended margin.
  3. Cost of Goods Sold (COGS): COGS increased by 34.58% YoY to CNY 3.27 billion, outpacing revenue growth (29.80%), further confirming margin pressure.

• Operating Expenses:

  • Selling Expenses: Increased by 21.20% YoY to CNY 310.39 million. This rise is consistent with the Company’s aggressive expansion into new overseas markets and increased marketing efforts to support the battery product line. The selling expense ratio remained stable relative to revenue growth, indicating efficient scaling.
  • Administrative Expenses: Rose by 13.21% YoY to CNY 182.55 million, reflecting normal operational expansion.
  • R&D Expenses: Although not explicitly detailed in the summary table, the full-year forecast implies continued heavy investment in R&D (projected CNY 632 million for 2025), crucial for maintaining technological leadership in hybrid inverters and energy management systems (EMS).

• Non-Operating Items:

  • Financial Expenses: A notable improvement was seen in financial expenses, which turned into a net gain of CNY 29.95 million (compared to a cost of CNY 3.35 million in 1H24). This swing of nearly CNY 33 million is largely attributable to favorable exchange rate movements and interest income, providing a temporary boost to the bottom line. Investors should note that this is a non-recurring benefit and may not persist if currency dynamics shift.
  • Investment Income: Surged by 1,126.97% YoY to CNY 25.58 million, contributing positively to pre-tax profits.
  • Asset Impairment: Asset impairment losses decreased by 14.21% YoY to CNY 38.28 million, suggesting better inventory management and reduced write-downs of obsolete stock.

1.3 Cash Flow and Balance Sheet Health

The Company’s liquidity position remains robust, supporting its ongoing expansion and R&D initiatives.

• Cash Reserves: As of June 30, 2025, monetary funds stood at approximately CNY 1.355 billion (based on 2025E balance sheet progression from 2024 actuals of CNY 1.073 billion, adjusted for H1 cash flow). This provides ample buffer for working capital needs.
• Inventory Levels: Inventory remains elevated at CNY 3.437 billion (2025E), up from CNY 2.638 billion in 2024. While high, this is strategic to support the anticipated surge in demand from the Australian subsidy program and other overseas markets. The inventory turnover ratio needs to be monitored closely in 2H25 to ensure these stocks are converted into sales efficiently.
• Debt Profile: The Company maintains a healthy debt structure with short-term borrowings at CNY 1.056 billion (2025E) and long-term borrowings at CNY 187 million. The net debt-to-equity ratio is projected to be near zero (0.0), indicating a conservative leverage profile that minimizes financial risk in a high-interest-rate environment.

2. Operational Drivers: Shipment Volume and Product Mix

The core strength of GoodWe’s 1H25 performance lies in its exceptional shipment growth across all major product categories. This volume-led growth demonstrates strong brand equity and distribution channel resilience.

2.1 Inverter Shipments: Broad-Based Growth

Total inverter sales reached 399,500 units in 1H25, a 43.45% YoY increase. This growth is split between two primary segments:

• Grid-Tied Inverters: The 43.14% growth in grid-tied units indicates that GoodWe is not solely reliant on the volatile residential storage market. Its presence in commercial and industrial (C&I) and small utility-scale projects provides a stable revenue base. The consistency of growth here suggests successful penetration in emerging markets where grid infrastructure upgrades are ongoing.
• Storage Inverters: The 46.90% growth in storage inverters outpaces the grid-tied segment, highlighting the Company’s successful pivot towards integrated energy solutions. This segment is critical for higher average selling prices (ASPs) and customer stickiness, as storage systems often require more complex installation and after-sales support.

2.2 Energy Storage Battery Sales: The New Growth Engine

Perhaps the most impressive metric in the 1H25 report is the performance of the energy storage battery business.

• Sales Volume: 214.47 MWh sold in 1H25.
• YoY Growth: 62.65%.

This rapid acceleration in battery sales confirms that GoodWe’s strategy of bundling inverters with proprietary battery packs (the "All-in-One" solution) is gaining traction. The higher growth rate of batteries (62.65%) compared to storage inverters (46.90%) suggests an increasing attachment rate—customers are buying more battery capacity per inverter unit, or existing inverter customers are adding batteries to their systems.

Strategic Implication:
The battery business transforms GoodWe from a pure component supplier to a comprehensive energy storage system provider. This integration allows for:
1. Higher Share of Wallet: Capturing value from both the power conversion and energy storage components.
2. Brand Differentiation: Proprietary batteries optimized for GoodWe inverters offer better performance and warranty terms, creating a moat against generic third-party battery integrators.
3. Revenue Visibility: Battery replacements and expansions provide a longer-term recurring revenue stream compared to one-off inverter sales.

However, investors must note that battery margins are currently under pressure due to raw material price fluctuations and intense competition from dedicated battery manufacturers (e.g., CATL, BYD) who are also moving downstream. GoodWe’s ability to maintain profitability in this segment will depend on its supply chain management and scale efficiencies.

3. Catalyst: The Australian "Cheaper Home Batteries" Initiative

A pivotal external driver for GoodWe’s future performance is the policy landscape in Australia, one of its key overseas markets.

3.1 Policy Overview

In July 2025, the Australian Federal Government officially launched the "Cheaper Home Batteries" plan.
* Total Budget: AUD 2.3 billion.
* Duration: 2025–2030.
* Subsidy Mechanism: Provides a discount of up to 30% on the cost of household battery systems.
* Objective: To accelerate the adoption of residential energy storage, enhance grid stability, and reduce household electricity bills amidst high energy prices.

3.2 Impact Assessment on GoodWe

Australia is a mature market for residential solar and storage, characterized by high electricity prices and high solar penetration. GoodWe has established a strong brand presence and distribution network in this region over the past decade.

1. Demand Stimulation: The 30% subsidy effectively lowers the payback period for residential battery investments, making them economically viable for a much broader segment of homeowners. We estimate this could double or triple the annual addressable market for home batteries in Australia over the next 2-3 years.
2. Market Share Advantage: As an incumbent player with established relationships with Australian installers and distributors, GoodWe is well-positioned to capture a significant portion of this subsidized demand. New entrants will face barriers in establishing trust and service networks quickly enough to capitalize on the immediate surge.
3. Product Fit: GoodWe’s hybrid inverters and battery packs are specifically designed for the single-phase and three-phase residential configurations common in Australian homes. The Company’s local technical support team can handle the expected increase in installation and commissioning requests.
4. Revenue Visibility for 2H25 and 2026: Since the policy launched in July 2025, the order book for 2H25 is already seeing an uptick. We expect the full impact to materialize in 2026, aligning with our projected 65.6% net profit growth for that year.

3.3 Broader Overseas Opportunities

Beyond Australia, the report highlights Southeast Asia as an emerging high-growth market. Countries like Vietnam, Thailand, and the Philippines are experiencing rising electricity costs and grid instability, driving demand for behind-the-meter storage solutions. GoodWe’s competitive pricing and robust product portfolio make it a preferred choice in these price-sensitive yet high-potential markets.

4. Earnings Forecast Adjustments and Valuation

Based on the 1H25 results and the updated market outlook, we have revised our financial model for GoodWe.

4.1 Revised Earnings Per Share (EPS) Forecasts

We have adjusted our EPS estimates for 2025, 2026, and introduced a forecast for 2027.

Key Reasons for Downgrade:
1. Margin Compression: The 1H25 gross margin of 19.92% was lower than our previous assumptions. We now project a slower recovery in margins, with gross margin estimated at 21.8% for 2025, 23.5% for 2026, and 23.7% for 2027. This reflects the reality of a highly competitive global inverter market where price wars are prevalent.
2. Expense Ramp-Up: To capture the opportunities in Australia and Southeast Asia, GoodWe is increasing its sales and marketing expenditures. We have adjusted our selling expense forecasts upwards, which impacts operating profit in the near term.
3. Conservative Revenue Recognition: While volume growth is strong, ASPs (Average Selling Prices) have declined. We have adjusted our revenue growth assumptions to reflect lower ASPs, even as volumes rise.

Positive Counterpoints in the New Forecast:
* Profit Growth Trajectory: Despite the lower absolute EPS, the growth rate of net profit is projected to be robust: 65.6% YoY growth in 2026 and 34.0% YoY growth in 2027. This indicates that the Company is on a clear path to restoring profitability momentum.
* Long-Term Margin Expansion: We forecast gross margins to expand from 21.8% in 2025 to 23.7% in 2027, driven by economies of scale in battery production and a shift towards higher-value integrated solutions.

4.2 Valuation Analysis

At the current market price of CNY 53.37, GoodWe’s valuation metrics are as follows:

Valuation Interpretation:
* Forward P/E Appeal: The 2026E P/E of 27.5x is attractive for a company projected to grow net profits by over 65% in that year. The PEG ratio (Price/Earnings-to-Growth) is well below 1.0, suggesting the stock is undervalued relative to its growth potential.
* Historical Context: Compared to its historical average P/E during high-growth phases (often 30-40x), the current multiple offers a margin of safety, provided the earnings recovery materializes as forecast.
* Peer Comparison: GoodWe trades at a premium to some pure-play inverter manufacturers due to its integrated storage offering, but at a discount to high-growth tech-enabled energy firms. Given its unique position in the residential storage niche, the valuation is justified.

4.3 Dividend Policy

The Company did not pay a dividend in 2024 due to losses. We forecast a resumption of dividends in 2026 (CNY 0.3 per share) and 2027 (CNY 0.4 per share), yielding 0.5% and 0.7% respectively. While the yield is low, the resumption signals management’s confidence in sustained cash flow generation.

Risks / Headwinds

While the outlook is positive, institutional investors must consider the following risks that could derail the recovery thesis:

1. Raw Material Price Volatility

• Exposure: GoodWe’s cost structure is sensitive to the prices of electronic components (IGBTs, chips) and battery raw materials (Lithium Carbonate, Nickel, Cobalt).
• Risk: If raw material prices rise unexpectedly, gross margins could compress further, eroding profitability. While lithium prices have stabilized recently, any supply chain disruption could lead to cost spikes.
• Mitigation: The Company employs hedging strategies and long-term supply contracts, but these may not fully insulate it from sharp market movements.

2. Intensifying Price Competition

• Market Dynamics: The global inverter market is fragmented, with strong competitors like Huawei, Sungrow, Ginlong (Solis), and Deye. To maintain market share, companies may engage in aggressive price cutting.
• Impact: Sustained price wars could prevent the anticipated margin recovery in 2026-2027, leading to further downgrades in EPS forecasts.
• Specific Threat: Chinese competitors expanding aggressively in Europe and Australia could dilute GoodWe’s market share and pricing power.

3. Policy and Regulatory Uncertainty

• Dependence on Subsidies: The bullish case for 2H25 and 2026 relies heavily on the Australian subsidy program. Any delay in implementation, reduction in budget, or change in eligibility criteria could significantly impact demand.
• Trade Barriers: Increasing protectionism in key markets (e.g., EU anti-subsidy investigations, US tariffs) could hinder GoodWe’s export capabilities. While GoodWe is less exposed to the US market than some peers, European regulatory changes remain a risk.
• Grid Connection Rules: Changes in net-metering policies or grid connection standards in key markets (like Australia or Germany) could reduce the economic attractiveness of solar-plus-storage systems.

4. Execution Risk in New Business Lines

• Battery Integration: Expanding into battery manufacturing and integration requires different competencies than inverter design. Quality control issues, safety incidents, or warranty claims related to batteries could damage the brand reputation and incur significant liabilities.
• New Market Entry: Expansion into Southeast Asia and other emerging markets carries execution risks, including currency fluctuations, political instability, and logistical challenges.

5. Foreign Exchange Fluctuations

• Revenue Exposure: A significant portion of GoodWe’s revenue is generated overseas in currencies such as EUR, AUD, and USD.
• Risk: Appreciation of the CNY against these currencies would reduce the reported revenue and profit in CNY terms. Conversely, while FX gains boosted 1H25 results, a reversal could create headwinds. The Company’s natural hedging (matching costs and revenues in same currencies) is partial, leaving some exposure.

6. Inventory Obsolescence

• High Inventory Levels: With inventory at CNY 3.4 billion, there is a risk of obsolescence if technology shifts rapidly (e.g., new battery chemistries or inverter topologies) or if demand slows unexpectedly. Write-downs would directly impact net profit.

Rating / Sector Outlook

Sector Outlook: Overweight

The global photovoltaic and energy storage sector is transitioning from a phase of inventory correction to one of sustainable growth, driven by:
1. Energy Transition Mandates: Global commitments to carbon neutrality continue to drive long-term demand for renewable energy.
2. Grid Stability Needs: As renewable penetration increases, the need for flexible storage solutions becomes critical, favoring companies with strong storage offerings.
3. Cost Competitiveness: The levelized cost of energy (LCOE) for solar-plus-storage is reaching parity with fossil fuels in many regions, enabling organic demand without subsidies.

Within this sector, we prefer companies with:
* Strong overseas distribution channels.
* Integrated product portfolios (Inverter + Storage).
* Resilient balance sheets.

GoodWe fits this profile, particularly given its exposure to the high-margin residential storage segment and its proactive response to policy tailwinds in Australia.

Company Rating: OUTPERFORM (Maintained)

We maintain our OUTPERFORM rating on GoodWe (688390.SH).

Rationale:
1. Inflection Point Confirmed: The return to profitability in 2Q25 is a credible signal that the worst of the industry downturn is behind the Company.
2. Visible Catalysts: The Australian subsidy program provides a clear, quantifiable demand driver for the next 12-24 months.
3. Attractive Valuation: The forward P/E of 27.5x for 2026, coupled with a projected 65.6% profit growth, offers a compelling entry point for growth-oriented investors.
4. Strategic Positioning: GoodWe’s focus on residential storage differentiates it from peers focused solely on utility-scale projects, allowing it to capture higher value-added services and customer loyalty.

Price Target Implication:
While we do not issue a specific numeric target price in this format, the valuation multiples suggest that if the Company achieves its 2026E EPS of CNY 1.94, and the market assigns a peer-average P/E of 30x (justified by its growth rate), the implied share price would be approximately CNY 58.20. This represents a potential upside of ~9% from the current price of CNY 53.37, excluding any multiple expansion driven by sentiment improvements. Furthermore, if the 2027E EPS of CNY 2.60 is realized, the long-term upside is significantly higher.

Investment View

1. Strategic Recommendation for Institutional Investors

For institutional portfolios seeking exposure to the renewable energy transition, GoodWe presents a tactical buy opportunity with a strategic hold perspective.

• Short-Term (6-12 Months): The stock is likely to be driven by quarterly earnings beats and news flow regarding the uptake of the Australian subsidy. Investors should monitor 2H25 shipment data closely. Any confirmation of accelerated battery sales in Australia will serve as a positive trigger.
• Medium-Term (1-3 Years): The investment thesis rests on GoodWe’s ability to sustain its growth in the residential storage segment and expand its footprint in Southeast Asia. Success in these areas will validate the higher valuation multiples and drive long-term capital appreciation.

2. Key Monitoring Metrics

Investors should track the following key performance indicators (KPIs) in upcoming quarterly reports:

1. Gross Margin Trend: Watch for stabilization or improvement in gross margins. A decline below 19% would be a red flag, indicating unsustainable pricing pressure.
2. Inventory Turnover Days: A reduction in inventory days would indicate efficient sales conversion and reduced risk of write-downs.
3. Overseas Revenue Share: An increasing proportion of revenue from overseas (especially Australia and Southeast Asia) would confirm the success of the international expansion strategy.
4. Battery Attachment Rate: The ratio of battery sales to storage inverter sales. An increasing ratio indicates successful cross-selling and higher customer value.
5. Operating Cash Flow: Positive and growing operating cash flow is essential to fund R&D and expansion without excessive debt.

3. Comparative Advantage

Compared to its peers, GoodWe offers a unique blend of characteristics:

• Vs. Huawei/Sungrow: GoodWe is more focused on the distributed/residential market, which is less capital-intensive and has higher barriers to entry due to installer relationships. It is less exposed to the cyclical nature of large utility projects.
• Vs. Ginlong (Solis)/Deye: GoodWe has a stronger brand presence in Europe and Australia and a more advanced integrated storage solution. Its R&D intensity is comparable, but its geographic diversification provides better risk mitigation.

4. Conclusion

GoodWe’s 1H25 results mark a turning point. The Company has successfully navigated the industry’s inventory correction and is now positioned to benefit from structural growth drivers in the global energy storage market. The Australian subsidy program acts as a powerful near-term catalyst, while the Company’s expanding battery business provides a long-term growth engine.

Despite the downward revision in EPS forecasts, the current valuation adequately reflects the near-term margin pressures and offers an attractive entry point for investors willing to look through the volatility. The combination of improving profitability, strong volume growth, and favorable policy tailwinds supports our OUTPERFORM rating. We recommend institutional investors accumulate positions on dips, with a focus on the 2026-2027 earnings growth trajectory.

Appendix: Detailed Financial Tables

Table 1: Income Statement Summary (CNY Million)

Table 2: Balance Sheet Highlights (CNY Million)

Table 3: Cash Flow Statement Summary (CNY Million)

Table 4: Key Financial Ratios

Deep Dive: Strategic Analysis of GoodWe’s Market Position

To provide a comprehensive view for institutional investors, we delve deeper into the strategic nuances of GoodWe’s business model and competitive landscape.

1. The "Inverter + Storage" Synergy

GoodWe’s core competitive advantage lies in its integrated approach. Unlike companies that sell only inverters or only batteries, GoodWe offers a seamless ecosystem.

• Technical Integration: GoodWe’s hybrid inverters are designed to communicate directly with its battery packs via proprietary protocols. This ensures optimal charging/discharging cycles, extended battery life, and enhanced safety features. Third-party integrations often suffer from compatibility issues or suboptimal performance.
• Single-Point Responsibility: For installers and end-users, dealing with a single vendor for both inverter and battery simplifies procurement, installation, and warranty claims. This reduces friction in the sales process and enhances customer satisfaction.
• Energy Management System (EMS): GoodWe’s SEMS (Smart Energy Management System) platform allows users to monitor and control both inverter and battery performance via a single app. This software layer creates stickiness and provides valuable data for future service offerings.

2. Geographic Diversification Strategy

GoodWe has successfully reduced its reliance on any single market.

• Europe: Traditionally a strong market, Europe faced inventory issues in 2023-2024. However, with destocking complete, demand is normalizing. GoodWe’s strong brand recognition in Germany, Italy, and the Netherlands positions it well for recovery.
• Australia: As discussed, the new subsidy program is a game-changer. GoodWe’s early entry into the Australian market gives it a distinct advantage over latecomers.
• Latin America & Southeast Asia: These regions are emerging as high-growth markets due to rising electricity costs and unreliable grids. GoodWe’s cost-effective solutions are well-suited for these price-sensitive markets. The Company is actively expanding its local teams and distributor networks in Brazil, Mexico, Vietnam, and Thailand.
• North America: GoodWe has a limited presence in the US due to trade barriers and strong domestic competition. This is a strategic choice to avoid high-risk markets, focusing instead on regions where it can achieve dominant market share.

3. R&D and Innovation Pipeline

GoodWe continues to invest heavily in R&D (7.0% of revenue in 2025E). Key areas of focus include:

• High-Voltage Hybrid Inverters: Catering to larger residential and C&I applications.
• Solid-State Battery Integration: Preparing for next-generation battery technologies.
• AI-Driven Energy Management: Using machine learning to optimize energy usage based on weather forecasts and user behavior.
• Grid-Forming Inverters: Developing inverters that can stabilize weak grids, a crucial feature for markets with high renewable penetration.

This innovation pipeline ensures that GoodWe remains at the forefront of technological advancements, protecting its market share against commoditization.

4. Supply Chain Resilience

GoodWe has diversified its supply chain to mitigate risks.

• Component Sourcing: It sources IGBTs and chips from multiple suppliers, including Infineon, ON Semiconductor, and Chinese domestic suppliers. This reduces dependency on any single vendor.
• Battery Cells: GoodWe partners with leading cell manufacturers (e.g., CATL, EVE Energy) to secure supply and maintain quality. It does not manufacture cells itself, avoiding the capital intensity and technological risk of cell production.
• Manufacturing Footprint: With manufacturing bases in China, GoodWe benefits from the country’s mature PV supply chain and cost efficiencies. It is also exploring assembly options in other regions to mitigate trade risks.

Final Thoughts

GoodWe stands at a critical juncture. The 1H25 results confirm that the Company has weathered the storm of industry consolidation and inventory correction. The return to profitability in Q2 is not a fluke but a result of disciplined execution and strategic positioning.

The Australian subsidy program provides a rare, visible, and substantial catalyst for growth. Combined with the secular trend towards residential energy storage globally, GoodWe is well-placed to deliver strong earnings growth in 2026 and 2027.

While risks such as margin pressure and competition remain, they are largely priced into the current valuation. The downward revision in EPS forecasts has created a more realistic and sustainable base for future growth. For institutional investors, GoodWe offers a compelling combination of near-term catalysts, medium-term growth visibility, and long-term strategic relevance in the energy transition.

We reiterate our OUTPERFORM rating and encourage investors to consider accumulating positions, particularly on any market-wide weakness, to capitalize on the expected earnings recovery and multiple expansion in the coming quarters.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions. The views expressed herein are those of the analysts and do not necessarily reflect the views of BOC International (China) Co., Ltd.