In-Depth Analysis of the Market Competitiveness Behind Gaote Electronics' 3.8x Valuation Surge
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In-Depth Analysis of the Market Competitiveness Behind Gaote Electronics’ 3.8x Valuation Surge
According to public information, Gaote Electronics experienced significant valuation growth between December 2022 and December 2023:
| Time Node | Valuation Change | Capital Increase/Transfer Status |
|---|---|---|
| December 2022 | Pre-investment valuation of RMB 1 billion | Zhaoyingkechuang and others invested RMB 60 million at RMB 36.06 per share |
| May 2023 | Pre-investment valuation of RMB 2 billion | Changxin No.7 and Fuzhe Zitong participated at RMB 68.04 per share |
| July 2023 | Pre-investment valuation of RMB 2.5 billion | Sinopec Capital and Kunlun Capital participated at RMB 82.17 per share |
| September 2023 | Pre-investment valuation of RMB 2.708 billion | Longyan Xinda participated at RMB 83.67 per share |
| December 2023 | Pre-investment valuation of RMB 3.8 billion | Kunpeng Series, Montage Investment, etc. participated at RMB 44.44 per share |
The explosive growth of the energy storage industry is the fundamental factor supporting Gaote Electronics’ valuation surge. According to statistical data from CNESA (China Energy Storage Alliance), as of the end of 2024, the cumulative installed capacity of the global new energy storage market reached approximately 165.4GW, representing an 81.1% increase from the end of the previous year[2]. In the Chinese market, the newly commissioned installed power/energy capacity of new energy storage in 2024 was 43.7GW/109.8GWh, year-on-year growth of 103%/136%[2].
More importantly, the “Special Action Plan for Large-Scale Construction of New Energy Storage (2025–2027)” issued by the National Development and Reform Commission and the National Energy Administration clearly states that the national installed capacity of new energy storage will reach over 180GW by 2027[3]. This policy dividend is rapidly transforming into industrial momentum, providing sustained growth expectations for the energy storage BMS market.
According to CNESA’s “2024 White Paper on the Development of China’s New Energy Storage Industry”, Gaote Electronics ranked first in the 2023 Top 10 List of China’s New Energy Storage BMS Enterprises, and has maintained a leading position in BMS product shipments in the large-scale energy storage sector for three consecutive years[3].
The company, in collaboration with well-known domestic chip design enterprises, successfully developed AFE information collection chips and active balancing chips, taking the lead in achieving import substitution of core BMS chips and breaking the technological monopoly of foreign manufacturers[3]. In 2024, it launched the second-generation integrated BMS equipped with its self-developed AFE chip GT2818, realizing the synchronous collection of three parameters (voltage, temperature, and safety valve status) for the first time in the industry. By incorporating safety valve status into the sensing system, cell-level fault detection provides early warning of thermal runaway compared to traditional cabin-level gas detection[3].
As of the end of 2024, the company has 183 R&D personnel (accounting for over 30% of total staff), with cumulative R&D investment exceeding RMB 100 million[3]. R&D expenses from 2022 to the first half of 2025 were RMB 23.8862 million, RMB 38.6389 million, RMB 63.7784 million, and RMB 32.2798 million respectively, showing a continuous growth trend[2].
| Financial Indicators | 2022 | 2023 | 2024 | H1 2025 |
|---|---|---|---|---|
| Operating Revenue | RMB 346 million | RMB 779 million | RMB 919 million | - |
| Net Profit Attributable to Parent Company | RMB 54 million | RMB 88 million | RMB 98 million | - |
| Compound Annual Growth Rate of Operating Revenue | - | 63.31% | - | - |
| Proportion of Revenue from Energy Storage BMS | 88.34% | - | - | 93.92% |
From 2022 to 2024, the compound annual growth rate of Gaote Electronics’ main business revenue reached 63.31%[3]. In the first three quarters of 2025, the company achieved operating revenue of RMB 893 million and net profit attributable to parent company of RMB 92 million, year-on-year growth of 48.71% and 65.19% respectively[1]. From a fundamental perspective, performance growth has indeed provided certain support for valuation expansion.
Despite the valuation surge, Gaote Electronics’ gross profit margin has shown a sustained downward trend:
| Reporting Period | Gross Profit Margin of Main Business | Average of Comparable Peer Companies |
|---|---|---|
| 2022 | 28.37% | Approx. 30%+ |
| 2023 | 26.53% | - |
| 2024 | 26.02% | - |
| H1 2025 | 22.02% | Approx. 25%+ |
The gross profit margin dropped from 28.37% in 2022 to 22.02% in H1 2025, a decline of over 6 percentage points[1][2]. The Shenzhen Stock Exchange focused on the issue of “decline in gross profit margin of main business and product unit price of Gaote Electronics under cost reduction strategies” during the review meeting[4].
- Changes in market competition pattern, with significant declines in sales prices of downstream new energy storage systems
- Cost reduction demands from upstream and downstream of the energy storage industry chain are transmitted upstream
- Impact of price fluctuations in energy storage cells
- Increasingly fierce industry competition with a growing number of participants
Notably, the average selling price of Gaote Electronics’ core product, the energy storage BMS slave control module, dropped from RMB 349.02 per unit to RMB 315.10 per unit in 2024[3]. While product costs decreased simultaneously, the continuous weakening of profitability warrants caution.
At the end of each reporting period, the book value of Gaote Electronics’ accounts receivable was approximately RMB 185 million, RMB 402 million, RMB 506 million, and RMB 577 million respectively, accounting for over 50% of operating revenue in each period[2]. High accounts receivable balances carry the risk of bad debts, and the net cash flow from operating activities has been negative and lower than the net profit in the same period[2].
From the perspective of financing pricing, the company’s pre-investment valuation was RMB 3.8 billion in December 2023, and reached RMB 4.327 billion in March 2025, representing only about 14% valuation growth in one year, which is a significant slowdown compared to the 3.8x valuation growth rate throughout 2023[1][2].
A deeper issue is that, according to the prospectus disclosure, the company’s controlling shareholder Guiyuan Holdings and actual controller Xu Jianhong signed gambling agreements with most investors, including repurchase rights, restrictions on transfer of founder shares, preemptive rights, co-sale rights, preemptive subscription rights, anti-dilution rights, etc.[1] The existence of these clauses indicates that investors have certain concerns about the company’s long-term development prospects.
The AFE chip developed by Gaote Electronics in collaboration with domestic chip design enterprises has been installed in over 40GWh of projects[3]. This “chip-level” innovation has built a high technical barrier. However, it should be noted that as the energy storage BMS market expands, more competitors may accelerate technological catch-up.
According to industry data, the global market share of third-party energy storage BMS has risen to around 60% and continues to grow[3]. As a professional third-party manufacturer, Gaote Electronics has significant advantages in battery system understanding, scale-based cost control, and product performance driven by technological R&D.
The company began deploying its data services business in 2021, and initially has the ability to participate in virtual power plants and electricity market transactions through data services. As of the end of September 2025, it has connected over 3,000 micro-grid sites, and data services accounted for 8% of its revenue in 2024[3]. This transformation direction is expected to open up new growth space.
Intensified industry competition is a common challenge faced by BMS manufacturers. With the rapid development of the energy storage industry, the number of market participants is gradually increasing, competition is becoming increasingly fierce, and this is transmitted to upstream segments such as energy storage cells, BMS, and PCS[2].
The gross profit margins of comparable peer companies are generally higher than that of Gaote Electronics, reflecting the company’s relative disadvantage in cost control or product pricing[2]. The company’s gross profit margin of 22.02% in H1 2025 has fallen below the industry average.
Based on the 2024 net profit of approximately RMB 98 million, the static price-to-earnings (P/E) ratio corresponding to Gaote Electronics’ pre-investment valuation of RMB 3.8 billion is approximately 39x. If projected based on the 2025 estimated performance (RMB 92 million achieved in the first three quarters), the full-year net profit is expected to be approximately RMB 120 million, corresponding to a dynamic P/E ratio of approximately 32-36x.
Considering the high-growth characteristics of the energy storage industry and the company’s leading industry position, this valuation level is in the upper-middle range among new energy track companies, but it is not significantly overvalued.
- Changes in energy storage industry policies may affect demand
- Sustained decline in gross profit margin may compress profit margins
- Risk of accounts receivable recovery
- Intensified industry competition may further erode profits
- Sustained high-speed growth of new energy storage installed capacity
- Trend of market share growth of third-party BMS
- Technical barriers brought by BMS chipification
- Second growth curve from data services business
Gaote Electronics’ 3.8x valuation surge in one year is driven by both fundamental factors supported by industry prosperity and sentiment factors from the capital market’s enthusiasm for the energy storage track. From the perspective of market competitiveness, the company indeed has leading advantages in the energy storage BMS sector, with outstanding performance in industry position, technical barriers, customer resources, etc. However, issues such as sustained decline in gross profit margin and high accounts receivable reflect that the company is facing challenges from intensified industry competition.
[1] NetEase News - Gaote Electronics IPO: Valuation Surges by RMB 2.8 Billion, Once Withdrew Over RMB 600,000, Gross Profit Margin Continues to Decline (https://www.163.com/dy/article/KJ3AQPJS0515EF6A.html)
[2] Pedaily - An Energy Storage IPO Emerges from Hangzhou, Zhejiang, Valued at RMB 4.3 Billion (https://news.pedaily.cn/202601/559715.shtml)
[3] National Business Daily - Gaote Electronics Sprints for IPO: Breaking Through with BMS “Chipification”, Leading Value Leap in the Energy Storage Industry (https://www.nbd.com.cn/articles/2026-01-09/4213652.html)
[4] EET-China - The First Energy Storage Stock of the Year! This Energy Storage Enterprise Passes IPO Review (https://www.eet-china.com/mp/a467054.html)
Insights are generated using AI models and historical data for informational purposes only. They do not constitute investment advice or recommendations. Past performance is not indicative of future results.
About us: Ginlix AI is the AI Investment Copilot powered by real data, bridging advanced AI with professional financial databases to provide verifiable, truth-based answers. Please use the chat box below to ask any financial question.