The Chinese solar industry is grappling with overcapacity, price wars, and export challenges, leading to ongoing losses into 2024. To cope, companies are turning to capital markets for support. For instance, Longi Green Energy (expected to raise 10 billion yuan) and Junda have sought listings to ease operational pressures. Meanwhile, Ningbo-based solar supplier Skymon has filed for an IPO in the US, aiming to list on NASDAQ under the ticker "PN" to raise $12 million by offering 2.7 million shares priced between $4 to $5 each.
Despite the industry's downturn, Skymon's financials show signs of recovery. In the 2023 fiscal year, their revenue dropped 14% to $50.82 million, with net profit falling nearly 16% to $1.81 million. However, in the first half of fiscal 2024, revenue grew by 1% to $22.48 million, and net profit rose 845% to $640,000, marking a rebound.
Skymon's resurgence is driven by its solar products, including cables and connectors, manufactured in a leased plant in Ningbo. Despite being identified as a solar product supplier, Skymon also engages in HPC server sales, which are procured from third parties. Over 25,000 HPC servers have been delivered globally in the past 13 years, although this segment negatively impacted financials in 2023 due to reduced investment amid a slowing global economy.
Solar product revenue for Skymon has steadily increased, contributing 89.7% of revenue in the first half of 2024, while HPC server revenue has significantly declined. Skymon's growth is fueled by demand from export-driven clients, primarily in Asia and Europe. Despite this, the company faces rising uncertainties in overseas markets, especially with potential policy changes in the US under Trump, which could impact trade dynamics and solar product exports.
Overall, Skymon’s growth relies heavily on overseas demand, which is now facing uncertainties, including tariff policies and geopolitical tensions. The company must navigate these challenges to sustain its revenue momentum.
