SHANGHAI, Apr. 9 (SMM) – Sacredsun Power noted in its 2012 annual report that it focused on the development of alternative energy and storage batteries last year. The result of this was that its operating revenues rose 24.27% from 2011’s RMB 960 million to RMB 1.19 billion for 2012. Net profits distributable to the listed company increased 8.68% to RMB 528 million, though its return on equity fell 1.81% to 6.98%.
Capacity expansion allowed Sacredsun Power’s lead-acid battery output to jump 30.06% to 2.25 million KVAH last year. Revenue from its backup battery business fell 1.55% to RMB 294 million, 30.12% of the total revenues, while that of its motive battery business fell 4.65% to RMB 226 million, 23.14% of the total. In contrast, income from alternative energy and energy storage batteries rose 5.16% to 45.47% of total revenues. The higher 19.45% margin from the alternative energy and storage battery units, as compared to the 17.55% and 10.67% margins in its backup and motive battery unites, drove the company to focus more intently on the former.
Sacredsun Power plans to continue enlarging its capacity with an emphasis on valve-regulated lead-acid batteries. Expansion and relocation of its lead-acid battery facilities will enable the company to increase its lead-acid battery capacity to 6 million KVAH. This strategy was reflected in Sacredsun Power’s fixed asset balance, works in progress, and long-term debt obligations, which grew 42%, 100%, and 600%, respectively, last year.
Noted as of concern was the fact that Sacredsun’s accounts receivable swelled to RMB 365 million last year, 30% of its total operating income, threatening liquidity. Like most producers of backup batteries, the company’s clientele is dominated by China’s three telecommunications giants, which leaves the company in a disadvantageous position as these clients are well-known for delaying payment, often for more than half a year, compounding operational costs and risks upstream.