Arctech Solar (SH688408) Photovoltaic Mounting System Gross Profit Margin Analysis Report

Based on the latest financial data and public disclosure information, the following is a detailed analysis of the gross profit margin of Arctech Solar’s photovoltaic mounting system business:

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Year	Gross Profit Margin	Operating Revenue (RMB 100 million)	YoY Change
2020	20.33%	31.29	-
2021	11.42%	24.15	-8.91pct
2022	11.56%	37.03	+0.14pct
2023	17.21%	63.90	+5.65pct
2024	18.19%	90.26	+0.98pct

The company’s gross profit margin shows a distinct

. From 2021 to 2022, affected by fluctuations in raw material prices in the industry, intensified market competition and the impact of the pandemic, the gross profit margin was in a trough (approximately 11.5%). Since 2023, with the recovery of the photovoltaic industry’s prosperity and the optimization of the company’s product structure, the gross profit margin has steadily recovered to over 18% [0][1].

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According to the company’s 2024 Interim Report disclosure [1]:

Product Type	Gross Profit Margin	Remarks
Comprehensive Gross Profit Margin of Mounting System Business	19.75%	YoY increase of 3.35 percentage points
Tracker Mounting System	20.57%	High-value-added product, contributes the main profit
Fixed Mounting System	14.15%	Relatively low gross profit margin

1. Product Structure Optimization
   : The construction commencement rate of photovoltaic power plants in overseas markets such as the Middle East and India has increased YoY, and most overseas deliveries are tracker mounting systems, increasing the proportion of high-margin products [1]
2. Cost Reduction Strategy Implementation
   : The company continues to promote cost optimization measures
3. Technology Innovation-driven
   : Launched the new-generation “Tianrou” product (combination of wireless multi-point parallel drive technology and flexible mounting system)

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Quarter	Gross Profit Margin	Operating Revenue (RMB 100 million)
Q1 2024	20.79%	18.14
Q2 2024	16.32%	15.62
Q3 2024	20.21%	26.06
Q4 2024	15.86%	30.44
Q1 2025	18.90%	15.59
Q2 2025	15.30%	24.78
Q3 2025	16.37%	13.41

There are certain fluctuations in gross profit margin between quarters, mainly affected by the following factors:

• Seasonal Factors
  : Differences in revenue recognition timings due to the delivery rhythm of overseas projects
• Product Structure Changes
  : Changes in the delivery proportion of tracker mounting systems and fixed mounting systems
• Raw Material Cost Fluctuations
  : Price changes of major raw materials such as steel

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As of the end of H1 2024, the company has

, including:

• Tracker Mounting Systems: Approximately RMB 5.549 billion (83% of total)
• Fixed Mounting Systems: Approximately RMB 1.073 billion
• Others: Approximately RMB 0.047 billion

A large number of tracker mounting system orders provide support for maintaining high gross profit margins in the future [1].

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1. Raw Material Price Risk
   : Fluctuations in steel and aluminum prices will directly affect gross profit margin
2. International Trade Policy Risk
   : Localized trade policies in overseas markets may affect export competitiveness
3. Geopolitical Risk
   : International shipping issues such as the Red Sea conflict increase transportation costs [1]
4. Intensified Industry Competition
   : The number of participants in the photovoltaic mounting system industry has increased, and price competition pressure continues

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[0] Jinling API Financial Data - Arctech Solar (688408.SS) Annual and Quarterly Financial Data

[1] Jiangsu Arctech New Energy Technology Co., Ltd. 2024 Interim Report (https://pdf.dfcfw.com/pdf/H2_AN202408271639489567_1.pdf)

[2] Jiangsu Arctech New Energy Technology Co., Ltd. 2023 Annual Report (https://en.arctechsolar.com/wp-content/uploads/2024/12/2023-annual-business-report-1.pdf)

[3] Jiangsu Arctech New Energy Technology Co., Ltd. 2025 Interim Report (https://stockmc.xueqiu.com/202508/688408_20250828_3C7I.pdf)

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: The above chart shows the gross profit margin change trend of Arctech Solar from 2020 to 2024 and its comparison with operating revenue. It can be seen that after experiencing the trough in 2021-2022, the company’s gross profit margin showed a steady recovery trend in 2023-2024, while the operating revenue scale achieved substantial growth.