Executive Summary / Key Takeaways

• Sunrise New Energy Co., Ltd. (EPOW) is undergoing a significant strategic transformation, pivoting from a diversified services background to become a focused, rapidly expanding player in the critical graphite anode materials market for electric vehicles (EVs) and energy storage.
• The company is aggressively expanding its production capacity, highlighted by a new 20,000-ton high-end graphite anode production line and a strategic 1GW lithium battery pack project in the U.S., aiming to capture surging demand and drive substantial future revenue and profit growth.
• EPOW possesses a technological edge, particularly in its proprietary graphite anode materials and its promising sodium-ion battery hard carbon anode research, which offers quantifiable performance benefits crucial for next-generation battery solutions.
• Despite a history of net losses, recent operational efficiencies and increased in-house graphitization have propelled the company to a return to profitability in July and August 2025, signaling a potential inflection point in its financial trajectory.
• While facing intense competition from larger, more established players and significant capital expenditure requirements, EPOW's focused strategy, technological differentiation, and capacity build-out position it to capitalize on robust industry tailwinds in the global energy transition.

The Battery Revolution and EPOW's Strategic Pivot

The global energy landscape is in the midst of a profound transformation, driven by the accelerating adoption of electric vehicles and the critical need for advanced energy storage solutions. This revolution is creating immense demand for foundational components, particularly battery anode materials. Sunrise New Energy Co., Ltd. (EPOW), originally founded in 2014 as Global Internet of People, Inc., has strategically evolved to position itself at the heart of this shift. The company has transitioned from its legacy peer-to-peer knowledge sharing and enterprise service platform business to become a dedicated manufacturer and innovator of graphite anode materials for EVs and other lithium-ion batteries.

This strategic pivot is underpinned by an overarching strategy focused on technological innovation, aggressive capacity expansion, and securing long-term supply contracts with leading battery manufacturers. EPOW's commitment to this strategy has already yielded significant recognition, as the company was recently identified as one of the top eleven global suppliers of artificial graphite anode materials for both energy storage and EV batteries. Furthermore, it has established itself as one of the top three graphite anode suppliers for energy storage batteries in China. The broader industry trends provide a strong tailwind, with robust EV sales growth, faster-than-expected expansion in global energy storage, and emerging applications like humanoid robots and low-altitude aerial vehicles fueling demand. Notably, a key customer, CATL , has reportedly raised its 2026 procurement guidance to 1,100 GWh, a substantial 46% increase from previous forecasts, underscoring the escalating demand for battery components.

Technological Edge: Fueling Performance with Advanced Anode Materials

At the core of EPOW's investment thesis lies its differentiated technology in battery anode materials. The company's primary focus is on graphite anode materials, a critical component for lithium-ion batteries. EPOW's competitive advantage in this area stems from its fully self-operated graphitization process. This integrated approach enables stringent quality control, continuous process optimization, and a stable supply chain, which are crucial factors in the high-stakes battery manufacturing industry. Moreover, its production plants benefit from inexpensive electricity derived from renewable sources, contributing to both low-cost and low-environmental-impact manufacturing.

Beyond its current graphite offerings, EPOW is actively investing in next-generation battery technologies. A significant initiative is the "Research and Demonstration of Key Engineering Technologies for Long-Life, Low-Cost Sodium-Ion Battery Hard Carbon Anode Materials" project, which secured approximately $960,000 in funding through a special science and technology grant in April 2025. This R&D effort is particularly compelling given the growing interest in sodium-ion batteries for their affordability and excellent performance in low-temperature environments, positioning them as a promising alternative for large-scale energy storage and EVs, especially in colder climates. The company's proprietary hard carbon anode for sodium-ion batteries has demonstrated an initial Coulombic efficiency of at least 90% and a capacity retention rate of 85% or more after 1,000 charge-discharge cycles. These performance metrics are critical for overcoming technological barriers to industrial scalability and represent a significant step towards commercial viability.

For investors, these technological differentiators translate into a stronger competitive moat for EPOW. The ability to control the entire graphitization process, coupled with cost advantages from renewable energy, can lead to higher average selling prices (ASPs) or better margins compared to competitors reliant on external processing. Furthermore, the advanced performance of its sodium-ion anode materials positions EPOW at the forefront of emerging battery chemistries, potentially unlocking new market opportunities and long-term growth avenues in a rapidly evolving industry.

Operational Momentum and Capacity Expansion

EPOW's strategic vision is being rapidly translated into tangible operational achievements and significant capacity expansion. The company recently broke ground on a new 20,000-ton high-end graphite anode material production line, representing a planned investment of approximately USD 64 million. This facility, designed for an annual production capacity of 20,000 tons, will incorporate key processes including pre-carbonization, high-temperature carbonization, and automated finished product lines. This expansion is critical for alleviating existing capacity constraints and is projected to contribute approximately USD 110 million in annual revenue and USD 16 million in annual profit upon reaching full production, expected to commence later in 2025.

The company's existing Phase I Guizhou production base, designed for 50,000 tons per year, is anticipated to operate at or near full capacity in 2025. Based on current orders and market demand, EPOW expects its graphite anode shipments to reach 40,000–50,000 tons in 2025, a substantial increase from 28,200 tons in 2024. Looking further ahead, the planned 210,000-ton graphite anode project in Fuyang, Anhui Province, has completed key preparatory steps, laying the groundwork for future large-scale capacity expansion.

In a strategic move to capture demand in a crucial market, EPOW announced in September 2025 its plan to build a 1GW lithium battery pack project in the United States through its newly established U.S. subsidiary, Alchemistica Incorporated. This initiative aims to address the rapidly expanding market for energy storage batteries in North America, including residential and commercial & industrial applications, and is designed to create synergies between downstream battery applications and its upstream anode material business, thereby driving sales of graphite anode materials.

Financial Performance: From Losses to Profitability

Sunrise New Energy has demonstrated remarkable revenue growth in recent years, reflecting the increasing demand for its core products. Total revenue surged from $7.41 million in 2021 to $38.13 million in 2022, marking an impressive 414.57% year-over-year increase. This growth continued with revenues of $45.05 million in 2023 (an 18.16% increase) and further to $65.00 million in 2024, representing a 44.28% year-over-year growth. This "explosive growth" underscores the market's reception to EPOW's strategic pivot and technological advancements. Despite this revenue expansion, the company historically reported net losses from continuing operations, including -$8.40 million in 2021, -$22.64 million in 2022, -$24.23 million in 2023, and -$11.78 million in 2024. However, recent operational improvements have marked a significant turning point. EPOW achieved a combined net profit of over USD 0.57 million in July and August 2025, with sales revenue of approximately USD 5.2 million in July and USD 4.7 million in August. This return to profitability is attributed to optimized cost control and enhanced production efficiency, particularly through an increase in in-house graphitization processing.

From a liquidity perspective, the company recently completed a registered direct offering on September 23, 2025, issuing 1.00 million Class A ordinary shares at $0.55 per share, generating approximately $550,000 in gross proceeds for working capital and general corporate purposes. While this capital raise provides immediate liquidity, the company's TTM financial ratios as of September 27, 2025, indicate a current ratio of 0.73 and a quick ratio of 0.39, suggesting potential short-term liquidity management considerations.

The negative book value per share of -0.38 and a Debt/Equity ratio of -4.92 also highlight the need for sustained profitability and capital management as the company executes its ambitious expansion plans.

Competitive Landscape: Battling for Market Share

Sunrise New Energy operates in a highly competitive global market for battery anode materials, vying for market share against both established giants and nimble innovators. While EPOW has carved out a niche as a top eleven global supplier and a top three supplier in China for energy storage graphite anodes, it faces formidable competition.

Comparing EPOW to GrafTech International Ltd. (EAF), a leading producer of graphite and carbon products, EPOW's specialization in EV anode materials offers a more targeted market approach. EAF, with its broader industrial base and established global supply chain, likely benefits from greater economies of scale and a more mature operational infrastructure. EPOW's technological focus on high-performance anode materials aims to differentiate it through product quality and efficiency, whereas EAF often competes on scale and cost leadership in broader graphite markets. Qualitatively, EPOW likely lags EAF in overall production scale and market penetration, which can translate to differences in growth rates and cash flow generation.

Against Albemarle Corporation (ALB), a global leader in specialty chemicals with a significant presence in lithium and other battery materials, EPOW's competitive position is distinct. ALB's extensive portfolio across the battery value chain, coupled with its substantial R&D capabilities and global reach, provides a more comprehensive market positioning. EPOW, specializing in graphite anodes, seeks to offer superior performance in specific battery applications, such as improved durability. However, ALB's diversified revenue streams and larger investment capacity often lead to stronger financial health and more robust R&D pipelines. EPOW's niche innovation is a strength, but it generally lags ALB in operational efficiency, market share, and overall growth trajectory.

Indirectly, EPOW also contends with companies like MYR Group Inc. (MYRG), an electrical construction services company. While MYRG focuses on energy infrastructure, its projects in grid modernization and data centers support the broader energy transition, potentially influencing the demand and infrastructure for EV charging and energy storage. MYRG's project-driven revenue model and focus on execution speed contrast with EPOW's materials manufacturing, making direct financial comparisons challenging. However, trends favoring infrastructure development could benefit MYRG more directly, potentially impacting the broader market dynamics that EPOW relies upon.

EPOW's competitive advantages, or "moats," include its proprietary graphite technology, which enables strict quality control and process optimization, potentially leading to higher efficiency in battery performance and stronger customer loyalty. Its focused EV strategy also allows for targeted innovation and differentiation. However, key vulnerabilities include its relatively smaller scale compared to industry giants, which can impact cost advantages, and potential supply chain dependencies. High R&D requirements and significant regulatory hurdles also act as barriers to entry in the battery materials industry, favoring established players with substantial resources.

Outlook and Risks: Charting a Course for Growth

The outlook for Sunrise New Energy is characterized by ambitious growth targets and significant industry tailwinds, yet it is tempered by inherent execution risks and competitive pressures. The company anticipates a substantial increase in graphite anode shipments, projecting 40,000–50,000 tons in 2025, a notable jump from 28,200 tons in 2024. This growth is expected to be supported by its Phase I Guizhou production base operating at or near full capacity. The new 20,000-ton production line is a critical component of this growth strategy, with management projecting an additional USD 110 million in annual revenue and USD 16 million in annual profit upon full production.

These projections are buoyed by strong market drivers, including accelerating EV sales, rapid expansion in global energy storage, and supportive government policies such as China's "Special Action Plan for Large-Scale Construction of New Energy Storage (2025–2027)," which aims to double China's energy storage installed capacity by 2027. The increased procurement guidance from key customers like CATL (300750.SZ) further validates the robust demand environment.

However, investors must consider several pertinent risks. The successful execution of large-scale projects, particularly the 1GW U.S. lithium battery pack project through its new subsidiary, presents significant management and operational challenges in a foreign market. The company's reliance on rapidly expanding market demand for energy storage batteries is also contingent on external factors that may not be entirely within its control. While recent months have shown a return to profitability, the variability in performance, as evidenced by a lower net profit in August compared to July 2025, suggests that sustained financial stability is still a key area to monitor. Furthermore, the forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances that could cause actual results to differ materially from expectations. The capital-intensive nature of capacity expansion also implies ongoing funding requirements and potential dilution risks.

Conclusion

Sunrise New Energy Co., Ltd. stands at a pivotal juncture, transforming from a diversified entity into a specialized force in the burgeoning battery anode materials market. The company's strategic pivot, marked by aggressive capacity expansion, a clear technological differentiation in both graphite and emerging sodium-ion anode materials, and a strategic entry into the U.S. market, underpins a compelling investment narrative. While historical financial performance has been characterized by losses, the recent return to profitability in mid-2025, driven by operational efficiencies, signals a potential inflection point.

The anticipated contributions from new production lines and the strong tailwinds from the global energy transition position EPOW for significant revenue and profit growth. However, the path forward is not without challenges, including intense competition from larger, more financially robust players and the inherent execution risks associated with rapid expansion and new market entries. For investors, EPOW represents a high-growth opportunity in a critical sector, contingent on the company's ability to consistently execute its strategic initiatives, leverage its technological advantages to maintain a competitive edge, and translate its operational momentum into sustained profitability amidst a dynamic competitive landscape. Close monitoring of its capacity ramp-up, financial discipline, and market penetration will be crucial in assessing its long-term investment viability.