EVE Energy unexpectedly redeems 5 billion yuan convertible bonds early, leading to a "double decline" in stocks and bonds. Ignoring investors' interests, the prospects for its Hong Kong IPO may change.

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Produced by: Sina Finance Listed Company Research Institute

Author: Hao

On March 30, 2025, EVE Energy (rights protection) released an announcement, stating it would redeem the “EVE Convertible Bonds” early. The next day, EVE Energy’s underlying stock fell by nearly 10%, and the convertible bonds even hit a 20% “limit-down on one price” board.

In March 2025, EVE Energy issued convertible bond financing of RMB 5 billion, with an interest rate of only 0.2% in the first year. On March 30 this year—right on the day it just met the clause requiring the closing price to be no lower than 130% of the conversion price for nearly 15 trading days—EVE Energy quickly reviewed and approved the early redemption proposal.

In other words, EVE Energy used the RMB 5 billion of funds for one year at almost zero cost, and then used mandatory redemption to reclaim investors’ potential conversion equity. In fact, the company’s finance expense ratio is only around 1%, similar to comparable companies. EVE Energy’s approach—disregarding the interests of small and medium investors in order to grab a “small advantage” in effect—has made the market extremely surprised. Investors have voted with their feet, resulting in the company suffering a “double blow” to both equity and bonds.

In 2025, EVE Energy only barely managed to keep net profit year-on-year flat by reducing the R&D expenditure capitalization-to-expensing ratio. While its profitability declined, its cash received ratio remained at a low level, and its operating conditions did not improve.

It is worth noting that the company’s actual controller that year cashed out nearly RMB 3 billion through equity transfer, in effect reducing its holdings in the rights issue it had participated in at a low level. A series of moves gradually caused the market to lose trust, and the ongoing Hong Kong stock IPO would undoubtedly also be negatively affected as a result.

Unexpected Early Redemption of Convertible Bonds Using a 0.2% Rate to Tie Up RMB 5 Billion for One Year

On the evening of March 30, EVE Energy released an announcement stating it would redeem the “EVE Convertible Bonds” early. The redemption price was RMB 100.034 per lot, the redemption registration date was April 23, 2026, and the redemption date was April 24.

On March 31, EVE Energy’s underlying stock fell 9.93%, and the convertible bonds saw a 20% “limit-down on one price” board. The market “voted with its feet,” expressing strong dissatisfaction with EVE Energy’s move.

On March 24, 2025, the EVE Convertible Bonds with a scale of RMB 5 billion were officially issued. The original conversion period was from September 29, 2025 to March 24, 2031, for a term of 6 years. The annual interest rates were 0.2%, 0.4%, 0.6%, 1.5%, 1.8%, and 2.0%, respectively. However, after only one year and six days, EVE Energy was already in a hurry to initiate forced redemption, clearly to avoid paying the interest rates that increase year by year. That is, EVE Energy tied up RMB 5 billion for one year at an interest cost of only 0.2%.

It should be pointed out that EVE Energy’s finance expense ratio has long been around 1%, lower than comparable companies such as Gotion High-Tech and Sungrow, and only higher than leading CATL. The cost of paying interest is therefore not high.

Not only that—between February 25 and March 30, 2026, within 30 consecutive trading days, EVE Energy’s stock price had 15 trading days where the closing price was no lower than 130% of the conversion price (RMB 50.28 per share), i.e., RMB 65.37. This precisely triggered the “conditional redemption clause.” On March 30, the company’s board of directors made a decision “by the deadline.” For the convertible bonds that had not been converted after the close on the registration date of April 23, they would be forcibly redeemed in full at a price of RMB 100.034 per lot. This was far below the market price of around RMB 167 at the time, further highlighting the “impatience” mindset of the company’s management.

Convertible bonds are typically viewed as a financing tool that has a “floor at the bottom and no cap at the top.” But with forced redemption after only one year, it is extremely rare in the A-share market. Some market participants said directly: “The convertible bonds listed for about a year, and there is still a long time until maturity. Most investors thought the company would not start forced redemption so quickly, but the result was they were caught off guard.”

EVE Energy’s approach—disregarding the interests of small and medium investors in order to grab a “small advantage”—made the market extremely surprised. Investors kept voting with their feet, leading to the company suffering a “double blow” to both equity and bonds.

Lowering the R&D Expense-Expensing Ratio; Net Profit Only Barely Flat. The Actual Controller Cashed Out RMB 3 Billion Then Went to Finance Again in Hong Kong

In 2025, EVE Energy’s power battery shipment volume was 50.15 GWh, up 65.56% year over year. Its shipment volume ranked sixth globally among power batteries. Energy storage battery shipment volume was 71.05 GWh, up 40.84% year over year, placing it among the top two globally.

However, the rise in market share depends entirely on price-cutting under internal competition (“involution”), and has not brought any improvement in the company’s performance or cash flow.

In 2025, EVE Energy’s revenue was RMB 4.13B, up 26.44% year over year, with a growth rate significantly lower than the shipment volumes of lithium batteries for power and energy storage. Attributable net profit was RMB 58M, up 1.44% year over year, only increasing by RMB 0.058 billion.

It is worth noting that EVE Energy’s full-year R&D expenditure was RMB 3.44B. Of this, about RMB 400 million of spending was not included in R&D expenses for that year, which is lower than the expense recognition ratio of nearly 100% in previous years. Only by relying on accounting methods was it able to barely keep full-year net profit essentially flat.

In fact, compared with comparable companies, EVE Energy’s net profit growth rate has long been on the low side, and especially since 2024 it has been particularly obvious.

In 2025, EVE Energy’s gross margin was 16.17%, down 1.24 percentage points year over year. Its net profit margin was 6.73%, down 1.65 percentage points year over year. While profitability declined, its cash received ratio also remained at a low level below 80%.

Operating conditions did not improve, yet the major shareholder was busy with other matters.

In November 2025, EVE Energy’s actual controller Liu Jincheng and Lu Jinhong transferred 40.7768 million shares through a price inquiry transfer method. The transfer price was RMB 72.20 per share, resulting in a one-time cash-out of RMB 2.94B.

In 2022, EVE Energy raised RMB 9 billion via a targeted issuance to its controlling shareholder EVE Holdings and to its actual controller Liu Jincheng and Lu Jinhong at a price of RMB 63.11 per share. This equity transfer effectively reduced holdings of part of the rights issue that had been participated in at a low level previously.

In 2019 and 2020, EVE Energy also conducted two additional rights issues, raising a total of RMB 5 billion from the market. Currently, the company is planning a Hong Kong stock IPO.

However, a series of recent actions has caused the market to gradually lose trust in the company, and the ongoing Hong Kong stock IPO financing will undoubtedly also be negatively affected as a result.

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Responsible Editor: Company Observation