Weekly Sector Review: New Energy & Power Equipment

Date: February 2026 (Based on Report Context)
Analysts: Yao Yao, Zhang Jiawen, Fan Xiaopeng, Peng Zhiqiang, Lu Wenjie
Source: Guojin Securities Research Institute

Title: Convergence of Catalysts in Green Methanol and Space PV; AIDC Poised for GTC Drive

Executive Summary

As the "Two Sessions" approach, policy support for carbon neutrality is expected to intensify, with Green Hydrogen-Ammonia-Methanol emerging as a critical carrier for non-electric decarbonization. Concurrently, geopolitical tensions in Iran are driving up traditional methanol prices, accelerating the economic inflection point for green alcohol substitution. We reiterate our strong recommendation for green alcohol producers, electrolyzer equipment manufacturers, and fuel cell component suppliers, citing a resonance of internal policy support and external supply-side shocks.

In the photovoltaic (PV) sector, Space-Based Solar Power (SBSP) is gaining momentum following strategic collaborations between Microsoft and Starlink, alongside anticipated SpaceX launches. We view "Space Computing" as a pivotal vector for future AI算力 (computing power) growth, shifting investment focus towards space/ground auxiliary materials and core equipment. Additionally, Tongwei’s proposed acquisition of Qinghai Lihao signals a viable path for capacity consolidation beyond state-led storage schemes, potentially optimizing industry competition dynamics.

The Wind Power sector continues to demonstrate robust pricing power, with February turbine bid averages remaining elevated. The recent publication of the UK-China Clean Energy Partnership Memorandum provides a significant catalyst for the offshore wind export chain. Meanwhile, the Lithium-ion battery supply chain is witnessing a rebound in March production schedules, while Zimbabwe’s suspension of lithium concentrate exports tightens upstream supply expectations. In AIDC (AI Data Center) infrastructure, the upcoming NVIDIA GTC 2026 conference serves as a key catalyst for liquid cooling and advanced power supply technologies (HVDC/SST), driven by surging global capex and chip performance demands.

We maintain an overweight stance on:
1. Green Hydrogen/Methanol: Policy-driven demand and supply shocks.
2. Space PV & Auxiliaries: Technological breakthroughs and tech giant endorsements.
3. Wind Turbines & Offshore Export Chain: Profit elasticity and geopolitical easing.
4. AIDC Power & Liquid Cooling: Structural growth from AI infrastructure build-out.
5. Grid Equipment: Transformers and smart grid solutions amid supply shortages.
6. Lithium Materials: Beneficiaries of production ramp-ups and resource constraints.

Key Takeaways

1. Hydrogen & Fuel Cells: Policy Upgrade and Supply Shock Drive Green Alcohol Economics

1.1 Policy Tailwinds: "Two Sessions" and Carbon Neutrality Focus

With the National People's Congress ("Two Sessions") imminent, "Dual Carbon" goals remain a top-tier agenda item. The recent inclusion of "Green Low-Carbon Development" as a standalone chapter in the Ecological Environment Code establishes a legal framework for carbon accounting and trading, paving the way for green fuels like hydrogen, ammonia, and methanol to enter carbon markets. The National Energy Administration has reiterated targets for non-electric renewable utilization, specifically highlighting the scale-up of renewable-based hydrogen, ammonia, and methanol.

• Strategic Shift: The 15th Five-Year Plan is expected to shift energy development focus towards non-electric decarbonization, where hydrogen-ammonia-methanol serves as a crucial energy carrier.
• Regional Incentives: Yunnan Province has introduced new policies for green electricity consumption, offering subsidies of up to RMB 13/kg for integrated green hydrogen-ammonia-methanol projects. Inner Mongolia is launching industrial green hydrogen substitution actions, expanding application scenarios.

1.2 Geopolitical Catalyst: Iran Tensions Boost Methanol Prices

Iran, the world’s second-largest methanol producer (accounting for ~10% of global capacity) and China’s largest import source (55% of China’s imports in 2025), faces escalating geopolitical tensions.
* Supply Disruption: Conflict risks and natural gas restrictions have reduced Iranian plant operating rates to below 20%.
* Price Impact: A potential blockade of the Strait of Hormuz or continued instability could significantly curtail exports to China, driving a supply-driven price surge in domestic methanol markets.
* Green Alcohol Competitiveness: Rising prices for fossil-based methanol narrow the cost gap with green methanol, enhancing the latter’s economic viability in shipping and chemical sectors. This accelerates the substitution timeline, creating a high-elasticity window for green alcohol producers.

1.3 Investment Implications & Sub-Sector Opportunities

Analyst View: The convergence of policy support (carbon trading inclusion) and supply shocks (Iran) creates a unique entry point for the hydrogen sector. We prioritize companies with established project pipelines and those benefiting from the immediate equipment capex cycle.

2. Photovoltaics & Storage: Space PV Momentum and Industry Consolidation

2.1 Space-Based Solar Power (SBSP): The Next Frontier

The SBSP sector experienced volatility early in the week but rallied strongly on Friday, driven by significant developments in "Space Computing."
* Tech Giant Validation: Microsoft’s global connectivity agreement with SpaceX’s Starlink and Amazon’s plan to deploy AWS Outposts edge computing hardware on Starcloud satellites signal that space-based data centers are becoming a critical infrastructure for exponential AI compute growth.
* Launch Catalysts: Anticipated launch of SpaceX’s third-generation Starship in March (with recovery attempts) and dense domestic rocket launch schedules provide near-term event drivers.
* Investment Strategy: While space-based compute faces technical and cost hurdles, the strategic direction is clear. We recommend tilting allocations towards auxiliary materials (both space-grade and ground-based equivalents) and core equipment manufacturers capable of serving this high-specification niche.

Key SBSP Related Targets:
* Equipment: Maxwell (Maiwei), Autowell, Jingsheng Electromechanical, Liancheng Numerical Control, Shuangliang, Gaoce, Jiecai, Laplace, Yujing.
* Auxiliaries: Astronergy (Junda), Yongzhen, Zerun, Foster, Sublime, Polymer, DKE, Suzhou Good-Ark, Lens Technology, Flat Glass, Xinyi Solar, Yubang, Xinbo, Woge, Ruihuatai, Lushan, Kaisheng.
* Modules/Cells: Astronergy, Risen Energy, Shanghai Gangwan, Mingyang Smart Energy, Jinko, JA Solar, Trina, Canadian Solar, Longi, Hengdian DMEGC, Boway Alloy.
* Power Systems: Mingyang Smart Energy, CETC Blue Sky, Shanghai Gangwan.

2.2 Industry Consolidation: Tongwei Acquires Qinghai Lihao

Tongwei Co., Ltd. announced plans to acquire 100% equity of Qinghai Lihao Clean Energy via share issuance and cash, along with raising matching funds. Trading was suspended from Feb 25 for up to 10 days.

• Target Profile: Qinghai Lihao is the leading unlisted polysilicon producer, with >150,000 tons of capacity in Qinghai (commissioned 2022-2024). It boasts industry-leading costs and is controlled by Duan Yong, a former core executive of Tongwei’s polysilicon business.
• Strategic Rationale for Tongwei:
  • Market Share Consolidation: Enhances Tongwei’s dominance in polysilicon, strengthening its pricing power and market influence.
  • Financial Efficiency: The share-swap structure minimizes cash outflow, potentially improving balance sheet health compared to debt-financed expansion.
  • Operational Synergy: Given the shared management history ("known entity"), integration risks are lower than previous attempted acquisitions (e.g., Runyang).
• Industry Signal: This move demonstrates that M&A among leading players is a viable alternative to state-led "capacity storage" for resolving overcapacity. It aligns with the "anti-involution" policy direction, promoting industry concentration and efficiency. Successful completion would set a precedent for further consolidation across the PV value chain, accelerating sector recovery.

2.3 Price Trends & Market Status (as of Feb 25, 2026)

• Polysilicon: Prices have stabilized above the cash cost of leading enterprises. Leading firms are beginning to consolidate capacity.
• Wafers: Current quotes cover full costs for leaders. Demand may see a pre-export-tax-refund boost in April, providing temporary price support.
• Cells: Profitability remains under pressure; manufacturers are cautious about March production hikes due to unclear demand.
• Modules: Overall profitability is strained, except in high-margin overseas markets. Buyers remain观望 (wait-and-see) amidst price hike rumors.
• Auxiliaries: Glass prices stable; inventory days increasing slightly. EVA film prices stable; petrochemical plants entering inventory accumulation phase.

3. Wind Power: Robust Pricing and Export Catalysts

3.1 Domestic Market: High Bid Prices Sustained

February data confirms the resilience of turbine pricing, supporting margin expansion for OEMs.
* Bidding Volume: Central/State-owned enterprise bids totaled 3.5 GW in Feb (-11% YoY). Jan-Feb cumulative bids reached 9.8 GW (-28% YoY).
* Pricing Power: The weighted average bid price for Jan-Feb stood at RMB 1,712/kW, a 13% QoQ increase and 9% increase vs. full-year 2025 averages.
* Segment Analysis:
* 5.X MW: Avg price RMB 2,013/kW (+10% QoQ).
* 8.X MW: Avg price RMB 1,708/kW (+20% YoY).
* ≥10 MW: Avg price RMB 1,265/kW (-4% QoQ, but still robust).

Outlook: With a 1.5-2 year delivery lag, high prices secured in H2 2025 and early 2026 will translate into significant profit elasticity for OEMs in 2027. We expect prices to remain elevated throughout 2026.

3.2 International Catalyst: UK-China Clean Energy Partnership

On Feb 27, the UK government published the full text of the UK-China Clean Energy Partnership Memorandum of Understanding (MoU), originally signed in Beijing in March 2025.
* Content: The MoU commits both nations to deepen cooperation in offshore wind, grid infrastructure, green manufacturing, and clean energy services.
* Significance: This marks a formal restart of energy cooperation after years of stagnation due to security concerns. It serves as a diplomatic foundation for future investments and approvals.
* Beneficiaries: Chinese offshore wind companies with UK ambitions, particularly Mingyang Smart Energy (planning local UK manufacturing), may face fewer regulatory hurdles. This is a positive signal for the entire offshore wind export chain.

3.3 Investment Recommendations

We recommend three main lines of investment in Wind Power:
1. OEMs (Profit Elasticity): Benefiting from high prices and optimized competition.
* Top Picks: Goldwind, Windey, Mingyang Smart Energy, Sany Heavy Energy.
* Watch: Dongfang Electric.
2. Offshore Export Chain (Cables & Foundations): Driven by deep-sea projects and overseas expansion.
* Top Picks: Dajin Heavy Industry, Orient Cable, Haili Wind Power.
* Watch: Zhongtian Technology, Taisheng Wind Power, Qifan Cable, Tianshun Wind Energy.
3. Components (Structural Opportunities): Technical upgrades and rising overseas market share.
* Top Picks: Jinlei Shares, Riyue Shares, Times New Material.
* Watch: Xinqianglian, Delijia.

4. Lithium-Ion Batteries: Production Rebound and Supply Constraints

4.1 March Production Schedule: Significant Rebound

Pre-production schedules for March indicate a broad-based recovery in the lithium supply chain, signaling improved utilization rates.

• Interpretation: The double-digit growth across all major segments suggests that the destocking phase is largely complete, and downstream demand (EVs and Energy Storage) is picking up pace for Q2.

4.2 Upstream Shock: Zimbabwe Halts Lithium Concentrate Exports

On Feb 25, the Zimbabwean government immediately suspended all raw material and lithium concentrate exports.
* New Rules: Only entities with valid mining rights and approved processing plants can export. Third-party traders are banned. Existing local salt/sulfate producers can apply for permits.
* Impact: Zimbabwe supplied 14-18% of China’s overseas lithium concentrate imports (2nd largest source after Australia). 2025 exports were 1.128 million tons (+11% YoY).
* Market Reaction: This ban, effective a year earlier than the previously scheduled 2027 deadline, tightens supply expectations. Combined with rising futures prices, spot lithium carbonate prices surged.
* Battery Grade Li2CO3: Avg price RMB 175,000/ton (+20.69% WoW).
* Industrial Grade Li2CO3: Avg price RMB 172,000/ton (+21.13% WoW).
* Outlook: Short-term supply gaps cannot be filled by new local processing capacity. Prices are likely to remain supported or rise further, benefiting upstream resource holders and integrated cathode producers.

4.3 Corporate Updates

• BYD & US Market: Reports suggest Ford is negotiating with the Trump administration to allow BYD entry via a joint venture model (US majority control). If successful, this would bypass trade barriers and allow BYD to manufacture in the US, significantly boosting its global brand and market access.
• Yongtai Technology: Terminated the planned acquisition of CATL’s 25% stake in Shaowu Yongtai High-Tech. The termination was due to inability to agree on transaction terms. No material impact on operations or the partnership with CATL is expected.

4.4 Material Price Trends (Feb 13-26, 2026)

• Cobalt Sulfate: Stable at ~RMB 97,000/ton. Supply tight due to holiday slowdowns; demand recovering slowly.
• Ternary Precursors (NCM): Prices rose ~5% following lithium salt increases, but transaction volume remains low due to weak downstream procurement sentiment. Inventory levels are low.
• LFP (Lithium Iron Phosphate): Prices rose sharply (+14% for power type) due to cost push from lithium carbonate. However, downstream acceptance is cautious. Energy storage demand remains robust, supporting volumes.
• Anode: Prices stable. Artificial graphite dominates (92% of output). Cost pressure from needle coke persists. Policy support for EV trade-ins (up to RMB 20,000 subsidy) should sustain medium-term demand.
• Graphitization: Prices stable (RMB 8,400-12,500/ton depending on furnace type). Capacity oversupply remains, but integrated players still require external processing.
• LiPF6 (Electrolyte Salt): Stable at RMB 127,000/ton. Production cut during holidays helped reduce high inventory levels.
• Separators: Prices stable. Structural imbalance persists: 5μm wet-process separators are in short supply (driven by exports and energy storage), while thicker specs (7/9μm) face weaker demand.

5. AIDC (AI Data Center): Liquid Cooling and Power Supply Innovation

5.1 NVIDIA GTC 2026 Catalyst

The upcoming GTC 2026 conference is a pivotal event for the AIDC infrastructure sector. Market focus is on:
1. Next-Gen Chips: Rubin and Feynman architectures, including LPU processors.
2. IT Components: CPO (Co-Packaged Optics), PCB materials.
3. Infrastructure: Advanced cooling and power delivery systems.

5.2 Liquid Cooling: Imperative for High-Density Compute

NVIDIA’s Q4 FY26 results (Revenue $68.1B, +73% YoY; Net Income RMB 43B, +94% YoY) underscore the relentless growth in AI capex.
* Thermal Challenge: As chip power density increases (Blackwell -> Rubin -> Feynman), air cooling becomes insufficient. Liquid cooling is no longer optional but mandatory for maintaining performance and TCO.
* Technological Iteration: Beyond cold plate optimization, coolant materials and immersion technologies are gaining attention. Akash Systems’ deployment of diamond-cooling GPU servers in India demonstrates the potential for 15% performance gains in high-temp environments.
* Market Opportunity: Domestic Chinese firms with full-chain liquid cooling capabilities (components to integration) are securing orders from overseas ASIC and cloud providers.
* Investment Logic:
* High Growth Slope: 2026 will see steep growth in liquid cooling market size and value per rack.
* Global Share Gain: Chinese manufacturers are competitive in cost and speed, poised to capture significant global market share.

Recommended Liquid Cooling Targets:
* Component Suppliers (Entering Global Chains): Shenling Environment, Kechuang Xinyuan.
* Watch: Envicool, Gaolan, Tongfei, Chuanrun, Yidong Electronics, Hongfuhan, Lens Tech, Siquan, Feilong.
* New Materials/Tech: Boway Alloy, Sifangda, Worldia, Far East Smarter Energy.
* Equipment: Tsugami China, Genesis, Ningbo Jingda.

5.3 Power Supply: Vertical Delivery and HVDC/SST

• Vertical Power Delivery (VPD): As Rubin chips grow larger, traditional lateral power distribution causes resistance and heat issues. VPD moves power modules to the back or inside the PCB/GPU package, requiring embedded inductors/capacitors. This significantly increases PCB value and technical barriers.
• Future Trend (Feynman): Integration of power modules directly into the GPU die (IVR - Integrated Voltage Regulator).
• HVDC/SST: High-Voltage Direct Current and Solid-State Transformers are critical for efficient power distribution in mega-data centers.

Recommended Power Supply Targets:
* Vertical Power/PCB Upgrade: Zhongfu Circuit, Will High-Tech, Sinexcel, Platinum Alloy.
* HVDC/SST: Megmeet, Evertop, Kstar.

6. Grid & Industrial Control: Policy Support and Export Strength

6.1 Grid: State Grid’s Ten Measures for New Energy

On Feb 28, State Grid Corporation of China (SGCC) released ten measures to support high-quality new energy development:
1. Ensure connection and consumption of ≥200 GW/year of new energy during the 15th Five-Year Plan.
2. Accelerate 15 planned UHV DC lines; increase cross-province transmission capacity by 35%.
3. Build county-level active distribution networks and village microgrids.
4. Expand distributed power access space (≥60 GW/year).
5. Enhance digitalization and intelligence.

Investment Lines:
* Main Grid (UHV/Transmission): Sieyuan Electric, Pinggao Electric, Xuji Electric, China XD Electric.
* Distribution Network: Dongfang Electronics, Sanxing Medical, Hexing Electrical.
* Smart Grid/Digitalization: Guoneng Rixin, State Grid Information & Telecommunication, NARI Technology.

6.2 Transformer Sector: Global Supply Shortage

• North America Crisis: 80% import dependency, labor/material shortages, and delayed capacity expansion (until 2027-28) have pushed lead times to >100 weeks. A 30% supply gap is expected in 2025, persisting until 2030.
• Opportunity: Chinese exporters with channel advantages and fast delivery capabilities can command high premiums.
• Solid-State Transformers (SST): Emerging technology for high-density AIDC loads (600kW-1MW/rack). SST offers precise control and space savings. 2026 is expected to be a year of prototype validation, with commercialization in 2027.
  • SST Watch: Jinpan Technology, Eaglerise, Sifang Shares, China XD, TBEA, Xinte Electric.

6.3 Corporate Earnings Highlights (2025 Q4/FY)

• Jinpan Technology: FY2025 Revenue RMB 7.3B (+5.8%); Net Profit RMB 660M (+14.9%). Q4 Net Profit +2% YoY. Driver: Strong growth in AIDC/IDC sales. Launched "Yuanshen ONE" SST series (98% efficiency, 60% smaller footprint).
• Huaming Equipment: FY2025 Revenue RMB 2.43B (+4.5%); Net Profit RMB 710M (+15.5%). Q4 Net Profit +7% YoY. Driver: Power equipment exports +47.4% YoY (Europe, Brazil, NA). Gross margin improved to 59.6%.
• Veichi Electric: FY2025 Revenue RMB 1.95B (+18.7%); Net Profit RMB 270M (+9.5%). Q4 Net Profit +26% YoY. Driver: Core LV inverter shipments +14% (outperforming industry). Joint venture with Zhejiang Rongtai in Thailand for robotics mechatronics.

6.4 Industrial Control: Robotics and Automation Recovery

• Macro View: 2026 automation market recovery driven by "AI+" manufacturing, humanoid robot mass production prep, and solid-state battery pilot lines.
• Humanoid Robots: Domestic工控 (industrial control) firms are positioning in motors, drives, and encoders.
• Recommendations: Veichi Electric, Inovance, Xinje, Broad-Ocean Motor, Leadshine. Watch: Hongfa, Wolong Electric.

Risks / Headwinds

1. Policy Execution Risk: While "Dual Carbon" is a national strategy, specific implementation details, subsidy disbursements, and carbon market rules may vary or delay, impacting project ROI for hydrogen and renewable sectors.
2. Geopolitical Volatility:
   • Trade Barriers: Potential tariffs or restrictions on Chinese EVs, batteries, and wind turbines in the US and EU could hinder export growth.
   • Conflict Escalation: While Iran tensions boost methanol prices, prolonged conflict could disrupt global energy logistics broadly, affecting input costs.
3. Overcapacity and Price Wars: Despite consolidation efforts, the PV and Lithium sectors still face structural overcapacity. Aggressive price competition could erode margins faster than anticipated, particularly in cells, modules, and mid-stream materials.
4. Technological Uncertainty:
   • Space PV: High technical hurdles and launch failures could delay commercial viability.
   • Liquid Cooling/SST: Adoption rates depend on standardization and cost reductions; slower-than-expected iteration could dampen equipment demand.
5. Raw Material Price Fluctuation: Sharp increases in lithium, cobalt, or nickel prices could squeeze battery maker margins if cost pass-through to OEMs is limited. Conversely, rapid price drops could lead to inventory write-downs.

Rating / Sector Outlook

Investment View

Strategic Allocation Framework

We advocate a barbell strategy combining high-growth thematic opportunities (Space PV, Green Hydrogen, AIDC) with cyclical recovery plays (Wind, Grid, Lithium).

1. Thematic Growth: The "New Infrastructure" of Energy and Compute

• Green Methanol & Hydrogen: This sector is transitioning from concept to commercial reality, driven by mandatory shipping decarbonization and favorable policy economics. The Iran supply shock provides a timely catalyst for price parity.
  • Action: Accumulate positions in Green Alcohol Producers (Goldwind, Jilin Electric) and Electrolyzer Leaders (Huadian, Huaguang).
• Space PV & Auxiliaries: As AI compute moves to space, the supply chain for space-grade solar and materials will see incremental demand.
  • Action: Focus on Auxiliary Material suppliers with dual-use capabilities (space/ground) and Equipment makers with high-tech barriers (Maxwell, Autowell).
• AIDC Infrastructure: The physical backbone of AI. Liquid cooling and advanced power supplies are non-discretionary spend for hyperscalers.
  • Action: Buy Liquid Cooling integrators (Shenling, Kechuang) and Power Supply innovators (Zhongfu, Megmeet) ahead of GTC 2026.

2. Cyclical Recovery: Profit Elasticity and Export Alpha

• Wind Power: The sector has bottomed out in terms of pricing. High bid averages guarantee margin improvement for OEMs in 2026-2027. The UK-China MoU opens a new export chapter.
  • Action: Overweight OEMs (Goldwind, Mingyang) and Offshore Export Chain (Dajin, Orient Cable).
• Grid Equipment: A global super-cycle in transformers, exacerbated by AI data center demand and renewable integration. Chinese firms are best positioned to fill the supply gap.
  • Action: Buy Transformer Exporters (Huaming, Sieyuan) and UHV Leaders (Pinggao, Xuji).
• Lithium Ion: March production data confirms a cyclical uptick. Zimbabwe’s export ban adds a supply-side floor to lithium prices.
  • Action: Selective exposure to Integrated Cathode Producers and Battery Leaders (CATL, EVE Energy) that can manage cost volatility and benefit from volume growth.

3. Consolidation Play: PV Industry Restructuring

• Tongwei’s Acquisition: Monitor the progress of the Tongwei-Lihao deal. Success here validates the M&A route for clearing excess capacity.
  • Action: Hold Leading PV Integrated Players (Tongwei, Longi, Jinko) as beneficiaries of improved industry discipline. Avoid smaller, high-cost producers lacking consolidation partners.

Portfolio Recommendations

Conclusion

The current market environment offers a confluence of policy support, technological breakthroughs, and supply-side adjustments. Investors should pivot towards sectors with visible catalysts (GTC, Two Sessions, SpaceX launches) and tangible earnings improvements (Wind, Grid). The "Green Alcohol" theme presents a unique asymmetric opportunity due to the unexpected geopolitical supply shock, while AIDC infrastructure remains a secular growth story backed by undeniable capex trends. We maintain a constructive outlook on the New Energy and Power Equipment sector, emphasizing quality leaders and innovative enablers.

Disclaimer: This report is based on information available as of February 2026. Market conditions are subject to change. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions. Guojin Securities does not guarantee the accuracy or completeness of the information provided.