Power Equipment & New Energy Sector Weekly Report

Rating: BUY (Maintained)
Date: February 2026
Analysts: Yao Yao, Zhang Jiawen
Contact: Fan Xiaopeng, Peng Zhiqiang, Lu Wenjie

Executive Summary

The global energy landscape is undergoing a structural bifurcation driven by the divergent resource endowments and strategic imperatives of major economies. In North America, the acute power shortage exacerbated by the AI data center boom is catalyzing a shift towards unconventional supply solutions. While natural gas remains a transitional backbone, the "Space-Based Solar Power" narrative, championed by Elon Musk’s SpaceX advancements, is emerging as a high-conviction long-term thematic investment. The imminent scalability of satellite manufacturing and launch cost reductions positions space photovoltaics (PV) as a critical frontier, with investment focus shifting towards auxiliary material supply chains as equipment orders materialize.

Conversely, Europe, constrained by fossil fuel scarcity and land limitations, is doubling down on Offshore Wind (OSW) as the optimal pathway to sustain its AI competitiveness. Recent regulatory optimizations in pricing and approval mechanisms, coupled with the deepening integration of Chinese supply chains, signal the onset of a sustainable growth phase for European OSW. Notably, the withdrawal of SeAH from the Hornsea 3 monopile project underscores the fragility of local European manufacturing capacity, further reinforcing the export logic for Chinese foundation suppliers.

Domestically in China, the policy framework for Hydrogen Energy has been elevated to a national strategic priority. The explicit inclusion of "hydrogen and green fuels" in the top-level economic work部署 (deployment) marks a transition from departmental coordination to systemic, cross-sector resource allocation. This elevates the "Green Hydrogen-Ammonia-Methanol" chain as the core carrier for decarbonization in non-electric sectors, opening a golden investment window.

In the Lithium-ion battery sector, the industry is witnessing a dual catalyst: a better-than-expected volume and price recovery in March, and accelerated commercialization milestones for solid-state batteries (SSB). Major players like Gotion High-Tech and BYD are transitioning SSBs from R&D to pilot demonstration, with mass adoption targets set for the 2030 horizon. Meanwhile, the AI Data Center (AIDC) infrastructure theme remains robust, supported by Vertiv’s strong Q4 2025 earnings and the NVIDIA-Meta partnership, highlighting the rising global stature of Chinese liquid cooling enterprises.

We maintain a BUY rating on the Power Equipment and New Energy sector. Our top recommendations span:
1. Space/Musk PV & Auxiliary Materials: Capitalizing on the cost-down trajectory of space launches.
2. European Offshore Wind Exports: Benefiting from supply gaps in European foundations (e.g., Dajin Heavy Industry).
3. Hydrogen & Green Fuels: Leveraging policy tailwinds for green methanol/ammonia producers and electrolyzer OEMs.
4. Solid-State Battery Leaders: Focusing on material and equipment innovators (e.g., Gotion, BYD supply chain).
5. AIDC Liquid Cooling: Riding the wave of global data center infrastructure expansion.

Key Takeaways

1. Macro-Thematic Shift: AI Power Crunch Drives Divergent Global Strategies

The intersection of Artificial Intelligence and energy infrastructure has become the dominant narrative for the power sector. The underlying principle—"the endgame of computing power is electricity"—is reshaping investment thesis across regions.

North America: The Case for Space-Based Solar

• The Problem: The US grid is under unprecedented stress. New York State alone has 10GW of data center load waiting for grid connection, a figure that has tripled in one year. Several states are considering moratoriums on new data center permits due to grid constraints.
• The Solution Spectrum: Traditional solutions include gas turbines and Solid Oxide Fuel Cells (SOFC), leveraging North America’s abundant natural gas reserves. However, these face long lead times (order delivery cycles are extending).
• The Disruptor: Space-Based Solar Power (SBSP). Driven by SpaceX’s Starship program, the cost of launching satellites is transitioning from "per kilogram" to "per ton" economics. With successful rocket recoveries and规模化 (scaled) production of space PV modules, the barrier to entry for orbital energy generation is lowering rapidly.
• Investment Implication: We view SBSP as the "first-principles" ultimate solution. As equipment orders approach realization, investors should pivot towards the auxiliary supply chain (materials, components) for both space and terrestrial high-efficiency PV applications. The recent IPO of CETC Blue Sky (specializing in aerospace-grade power systems) validates the scarcity and strategic value of this niche.

Europe: Offshore Wind as the AI Enabler

• The Constraint: Europe lacks the land area for massive solar farms and the fossil fuel reserves for gas-fired baseload power required to support AI compute growth.
• The Pivot: Offshore Wind is the only viable scalable renewable source. After years of stagnation due to flawed auction mechanisms and permitting bottlenecks, the sector is turning a corner.
• Catalysts:
  • Policy Reform: Improved electricity pricing mechanisms and streamlined approval processes in key markets (UK, Germany, Netherlands).
  • Supply Chain Integration: Chinese manufacturers are increasingly integrated into European projects, offering cost-competitive and reliable components.
• Investment Implication: We expect European OSW to enter a phase of predictable, sustainable growth. The export-oriented supply chain, particularly for foundations and cables, offers superior risk-adjusted returns.

2. Wind Power: Robust Domestic Growth & Export Alpha

Domestic Market: 2025 Installation Surge

According to the Chinese Wind Energy Association (CWEA), China’s newly installed wind capacity in 2025 reached 130.8 GW, a year-over-year (YoY) increase of 50%.
* Onshore Wind: 125.3 GW (+54% YoY). Average turbine size increased to 7.1 MW/unit.
* Offshore Wind: 5.6 GW (-1.1% YoY). Average turbine size reached 10.1 MW/unit.
* Market Dynamics: The top 6 manufacturers held 82.7% market share (down 2.3 pct YoY), indicating some demand spillover to second-tier players during the peak installation period. Windey (Yunda) significantly gained market share, rising from 4th to 2nd place.

Export Market: The Structural Opportunity

• Volume: Total exports (direct + overseas base sales) reached 10.8 GW in 2025, up 27% YoY.
• Order Book: Overseas signed orders for 2024/2025 were 28 GW and 40 GW respectively, suggesting sustained high growth in the 15th Five-Year Plan period.
• The "SeAH Exit" Catalyst: SeAH Wind’s complete withdrawal from the Hornsea 3 monopile supply contract is a pivotal event. Due to manufacturing difficulties and labor strikes at its Teesside plant, SeAH failed to deliver. The contract was redistributed to Dajin Heavy Industry, EEW, Steelwind, and Haizea.
  • Significance: This highlights the execution risk of European local manufacturing and the reliability premium of Chinese suppliers.
  • Supply/Demand Imbalance: European nominal monopile capacity is ~1.5 million tons (~8 GW equivalent), but effective capacity is far lower due to delays. With European OSW installations projected to exceed 15 GW annually post-2031, a significant supply gap will emerge from 2028-2029.
  • Recommendation: Overweight on Dajin Heavy Industry (primary beneficiary), with attention to Tianshun Energy and Haili Wind Power.

3. Hydrogen Energy: Strategic Upgrade to National Priority

The policy landscape for hydrogen has undergone a fundamental upgrade, moving from technical pilot projects to a core pillar of national economic strategy.

Policy Breakthroughs

• Top-Level Design: The article "Key Tasks for Current Economic Work" published in Qiushi journal explicitly lists "cultivating hydrogen and green fuels as new growth points" alongside integrated circuits and aerospace. This signifies hydrogen’s role in driving domestic demand, investment, and employment.
• Implementation Path: The National Energy Administration (NEA) outlined a dual-track approach for the 15th Five-Year Plan:
  1. Stock Replacement: Encouraging refineries to adopt green hydrogen/electricity by 2026, creating immediate demand in the chemical sector.
  2. Future Incubation: Establishing green fuel certification systems and piloting hydrogen applications, laying the groundwork for market-based trading.
• Economic Mechanism: The establishment of a Green Fuel Certification System is critical. It aligns domestic production with international carbon tax rules (e.g., EU CBAM, IMO shipping regulations), enabling premium pricing for green ammonia/methanol.

Investment Themes

1. Green Methanol (Short-Term Alpha):
   • Supply/Demand: Current global green methanol capacity is only hundreds of thousands of tons, while demand from 300 new methanol-fueled ships (coming online in the next 2 years) will require 6.8 million tons. Long-term demand (2030) could exceed 40 million tons with 10% blending mandates.
   • Opportunity: Producers with early-mover advantages and off-take agreements with shipping companies will enjoy high margins.
   • Tickers: Goldwind, Jilin Electric Power, CIMC Enric, China Tianying.
2. Electrolyzers (Mid-Term Volume):
   • With project construction cycles of 1-2 years, a wave of previously approved but stalled projects is expected to break ground in H2 2025 to meet ship delivery timelines.
   • Tickers: Huadian Ke Gong, Huaguang Huan Neng, Shuangliang Eco-Energy.
3. Fuel Cell Vehicles (Policy Support):
   • 2025 is the final year of the current demonstration city cluster policy. Expect continued subsidies and toll exemptions for hydrogen highways.
   • Tickers: SinoHytec, Guofu Hydrogen, Refire, Sinohytec.

4. Lithium Batteries: Solid-State Acceleration & Price Stabilization

The lithium sector is transitioning from a period of intense price competition to one driven by technological differentiation and steady demand recovery.

Solid-State Battery (SSB) Milestones

• Gotion High-Tech & BASF Partnership: Signed an MoU to co-develop next-generation solid-state materials. Gotion has established a 0.2 GWh pilot line for all-solid-state batteries with a >90% yield rate and energy density of 300 Wh/kg.
• BYD’s Roadmap:
  • Technology: Sulfide-based solid-state battery breakthroughs in lifespan and fast-charging.
  • Timeline: Small-batch production and demo vehicle installation by 2027; large-scale mass adoption post-2030.
  • Cost Perspective: BYD CTO Sun Huajun indicates that solid-liquid hybrid batteries may reach price parity with liquid ternary batteries at scale. LFP batteries will remain dominant for mass-market vehicles for the next 15-20 years, with SSBs targeting premium segments.
• Implication: The industry is moving from R&D to demonstration. Investors should monitor material suppliers (solid electrolytes, specialized cathodes) and equipment manufacturers.

Corporate Actions & Supply Chain

• CATL & Yongtai Technology: CATL plans to swap its 25% stake in Yongtai High-New Material for shares in the listed entity Yongtai Technology, becoming a direct shareholder. This strengthens the strategic alignment in fluorine chemicals and battery materials.
• Menguli New Material: Announced a RMB 928 million investment in a 30,000-ton/year cathode material project, focusing on high-voltage cobalt lithium, NCA, and ultra-high-nickel ternary materials.
• CATL Employee Stock Ownership Plan (ESOP): A new ESOP covering ~4,956 core employees with a cap of RMB 743 million. The grant price is RMB 183.64/share. This signals management’s confidence in long-term stability and aligns employee interests with shareholder value.

Nickel Supply Shock

• Indonesia Quota Cut: The Weda Bay nickel mine (owned by Tsingshan, Eramet, and Antam) was notified of a 2026 ore production quota of 12 million tons, a drastic reduction from 42 million tons in 2025.
• Market Impact: London Nickel futures rose ~2.8% to $17,980/ton. This supply contraction supports nickel prices, benefiting upstream miners but potentially pressuring battery costs if not offset by recycling or alternative chemistries.

5. AIDC Power & Liquid Cooling: Global Expansion

The AI infrastructure build-out continues to accelerate, with liquid cooling becoming the standard for high-density compute.

Vertiv Holdings: Strong Financials

• Q4 2025 Results: Net sales of $2.88 billion (+23% YoY); Operating profit of $580 million (+27% YoY).
• Orders: Organic orders surged 252% YoY. Backlog stands at $15 billion (+109% YoY).
• Guidance: 2026 full-year net sales guidance of $13.25–13.75 billion (+27–29% YoY).
• Takeaway: Vertiv’s performance confirms the robustness of global AI capex. The surge in orders indicates that the liquid cooling penetration rate is accelerating faster than anticipated.

NVIDIA & Meta Partnership

• Meta and NVIDIA announced a long-term partnership for AI infrastructure, involving the deployment of millions of Blackwell and Rubin GPUs. This validates the demand for advanced cooling solutions required by next-gen chips.

Investment Logic for Chinese Suppliers

• Market Share Gain: Chinese companies are gaining traction in the global supply chain, offering competitive thermal interface materials (TIM), cold plates, and integrated solutions.
• Catalysts:
  1. Earnings verification of leading firms in Q4 2025/Q1 2026.
  2. Shipment of NVIDIA Rubin platform.
  3. Domestic CSPs (Cloud Service Providers) entering large-scale liquid cooling adoption.
• Recommendations:
  • Components: Kechuang Xinyuan (TIM/Sealing), Envicool, Feilong Shares.
  • Integrated Solutions: Shenling Environment, Chuanrun Shares.
  • New Tech: Focus on micro-channel, two-phase cold plates, and immersion cooling technologies.

6. Grid & Industrial Control: Modernization & Market Reform

Grid Infrastructure

• State Grid Tendering: The first batch of 2026 substation equipment tenders remained at high levels. The UHV (Ultra-High Voltage) tender, driven by four back-to-back projects (Yu-Qian, Xiang-Yue, Min-Gan, Wan-E), exceeds RMB 3.5 billion.
• Power Market Reform: The State Council issued guidelines to perfect the national unified power market, targeting 70% marketized trading volume by 2030. This will accelerate spot market operations and benefit software providers like Guoneng Rixin (power forecasting) and grid digitalization leaders like NARI Technology.
• Transformer Shortage: Global transformer lead times have extended to 100+ weeks in North America due to raw material and labor shortages. Chinese exporters with channel advantages (Sieyuan Electric, Huaming Equipment) are capturing high-premium orders.
• Solid-State Transformers (SST): Emerging as a disruptive technology for AIDC, offering precise control and space savings. Commercial pilots are expected in 2026-2027. Watch Jinpan Technology, Eaglerise.

Industrial Automation

• Inovance Technology (Huichuan): 2025 Preliminary Earnings show Net Profit of RMB 4.97–5.40 billion (+16–26% YoY), meeting expectations. Growth was driven by NEV powertrains and general automation recovery.
• Humanoid Robots: Inovance and other domestic automation firms are strategically positioning in motors, drives, and encoders for humanoid robots, creating a second growth curve.
• Sieyuan Electric HK IPO: Filed for listing in Hong Kong to fund global expansion, R&D, and M&A. The company is well-positioned in transmission, distribution, and emerging sectors like automotive electronics and supercapacitors.

Risks / Headwinds

While the sector outlook is positive, institutional investors must account for the following risks:

1. Policy Execution Risk:

   • The hydrogen and renewable energy sectors are heavily policy-dependent. Any delay in the implementation of subsidy schemes, green fuel certification standards, or cross-departmental coordination could dampen near-term demand.
   • Changes in international trade policies (e.g., EU anti-subsidy investigations, US tariffs) could impact the export competitiveness of Chinese wind and PV products.

2. Intense Price Competition:

   • Despite consolidation, certain segments (e.g., lithium materials, PV modules) still face overcapacity. If demand growth fails to absorb new capacity, price wars could erode margins beyond current expectations.
   • The rapid entry of cross-industry capital into new hotspots (e.g., solid-state batteries, hydrogen) may lead to fragmented competition and inefficient capital allocation.

3. Technological Uncertainty:

   • Solid-State Batteries: While progress is being made, technical hurdles regarding mass production yield, cycle life, and cost reduction remain. Delays in commercialization could impact valuations of pure-play SSB stocks.
   • Space PV: The technical feasibility and economic viability of space-based solar power at scale are yet to be proven. Regulatory hurdles for space debris and spectrum allocation could pose challenges.

4. Macro-Economic Factors:

   • Global interest rate fluctuations could impact the financing costs of capital-intensive projects like offshore wind and nuclear/hydrogen infrastructure.
   • Slower-than-expected recovery in global manufacturing could dampen demand for industrial automation and grid equipment.

5. Supply Chain Disruptions:

   • Geopolitical tensions affecting critical mineral supplies (lithium, nickel, cobalt) or component shortages (IGBTs, high-end chips) could disrupt production schedules.

Rating / Sector Outlook

Sector Rating: BUY (Maintained)

We believe the Power Equipment and New Energy sector is entering a phase of structural differentiation and quality growth. The era of broad-based beta driven solely by capacity expansion is giving way to alpha generated by technological innovation, global supply chain integration, and policy-driven niche markets.

Valuation Perspective:
Many leading companies in the wind, hydrogen, and grid sectors are trading at historically reasonable valuations relative to their projected earnings growth (PEG < 1 for several names). The market has yet to fully price in the long-term earnings visibility provided by the European OSW turnaround and the domestic hydrogen policy shift.

Investment View

Our investment strategy for the coming quarter focuses on three core dimensions: Global Arbitrage, Technological Disruption, and Policy Alpha.

1. Global Arbitrage: Capturing the European & North American Deficits

The divergence between global demand and local supply capabilities creates lucrative opportunities for Chinese manufacturers with global footprints.

• Offshore Wind Foundations (Europe): The exit of SeAH from Hornsea 3 is a stark reminder of Europe’s manufacturing fragility. We recommend Dajin Heavy Industry (002487.SZ) as the primary beneficiary. Its established presence in Europe, proven track record, and capacity to fill the immediate supply gap make it a high-conviction pick. Secondary picks include Tianshun Energy (002531.SZ) and Haili Wind Power (688660.SH).
• Transformers (North America/Global): The 100-week lead time for transformers in the US is a multi-year tailwind. Sieyuan Electric (002028.SZ), with its comprehensive product portfolio and ongoing HK listing to fuel global expansion, is well-positioned. Huaming Equipment (002270.SZ) benefits from the tap-changer monopoly and global export growth.

2. Technological Disruption: Solid-State Batteries & Space PV

Investors should position themselves in companies leading the next generation of energy technologies.

• Solid-State Battery Supply Chain:
  • Gotion High-Tech (002074.SZ): Its partnership with BASF and high-yield pilot line de-risk the commercialization path.
  • Material Suppliers: Look for companies developing sulfide electrolytes and high-nickel cathodes compatible with SSBs. Yongtai Technology (002326.SZ) (via CATL tie-up) and Capchem (300037.SZ) are key monitors.
  • Equipment: Companies providing dry electrode coating and isostatic pressing equipment will see early order flows.
• Space/Aerospace PV:
  • CETC Blue Sky (688XXX.SH): As the first listed pure-play aerospace power system company, it holds a scarce position in the supply chain for satellite power.
  • Auxiliary Materials: High-efficiency, radiation-resistant PV components. Jinko Solar (688223.SH) and Longi Green Energy (601012.SH) are investing in space-grade tech, but smaller specialized material firms like Foster (603806.SH) (encapsulants) and Polymer Material (688503.SH) (conductive paste) may offer higher elasticity.

3. Policy Alpha: Hydrogen & Green Fuels

The elevation of hydrogen to a national strategic priority creates a multi-year investment runway.

• Green Methanol Producers: The supply-demand imbalance for green methanol is acute.
  • Goldwind Science & Technology (002202.SZ): Leveraging its wind assets to produce low-cost green hydrogen for methanol synthesis.
  • Jilin Electric Power (000875.SZ): Active in green ammonia/methanol projects in Northeast China.
  • China Tianying (000035.SZ): Integrated waste-to-energy and green fuel projects.
• Electrolyzer OEMs:
  • Huadian Ke Gong (601226.SH) and Huaguang Huan Neng (600475.SH) have strong order books and state-owned enterprise (SOE) backing, positioning them well for large-scale domestic projects.
• Fuel Cell Components:
  • SinoHytec (688339.SH) and Guofu Hydrogen (688511.SH) are leaders in stack and system integration, poised to benefit from the expansion of hydrogen refueling infrastructure and vehicle subsidies.

4. Core Portfolio Recommendations

Based on the above analysis, we construct the following core portfolio for institutional investors:

Wind Power

• Top Picks: Windey (300772.SZ) (Market share gain), Goldwind (002202.SZ) (Stable leader), Mingyang Smart Energy (601615.SH) (Offshore tech), Sany Heavy Energy (688349.SH) (Cost leadership).
• Export Alpha: Dajin Heavy Industry (002487.SZ), Orient Cable (603606.SH) (Submarine cables), Riyue Heavy Industry (603218.SH) (Castings).

Photovoltaic & Storage

• Top Picks: Sungrow (300274.SZ) (Inverter/Storage leader), Xinyi Solar (0968.HK) (Glass), Jolywood (300393.SZ) (Backsheet/N-type), Flat Glass (6865.HK/601865.SH).
• Tech/BC Theme: Aiko Solar (600732.SH) (BC technology leader, benefiting from patent resolution and silver reduction).
• Equipment: Maxwell (300751.SZ), Autowell (688516.SH), Jiejiewei Chuang (300724.SZ).

Hydrogen

• Top Picks: Kewell (688551.SH) (Test equipment), Huadian Ke Gong, Huaguang Huan Neng.
• Watchlist: SinoHytec, Guofu Hydrogen, CIMC Enric (3899.HK).

Lithium & Solid-State

• Top Picks: CATL (300750.SZ) (Industry anchor), EVE Energy (300014.SZ), Fulin Precision (300432.SZ) (Phosphate/Lithium iron phosphate precursor), Kedali (002850.SZ) (Structural parts).
• SSB Focus: Gotion High-Tech, Yongtai Technology.

Power Equipment & AIDC

• Top Picks: Sieyuan Electric, Samsung Medical (603876.SH) (Smart meters/Global expansion), Vertiv Partners (Liquid Cooling): Kechuang Xinyuan (300731.SZ), Shenling Environment (301018.SZ).
• Grid Digitalization: NARI Technology (600406.SH), Guoneng Rixin (301162.SZ).

Conclusion

The Power Equipment and New Energy sector is no longer a monolithic bet on capacity expansion. It is now a complex ecosystem where geopolitical supply chains, technological breakthroughs, and national strategic directives intersect.

For institutional investors, the key is to navigate away from commoditized segments facing oversupply and towards niches with structural deficits (European OSW foundations, US transformers), policy-backed growth (Hydrogen/Green Fuels), and technological moats (Solid-State Batteries, Liquid Cooling). We believe the current valuation levels offer an attractive entry point for these high-quality assets, with significant upside potential as the 15th Five-Year Plan initiatives begin to take shape in 2026.

Appendix: Detailed Sub-Sector Analysis & Data

A. Photovoltaic & Energy Storage: Price Trends & BC Technology

Price Monitoring (Week of Feb 11, 2026)

• Polysilicon: Prices declined 12% week-on-week. Current prices are above the cash cost of leading enterprises but below full cost for some. Monthly trend: +10%.
• Silicon Wafers (183mm N-type): Prices declined 12% week-on-week. Monthly trend: -4%. Inventory clearance ahead of the Lunar New Year pressured prices.
• Cells (183mm N-type): Prices declined 2% week-on-week. Monthly trend: +18%. Margin pressure persists due to falling wafer prices and stable silver paste costs.
• Modules (183mm N-type): Prices held flat (0% change). Monthly trend: +6%. Overseas markets remain profitable, but domestic competition keeps margins tight.

Strategic Focus: BC (Back Contact) Technology

The resolution of patent disputes surrounding BC technology, combined with the industry-wide push for "silver-less" metallization, creates a resonant opportunity.
* Logic: BC technology offers higher efficiency and aesthetic appeal, suitable for distributed generation and high-end markets. The removal of silver paste dependencies significantly reduces BOM costs.
* Key Player: Aiko Solar (600732.SH). As a pioneer in ABC (All Back Contact) technology, Aiko benefits from both the technological premium and cost reductions. The patent settlement removes legal overhangs, allowing for broader industry adoption and licensing potential.

Space PV Supply Chain Mapping

As the "Musk/Space PV" theme gains traction, the supply chain divides into:
1. Equipment: Maxwell, Autowell, Jingsheng Electromechanical. These firms provide the manufacturing tools for high-efficiency cells.
2. Auxiliary Materials: Foster (Encapsulants), Yamaoto (Glass), Juhe Material (Paste), Dike Shares (Paste). Space environments require higher radiation resistance and thermal stability, favoring high-end material suppliers.
3. Battery/Module: Jinko, JA Solar, Trina, Longi. While these giants are focused on terrestrial markets, their R&D spill-over into space-grade cells is significant.
4. Power Systems: CETC Blue Sky, Shanghai Gangwan. Critical for satellite power management.

B. Wind Power: Detailed Data & Company Analysis

2025 Installation Breakdown

• Total: 130.8 GW (+50% YoY).
• Onshore: 125.3 GW. The rapid increase in average unit size (7.1 MW) reflects the maturity of large-turbine technology.
• Offshore: 5.6 GW. The slight decline is attributed to project timing shifts rather than demand destruction. The larger average size (10.1 MW) indicates a shift towards deeper waters and larger projects.

Export Dynamics

• 2025 Exports: 10.8 GW (+27% YoY).
• Order Visibility: With 40 GW of overseas orders signed in 2025, the revenue recognition for 2026-2027 is highly visible.
• Competitive Landscape: Chinese OEMs are winning bids in Europe, Central Asia, and South America due to cost competitiveness and delivery reliability. The "SeAH Incident" serves as a case study for European developers to diversify supply chains away from single-source local providers who face execution risks.

Company Spotlight: Dajin Heavy Industry

• Catalyst: Awarded significant share of Hornsea 3 monopiles after SeAH exit.
• Capacity: Leading global exporter of wind towers and foundations.
• Financials: Benefiting from favorable exchange rates and high-margin overseas orders.
• Valuation: Trading at a discount to peers despite superior export growth profile.

C. Hydrogen Energy: Policy Deep Dive & Project Pipeline

Policy Timeline & Significance

• Feb 16, 2026: Qiushi Journal Article. Explicit mention of hydrogen as a "new growth point." This is the highest level of political endorsement, signaling that hydrogen is no longer just an environmental initiative but an economic engine.
• NEA Technical Pathway: Focus on "Green Hydrogen Substitution" in existing industries (refining, chemicals) and "Green Fuel Certification" for future markets (shipping, aviation).

Project Pipeline

• Goldwind Green Methanol (Phase III): Approved. Investment > RMB 2.3 billion. Capacity: 725,000 tons/year. This is one of the largest single-site green methanol projects globally.
• Shanghai Green Fuel Hub: Targeting 2030 to become a global center for green fuel bunkering and trading. This creates a demand anchor for Yangtze River Delta producers.
• National Natural Science Foundation Joint Fund: Two hydrogen projects selected, indicating strong state support for basic research and innovation.

Economics of Green Methanol

• Current Price Premium: Green methanol trades at a significant premium to grey methanol due to scarcity and compliance value (EU ETS, IMO Carbon Intensity Indicator).
• Cost Curve: As green hydrogen costs fall (driven by cheaper renewables and electrolyzers), the premium will narrow, but volume will explode. Early movers lock in long-term off-take agreements at favorable terms.

D. Lithium Batteries: Solid-State Progress & Market Data

Solid-State Battery Roadmap

• 2025-2026: Pilot lines and small-batch production. Focus on consumer electronics and high-end EVs.
• 2027-2029: Demonstration phase. Sulfide-based SSBs in premium EVs. Cost parity with high-end liquid ternary batteries.
• 2030+: Mass adoption. Expansion to mainstream EVs. LFP remains dominant for entry-level/mid-range vehicles.

Key Corporate Developments

• Gotion High-Tech:
  • Partnership: BASF brings material science expertise; Gotion brings manufacturing scale.
  • Yield: >90% yield on 0.2 GWh line is a critical milestone. It proves manufacturability.
• BYD:
  • Sulfide Route: Chosen for its high ionic conductivity. Breakthroughs in interface stability are key.
  • Strategy: Dual-track. LFP for volume, SSB for premium. This mitigates risk and maximizes market coverage.

Lithium Price Monitor (Feb 6-12, 2026)

• Lithium Carbonate:
  • Industrial Grade: RMB 140,000/ton (+2.19%).
  • Battery Grade: RMB 143,000/ton (+2.14%).
  • Trend: Slight rebound due to restocking before holidays and supply tightening (production cuts). Inventory levels are low, supporting prices.
• Nickel Sulfate: Stable at RMB 97,000/ton. Weak demand from ternary precursors offsets supply cuts.
• Cathode Materials:
  • LFP: RMB 52,400/ton (Power), RMB 50,500/ton (Storage). Supported by rising lithium carbonate costs.
  • Ternary (NCM 523): RMB 176,400/ton. Weak demand from consumer electronics.
• Anode Materials: Stable. Artificial graphite dominates (92% of production). Graphitization processing fees are stable, indicating balanced supply/demand.

E. AIDC & Liquid Cooling: Market Expansion

Vertiv’s Guidance Implications

• Order Growth: 252% YoY organic order growth is exceptional. It implies that liquid cooling is moving from "optional" to "mandatory" for AI clusters.
• Backlog: $15 billion backlog provides revenue visibility for 2-3 years.
• Margin Expansion: Operating profit grew faster than sales, indicating operating leverage and pricing power in high-demand segments.

Chinese Supply Chain Opportunities

• Thermal Interface Materials (TIM): Kechuang Xinyuan is a key supplier of TIMs and sealing solutions. As power densities rise, the quality and quantity of TIMs required increase.
• Cold Plates & Manifolds: Envicool and Feilong Shares are expanding capacity to meet global demand.
• Integrated Solutions: Shenling Environment provides full-room liquid cooling solutions, benefiting from domestic data center upgrades.

Technology Trends

• Immersion Cooling: Gaining traction for extreme density applications.
• Two-Phase Cold Plates: More efficient than single-phase, likely to be adopted in next-gen NVIDIA racks.
• Direct-to-Chip: Becoming the standard for GPU cooling.

F. Grid & Industrial Control: Reform & Recovery

Power Market Reform

• Unified Market: The goal of 70% marketized trading by 2030 will unlock value for flexible resources (storage, demand response).
• Spot Market: Accelerated rollout will benefit companies with advanced forecasting and trading algorithms (Guoneng Rixin).

Transformer Shortage

• Global Context: Aging grids in developed markets + AI load growth = Structural deficit.
• Chinese Advantage: Complete supply chain, skilled labor, and scalable capacity. Companies with UL/CE certifications and established distribution networks (Sieyuan, Huaming) are best positioned.

Industrial Automation Recovery

• Inovance: Steady growth in general automation and NEV powertrains. The humanoid robot theme adds optionality.
• Robotics: Domestic firms are making inroads in core components (servo motors, reducers), reducing reliance on Japanese/European suppliers.

Final Investment Checklist for Institutions

1. Rebalance towards Export Winners: Increase exposure to Dajin Heavy Industry and Sieyuan Electric to capture global infrastructure spending.
2. Initiate Hydrogen Positions: Build positions in Goldwind and Huadian Ke Gong ahead of the 15th Five-Year Plan details.
3. Monitor SSB Catalysts: Track Gotion and BYD’s pilot line yields and customer feedback. Add Yongtai Technology on dips.
4. Liquid Cooling Momentum: Add Kechuang Xinyuan and Shenling Environment on any pullback, given Vertiv’s strong guidance.
5. Risk Management: Hedge against potential trade tariff escalations by diversifying across domestic-focused themes (Grid, Hydrogen) and global leaders with localized production.

This report reflects our view as of February 2026. We will continue to monitor policy developments, technological breakthroughs, and quarterly earnings to refine our recommendations.

Disclaimer: This report is prepared by Guojin Securities for institutional investors. It is based on information believed to be reliable, but no guarantee is made regarding its accuracy or completeness. The views expressed are subject to change without notice. This report does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions.