Power Equipment & New Energy: Weekly Sector Review (Feb 2–8, 2026)

Date: February 10, 2026
Sector Rating: In-line with Market – A (Maintained)
Analysts: Xiao Suo, Jia Huilin (Shanxi Securities)

Executive Summary

The Power Equipment and New Energy sector demonstrated a mixed landscape during the reporting week, characterized by significant geopolitical and technological developments in space-based infrastructure alongside subdued domestic pricing dynamics in the photovoltaic (PV) supply chain.

On the macro-technological front, the U.S. Federal Communications Commission (FCC) accepted SpaceX’s application for a mega-constellation of up to one million satellites, signaling a potential paradigm shift toward orbital data centers for AI computing. Elon Musk’s commentary suggesting space-based AI deployment could become cost-dominant within 30–36 months has ignited investor interest in "Space PV" concepts, although this remains a long-term thematic play.

Domestically, the PV industry continues to navigate a period of inventory digestion and weak demand ahead of the Lunar New Year. The National Energy Administration reported that December 2025 saw 6,190 new registered PV projects, predominantly commercial and industrial distributed systems. Meanwhile, the utilization rate for PV power in 2025 stood at 94.8%, indicating stable grid absorption despite rapid capacity expansion. Pricing across the silicon-to-module chain remained largely flat or slightly depressed due to cautious procurement strategies, with manufacturers reducing output to balance supply and demand.

We maintain our "In-line with Market – A" rating for the sector. While short-term price pressure persists, structural opportunities remain in high-efficiency BC technology, supply-side consolidation leaders, and energy storage integration.

Key Takeaways

1. Technological Catalyst: SpaceX & The Space-AI Nexus

• Regulatory Milestone: On February 4, 2026 (EST), the FCC accepted and publicized SpaceX’s application to build a non-geostationary satellite system comprising up to 1 million satellites. This network aims to create an orbital data center capable of supporting advanced AI models.
• Cost Implications: In a recent interview (February 6), Elon Musk stated that deploying AI in space could become the lowest-cost option within 30–36 months. This narrative introduces a new demand vector for high-efficiency, radiation-hardened solar technologies, potentially benefiting upstream equipment and material suppliers involved in space-grade PV solutions.

2. Domestic PV Market: Utilization & Installation Data

• Grid Absorption: The Electric Power Planning & Engineering Institute reported the 2025 PV utilization rate at 94.8%, with wind power at 94.3%. These figures suggest that grid curtailment risks remain manageable despite aggressive capacity additions.
• Installation Trends: In December 2025, China added 6,233 new registered new-energy projects (excluding residential rooftop PV). Of these, 6,190 were PV projects, highlighting a strong skew towards distributed generation:
  • Commercial & Industrial (C&I) Distributed: 6,142 projects.
  • Centralized Utility-Scale: 48 projects.
  • Wind: 36 projects.
  • Implication: The dominance of C&I distributed PV underscores the resilience of self-consumption models amidst evolving electricity market mechanisms.

3. Supply Chain Price Tracking: Stabilization Amidst Weak Demand

Pre-holiday caution has led to a "wait-and-see" approach among downstream buyers, resulting in low transaction volumes and stable-to-softening prices.

• Market Dynamics: With the Lunar New Year approaching, operating rates for wafer, cell, and module manufacturers are expected to decline in February. The market is currently in a state of weak supply and weak demand, with prices likely to remain stable in the near term.

4. Strategic Investment Themes

Based on current fundamentals and emerging trends, we recommend focusing on the following sub-sectors:
* BC (Back Contact) Technology Leaders: Benefiting from premium pricing and efficiency gains.
* Supply-Side Consolidation: Companies with cost advantages in polysilicon and glass.
* Solar + Storage Integration: As grid flexibility becomes critical.
* Power Market Reform: Digitalization and trading platforms.
* Space PV Concept: Long-term speculative interest in companies with potential space-grade technology capabilities.

Risks / Headwinds

Investors should monitor the following risk factors that could impact sector performance:

1. Installation Misses: Actual PV installation volumes may fall short of expectations due to grid connection bottlenecks or financing constraints.
2. Price Volatility: Continued fluctuations in raw material prices (polysilicon, silver paste) could squeeze margins for mid-stream manufacturers.
3. Geopolitical & Policy Risk: Changes in trade policies in key overseas markets (e.g., U.S., EU) could disrupt export channels.
4. Technology Execution Risk: The "Space PV" theme is currently nascent; progress in satellite-based solar deployment may be slower than anticipated, leading to valuation corrections in concept stocks.
5. Inventory Overhang: Persistent high inventory levels in the wafer and module segments could delay price recovery even after demand picks up post-holiday.

Rating / Sector Outlook

Sector Rating: In-line with Market – A (Maintained)

We believe the sector is currently in a consolidation phase. The immediate catalysts are limited by seasonal demand weakness, but the medium-term outlook remains supported by global energy transition goals and technological iteration (N-type/BC). The emergence of the "Space AI/PV" narrative adds a novel growth dimension, though its financial impact is not imminent.

Top Picks & Ratings:

Watch List (Space PV Theme): Liancheng Numerical Control, DKEM, LONGi Green Energy, Boqian New Materials, GCL Tech, Maxwell Technologies, Jingsheng Electromechanical.

Investment View

1. Short-Term: Navigate the Holiday Lull

The immediate weeks leading up to and following the Lunar New Year will likely see muted trading activity and continued price stability in the PV chain. Investors should use this period to assess company-specific inventory health and order books for Q1 2026. The decline in wafer prices (-6% to -7%) reflects temporary demand softness rather than a structural collapse, given that cell and module prices have held firm. We expect a gradual normalization of operating rates in March.

2. Medium-Term: Technology Differentiation is Key

The price parity between TOPCon and emerging BC technologies is shifting. BC modules command a significant premium (~10-16%) over standard TOPCon, indicating strong market recognition of their aesthetic and efficiency advantages, particularly in distributed/C&I segments. Aiko Solar remains our top pick in this niche. Simultaneously, the stabilization of polysilicon prices around 54 RMB/kg suggests the bottoming out of the cycle, favoring low-cost producers like Daqo New Energy.

3. Long-Term Thematic: The Orbital Frontier

While speculative, the FCC’s acceptance of SpaceX’s million-satellite plan and Musk’s comments on space-based AI compute represent a potential inflection point for high-efficiency, lightweight PV technologies. Traditional terrestrial PV metrics may not fully apply here; instead, focus should be on companies with expertise in high-efficiency cells (HJT/BC) and specialized materials that could adapt to space environments. Stocks like LONGi and Maxwell Technologies are worth monitoring for R&D breakthroughs in this area, though investors should treat this as a long-duration optionality rather than an immediate earnings driver.

4. Grid & Storage: The Enablers

With PV utilization rates holding above 94%, the bottleneck is shifting from generation to transmission and flexibility. Sungrow Power and Hyperstrong are well-positioned to capture value from the increasing necessity of storage integration. Furthermore, as electricity market reforms deepen, Longshine Technology offers exposure to the digital infrastructure required for dynamic pricing and virtual power plant operations.

Conclusion:
We advise institutional investors to maintain a balanced portfolio, overweighting leaders in BC technology and energy storage, while keeping a small tactical allocation to space-PV concept stocks for thematic exposure. Avoid chasing short-term price movements in commoditized segments (standard wafers/modules) until clear signs of demand acceleration emerge in Q2 2026.