Equity Research: Power Equipment & New Energy Sector Weekly

Date: January 26, 2026
Analyst: Donghong Zeng, Qiaoyan Ruan | Soochow Securities
Rating: Overweight (Maintained)
Theme: Space-Based PV Opens Vast Horizons; Solid-State Batteries & AIDC Show High Potential

Executive Summary

The Power Equipment sector (SW Index 11061) outperformed the broader market this week (Jan 19–23, 2026), rising 3.57% compared to the Shanghai Composite’s +0.84%. Sub-sectors showed robust momentum, with Wind Power (+7.78%) and Power Generation Equipment (+6.54%) leading gains. The sector’s performance was driven by a confluence of structural catalysts: the accelerating commercialization of Space-Based Photovoltaics (SBPV), breakthroughs in Solid-State Battery (SSB) industrialization, and surging demand for AI Data Center (AIDC) power solutions.

While traditional solar manufacturing faces near-term headwinds from inventory adjustments and silver price volatility, the long-term narrative is shifting towards high-tech frontiers. Elon Musk’s announcement at Davos regarding a combined 200GW annual solar capacity target for Tesla and SpaceX, alongside China’s plan to deploy 13,000 low-orbit satellites by 2030, underscores the immense potential of SBPV. Simultaneously, the energy storage sector is experiencing a global boom, with US large-scale storage installations exceeding expectations and domestic policies enhancing profitability through capacity compensation mechanisms.

We maintain an Overweight rating on the sector. Our investment strategy prioritizes:
1. Energy Storage: Benefiting from global demand growth (>60% CAGR expected) and improving economics.
2. Solid-State Batteries: Approaching critical pilot production phases in 2026, favoring sulfide electrolyte and equipment leaders.
3. Humanoid Robots: Entering the "0-to-1" mass production year, with Tesla’s Optimus leading the charge.
4. AIDC Power: High-voltage DC and solid-state transformer (SST) technologies gaining traction amidst AI算力 (computing power) expansion.

Key Takeaways

1. Sector Performance & Market Sentiment

• Market Outperformance: The Electrical Equipment index rose 3.57%, significantly beating the Shanghai Composite (+0.84%) and Shenzhen Component (+1.11%).
• Sub-Sector Leaders: Wind Power (+7.78%), Power Generation Equipment (+6.54%), Nuclear Power (+4.16%), and Lithium Batteries (+3.78%) all posted strong gains.
• Top Performers: Maxwell Technologies, Hanlan Cable, Oriental Tower, Guangdian Electric, and Huazi Technology led weekly gains.
• Laggards: Huaguang Shares, *ST Tianlong, Taiyong Changzheng, CMOC Group, and Aerospace机电 underperformed.

2. Energy Storage: Global Demand Supercycle

• US Market Surge: US large-scale storage installations reached 1,009 MW in November 2025 (+82% YoY). Full-year 2025 installations are projected to exceed 32.6 GWh (+37% YoY), driven by AI data center demand and policy tailwinds. We forecast 2026 US installations to reach 80 GWh (+51% YoY), with data centers contributing 37 GWh.
• China’s Policy Shift: Domestic independent storage models are becoming economically viable, replacing mandatory paired storage as the primary growth driver. We have upgraded our 2025 China storage installation forecast to 160 GWh+ (+40% YoY) and 2026 to 260 GWh (+60% YoY).
• Global Outlook: Global storage installations are expected to grow by >60% in 2025 to 350 GWh+, reaching 1,000 GWh+ in 2026. Europe and emerging markets (Middle East, Australia) are seeing doubledigit growth rates.
• Price Trends: Lithium carbonate prices rebounded sharply to ~RMB 170,000/ton, signaling strong downstream restocking ahead of the Lunar New Year and export tax rebate adjustments.

3. Electric Vehicles (EV) & Lithium Batteries: Resilience & Innovation

• Sales Momentum: China’s NEV retail sales in January 2026 are estimated at ~800,000 units (+8% YoY), with a penetration rate of 44.4%. December 2025 saw total NEV sales of 1.71 million units (+7% YoY), bringing full-year 2025 sales to 16.44 million (+28% YoY).
• Policy Support: Germany will restart NEV subsidies in 2026 (up to €6,000). In China, subsidy structures remain favorable for mid-to-high-end models, supporting margin stability.
• Solid-State Battery Breakthroughs:
  • Progress: BYD, Gotion High-Tech, and FAW have unveiled 60Ah vehicle-grade SSB cells with energy densities of 350–400 Wh/kg.
  • Timeline: The industry is entering the critical pilot line phase in H1 2026. Mass production is anticipated to accelerate in H2 2026–H1 2027.
  • Investment Focus: Sulfide solid electrolytes, lithium sulfide materials, and dry electrode equipment providers are key beneficiaries.
• Supply Chain Pricing:
  • Lithium Carbonate: Rebounded to RMB 164,000–171,000/ton (+13% WoW).
  • Cathodes: LFP prices rose to RMB 58,600/ton (+5.7% WoW); Ternary materials also trended upward.
  • Electrolyte: LiPF6 prices softened slightly to RMB 146,000/ton (-5.8% WoW), but long-term contracts remain stable near RMB 150,000/ton.

4. Photovoltaics (PV): Structural Transition & Space Ambitions

• Space-Based PV Catalyst: At Davos, Elon Musk announced that SpaceX and Tesla aim to build a combined 200 GW/year solar manufacturing capacity, with 40 GW dedicated to space applications for AI satellites. China Star Network plans to deploy 13,000 low-orbit satellites by 2030. This creates a new high-value market for GaAs, HJT, and perovskite technologies.
• Terrestrial Market Challenges:
  • Prices: Silicon module prices remain under pressure. Topcon modules averaged RMB 0.717/W, while distributed projects saw quotes rise to RMB 0.80–0.88/W due to soaring silver prices (Shanghai Silver Futures broke RMB 23,000/kg).
  • Profitability: Major integrated players (Longi, Tongwei, Trina, Jinko) reported significant losses for 2025 due to asset impairments and low margins. However, equipment makers and auxiliary material suppliers (silver paste, glass) are benefiting from technology iterations.
• Outlook: While terrestrial demand is weak in Q1 2026, the strategic pivot towards space PV and next-gen technologies (BC, HJT) offers a path out of the cycle for leaders like Longi and Jinko.

5. Wind Power: Offshore Recovery & Price Stabilization

• Offshore Wind (OSW): China’s OSW sector is entering a high-growth phase, with 2025 installations expected to exceed 8 GW. European OSW is also in a sustained upcycle.
• Onshore Wind: 2025 onshore installations are projected to exceed 100 GW (+25% YoY). Turbine prices have increased by 3–5%, aiding margin repair for OEMs.
• Recent Bids: Weekly onshore wind bids totaled 2.35 GW. Average bid prices stabilized around RMB 1,525/kW. Notable wins include Goldwind securing a 500 MW offshore project (Yangjiang Sanshandao II) for RMB 1.28 billion.

6. Humanoid Robots: The "0-to-1" Inflection Point

• Tesla Optimus: Musk confirmed Optimus will be used in industrial settings in 2026 and available for public sale by late 2027. The long-term market potential is estimated at >100 million units.
• Domestic Progress:
  • Unitree: Clarified 2025 humanoid robot shipments exceeded 5,500 units (actual deliveries), with total production over 6,500 units.
  • Magic Atom: Became the official intelligent robot partner for the 2026 CCTV Spring Festival Gala.
  • Corporate Actions: Zhongqing Robot and Xinghaitu completed shareholding reforms, signaling IPO preparations.
• Investment Logic: The sector is akin to EVs in 2014. We recommend focusing on the Tesla supply chain and core component leaders (actuators, reducers, sensors, screw rods).

7. Grid & Industrial Control: AI-Driven Upgrades

• Grid Investment: 2025 grid investment grew steadily, with UHV and distribution network upgrades driving demand. Transformer exports remain highly景气 (prosperous).
• AIDC Power Demand: AI data centers require high-power, high-voltage DC solutions. Solid-State Transformers (SST) are gaining traction. Companies with overseas channels and technical advantages (e.g., Siyuan Electric, McGee Meter) are well-positioned.
• Industrial Automation: December 2025 Manufacturing PMI rose to 50.1% (+0.9 ppt MoM). Industrial robot production increased by 28% YoY. The sector is seeing a weak recovery, with robotics providing a second growth curve for automation leaders like Inovance.

Financial Highlights & Corporate Updates

Earnings Previews (2025 Full Year Estimates)

Strategic Corporate Moves

• CATL: Launched the industry’s first mass-produced sodium-ion battery for light commercial vehicles (Tianxing II series), featuring 175 Wh/kg density and excellent low-temperature performance.
• Inovance Technology: Planning H-share listing in Hong Kong to expand international capital access.
• Mingyang Smart Energy: Acquiring Dehua Chip (100% equity) to integrate semiconductor capabilities into wind power systems.
• Foshan Plastics: Completed acquisition of Jinli New Energy, strengthening its position in lithium separator films.
• Junda Shares: Private placement of H-shares to raise ~HKD 398 million for space PV R&D and commercial aerospace investments.

Risks / Headwinds

1. Investment Slowdown: A deceleration in State Grid Corporation of China (SGCC) investment or delays in tender approvals could negatively impact power equipment revenues.
2. Policy Uncertainty: Changes in EV subsidies (domestic and international, e.g., EU trade policies) or renewable energy support mechanisms could dampen demand.
3. Price Wars: Intensifying competition in PV modules, lithium batteries, and wind turbines may lead to margin compression beyond current expectations.
4. Raw Material Volatility: Sharp fluctuations in lithium, silver, and copper prices can disrupt supply chain costing and profitability.
5. Geopolitical Tensions: Trade barriers (tariffs, export controls) in the US and Europe could hinder the overseas expansion of Chinese manufacturers.

Rating / Sector Outlook

Sector Rating: Overweight (Maintained)

We believe the Power Equipment sector is transitioning from a period of broad-based capacity expansion to one of technological differentiation and structural growth. While traditional manufacturing segments (standard PV modules, basic lithium cells) face cyclical headwinds, high-growth niches are emerging:

• Energy Storage: The most certain growth engine, driven by global grid modernization and AI power needs.
• Solid-State Batteries: The next disruptive technology in EVs, with 2026 being a pivotal year for pilot validation.
• Space PV & AIDC: Emerging themes with massive long-term TAM (Total Addressable Market), offering early-mover advantages to specialized suppliers.
• Humanoid Robots: Moving from concept to commercialization, creating a new supply chain ecosystem.

Investment View & Recommended Portfolio

We recommend a barbell strategy: holding high-certainty leaders with stable cash flows while allocating to high-elasticity innovators in solid-state batteries, robotics, and space PV.

1. Energy Storage & Batteries (Core Holdings)

• CATL (300750.SZ): Global leader in power and storage batteries. Strong pricing power, technological moat in SSB, and diversified global footprint. Valuation: 26x 2025E PE.
• BYD (002594.SZ): Integrated EV and storage giant. Sales momentum remains strong; storage overseas expansion is accelerating. Valuation: 18x 2025E PE.
• EVE Energy (300014.SZ): Strong growth in cylindrical batteries and large-format storage. Distinctive technology path. Valuation: 25x 2025E PE.
• Sungrow (300274.SZ): Global inverter leader and top-tier large-scale storage integrator. Expanding into AIDC power solutions. Valuation: 24x 2025E PE.

2. Material Leaders (Profit Elasticity)

• Tinci Materials (002709.SZ): Electrolyte and LiPF6 leader. Benefiting from price stabilization and volume growth. Valuation: 58x 2025E PE.
• Hunan Yuneng (301358.SZ): LFP cathode leader. Direct beneficiary of storage boom. Valuation: Attractive relative to growth.
• Putailai (603659.SH): Anode leader with integrated graphitization. Profitability inflecting upwards. Valuation: 28x 2025E PE.
• Ganfeng Lithium (002460.SZ) / Tianqi Lithium (002466.SZ): Resource giants with leverage to lithium price recovery.

3. Humanoid Robots & Automation (High Growth)

• Sanhua Intelligent Controls (002050.SZ): Thermal management leader; key supplier for Tesla Optimus actuators. Valuation: 56x 2025E PE.
• Inovance Technology (300124.SZ): Industrial automation alpha leader. Expanding into robotics and EV powertrains. Valuation: 33x 2025E PE.
• Kedali (002850.SZ): Global structural件 (structural parts) leader. Expanding into harmonic drives and robot assemblies. Valuation: 28x 2025E PE.
• Zhejiang Rongtai (605117.SH): Mica insulation leader; rapid progress in screw rods and assemblies for major robot clients.

4. Grid, AIDC & Offshore Wind

• Siyuan Electric (002028.SZ): Dual leader in domestic and overseas power equipment. Strong order book and SST technology for AIDC. Valuation: Attractive.
• Pinggao Electric (600312.SH): UHV AC/DC equipment leader. Low valuation, consistent earnings beat. Valuation: 19x 2025E PE.
• Dajin Heavy Industry (002487.SZ): Offshore wind foundation exporter. Benefiting from European OSW revival. Valuation: 44x 2025E PE.
• Oriental Cable (603606.SH): High-barrier offshore cable supplier. Project pipeline restarting. Valuation: 20x 2025E PE.

5. Emerging Themes (Space PV & SSB)

• Nacroler (833509.BJ): Dry electrode equipment leader. Critical for SSB and space battery production.
• Junda Shares (002865.SZ): PV cell leader actively investing in space PV technology.
• Shanghai Washba (603200.SH): Comprehensive layout in solid-state battery materials.

Conclusion: The sector is poised for a structural re-rating driven by technological innovation (SSB, Space PV, Robotics) rather than just capacity expansion. Investors should focus on companies with verified technological leadership, global channel capabilities, and exposure to these high-growth verticals.

Appendix: Key Data Tables

Table 1: Valuation of Key Covered Companies (as of Jan 23, 2026)

Source: Wind, Soochow Securities Estimates

Table 2: Recent Price Trends in Key Raw Materials (Week of Jan 19–23, 2026)

Source: SMM, Infolink, Wind

Disclaimer: This report is prepared by Soochow Securities for institutional investors only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities. The information contained herein is based on sources believed to be reliable, but Soochow Securities does not guarantee its accuracy or completeness. Investors should conduct their own independent research before making investment decisions.