Equity Research: New Energy & Power Equipment

Date: January 2026
Analysts: Yao Yao (S1130512080001), Zhang Jiawen (S1130523090006)
Contacts: Fan Xiaopeng, Peng Zhiqiang, Lu Wenjie

Title: "Heaven and Earth Resonance": Photovoltaics Reborn Amidst SpaceX Catalyst; Strategic Opportunities in Wind, Hydrogen, and Grid Infrastructure

Executive Summary

The New Energy and Power Equipment sector is undergoing a structural inflection point driven by a confluence of disruptive technological narratives, policy tailwinds, and fundamental balance sheet repairs. The primary catalyst this week is Elon Musk’s announcement at the Davos World Economic Forum regarding SpaceX and Tesla’s plan to build 100GW of solar manufacturing capacity annually in the US within three years—split between space-based and ground-based applications. This "super-expectation" guidance has ignited the entire photovoltaic (PV) sector, shifting the narrative from mere capacity expansion to a strategic imperative for US energy independence and space infrastructure.

We posit that the PV sector is entering a phase of "Rebirth in 2026," driven by a "Heaven and Earth Resonance" logic:
1. "Heaven" (Space PV): The rapid reduction in launch costs via Starship reusability accelerates the commercial viability of space-based solar, favoring high-efficiency, lightweight, and radiation-resistant technologies (e.g., p-HJT, Perovskite, flexible encapsulants).
2. "Earth" (Ground PV): The urgent need for US domestic supply chains, coupled with the "balance sheet clearing" evident in 2025 annual performance previews of Chinese leaders, sets the stage for a robust recovery in profitability and valuation.

Beyond PV, we maintain a constructive outlook on several adjacent sectors:
* Wind Power: Domestic installations are projected to stabilize at 120GW annually (2026-2028). European offshore wind developers (e.g., Ørsted) are increasingly considering Chinese turbines due to cost pressures and local capacity shortages, creating a significant export opportunity.
* Grid Infrastructure: Overseas demand remains robust, with power equipment exports up 20% YoY in 2025. Domestically, the "15th Five-Year Plan" promises nearly RMB 5 trillion in combined investment from State Grid and China Southern Power Grid, underpinning long-term visibility.
* Hydrogen: The issuance of guidelines for "Zero-Carbon Factories" elevates hydrogen to a pillar of industrial decarbonization, particularly for hard-to-abate sectors like steel and chemicals.
* AIDC Power & Cooling: The transition to NVIDIA’s Rubin Ultra architecture in 2027 is driving a surge in power density requirements, benefiting liquid cooling and advanced power supply manufacturers.
* Lithium Battery Tech: Progress in solid-state electrolytes (Gotion High-Tech) and commercial sodium-ion batteries (CATL) highlights the industry’s shift towards next-generation chemistries.

Investment Stance: We recommend an overweight position in PV Equipment and Auxiliary Materials, Wind Power Offshore Supply Chain, Grid Export Leaders, and Hydrogen Infrastructure. The sector is transitioning from a period of intense price competition to one of technological differentiation and global supply chain restructuring.

Key Takeaways

1. Photovoltaics: The "Musk Catalyst" and Structural Reset

1.1 The Space-Ground Synergy

Elon Musk’s declaration that SpaceX and Tesla will independently strive to build 100GW/year of solar manufacturing capacity in the US over the next three years is a game-changer. This is not merely a capacity addition; it is a strategic response to high US tariff barriers and a bet on the future of space-based energy.

• Space Dimension: The full reusability of Starship is expected to drop launch costs to <$100/pound, making large-scale satellite deployment economically viable. This shifts the financial model of commercial satellites from prioritizing extreme reliability/longevity to minimizing manufacturing costs. Consequently, crystalline silicon cells are poised to replace expensive Gallium Arsenide (GaAs) cells in space applications.
  • Technology Winner: p-HJT (Heterojunction) is emerging as the preferred crystalline technology for space due to its symmetric structure (facilitating thinning), superior radiation resistance compared to N-type cells, and high efficiency.
  • Material Innovation: Demand for flexible, radiation-resistant, and atomic-oxygen-resistant materials is surging. Key solutions include UTG (Ultra-Thin Glass) and CPI (Colorless Polyimide) films.
• Ground Dimension: Tesla’s 100GW target is roughly double the current annual US installation volume. Given the US’s lack of domestic battery cell capacity (only 3GW of outdated PERC capacity vs. 65GW module capacity) and strict "Foreign Entity of Concern" (FEOC) rules under the Inflation Reduction Act (IRA), there is an urgent need for localized, compliant supply chains. Chinese companies with established overseas manufacturing footprints and technical leadership are best positioned to benefit from this "autonomous control" drive, either through direct supply or technology licensing.

1.2 Financial Bottoming and Balance Sheet Cleaning

The 2025 annual performance previews from major PV players indicate a decisive "clearing of the balance sheet." Many leading firms have taken significant asset impairment charges in Q4 2025, effectively writing down obsolete capacity and inventory.

Source: Company Announcements, Guojin Securities Institute

Implication: With asset quality significantly optimized by the end of 2025, these companies are "traveling light" into 2026. As demand recovers and prices stabilize, the operating leverage will result in substantial earnings elasticity. The stock prices of many PV firms have retraced to levels seen in Q2 2025, reflecting pessimistic expectations that are now being overturned by the new demand narrative.

1.3 Investment Hierarchy in PV

We recommend a sequential focus based on the "Space-Ground" logic:
1. Equipment: First to benefit from capacity expansion and technology iteration (especially HJT and thinning technologies).
* Key Players: Maxwell (Maiwei), Jiejia Weichuang, Autowell (Aotewei), Jingsheng Electromechanical.
2. Auxiliary Materials: Differentiated by application.
* Space: Flexible, radiation-resistant materials (UTG, CPI). Key Players: Lens Technology, Kaisheng Technology, Foster, Junda.
* Ground: Companies with overseas production capacity to bypass tariffs. Key Players: Flat Glass (Vietnam/Indonesia), Xinyi Solar (Malaysia/Indonesia), Yongzhen (Vietnam).
3. Cells & Modules:
* Space: Manufacturers with HJT/Perovskite capabilities. Key Players: Junda, Risen Energy.
* Ground: Firms with established overseas factories and channel access. Key Players: Canadian Solar, Jinko, Longi, Trina, JA Solar.

2. Wind Power: Domestic Stability and European Breakthrough

2.1 Domestic Market: 120GW Annual Baseline

The China Wind Energy Association (CWEA) forecasts that domestic wind installations will maintain a level of 120GW per year from 2026 to 2028 (100GW Onshore, 20GW Offshore).
* Resource Potential: China has a technical exploitable potential of 8,000GW at 150m height, with only 7.5% currently developed. This supports long-term growth towards the 2060 carbon neutrality goal.
* Policy Shift: The implementation of "Document No. 136" (competitive bidding) has changed the revenue model. High generation volume no longer guarantees high revenue; instead, longer turbine life and better output curves are becoming key to profitability. This favors high-quality manufacturers over low-cost bidders.
* Application Expansion: Integration with high-energy-consuming industries (aluminum, silicon), data centers, and green hydrogen/ammonia projects will increase wind power’s share of total electricity consumption.

2.2 International Market: The European Opportunity

Reports indicate that Ørsted, the world’s largest offshore wind developer, is considering purchasing Chinese wind turbines as part of its "Dragon Project."
* Urgency: Europe aims for 9GW of offshore wind grid connection by 2030 and 16GW by 2031, requiring >10MW turbines. However, European local manufacturing capacity for large turbines is only ~4GW, creating a massive supply gap.
* Inevitability: Chinese manufacturers lead in turbine scaling (20MW+ vs. Europe’s 15MW) and cost efficiency. Despite political headwinds, the economic imperative for developers to reduce Levelized Cost of Energy (LCOE) makes Chinese turbines attractive.
* Strategy: To mitigate political risk, Chinese firms are accelerating localization. Building factories in Europe is becoming the standard entry strategy.
* Key Beneficiaries:
* OEMs: Mingyang Smart Energy (leading localization), Goldwind, Dongfang Electric.
* Supply Chain: Dajin Heavy Industry (foundations), Orient Cable (cables), Haili Wind Power.

2.3 Company Focus: Dajin Heavy Industry

• 2025 Performance: Expected net profit of RMB 1.05-1.2 billion (+122% to +153% YoY), meeting expectations.
• 2026 Outlook: We expect orders to exceed expectations. Over 12GW of European offshore projects will confirm foundation suppliers in 2026, representing 150-180k tons of demand. Assuming a 30% market share, Dajin could secure 50k tons of orders (vs. 22k tons in 2025).
• Logistics Advantage: The maiden voyage of its self-owned transport ship, KING ONE, and the signing of a second terminal in Cuxhaven, Germany, enhance its integrated service offering, improving net margins per ton.

3. Grid Infrastructure: Export Boom and Domestic Investment Surge

3.1 Export Momentum

Customs data for 2025 shows strong growth in power equipment exports, driven by global grid modernization and AI data center demand.
* Total Exports: $79.3 billion in 2025, +20% YoY.
* Transformers: $9.0 billion, +35% YoY. December exports were $950 million, +32% YoY.
* High-Voltage Switches: $5.4 billion, +30% YoY. December exports were $560 million, +41% YoY.
* Driver: Severe supply-demand mismatch overseas, particularly in North America, where transformer lead times have extended to 100+ weeks. Capacity expansion in the West is delayed until 2027-2028 due to labor and material constraints.

3.2 Domestic Investment: The "15th Five-Year Plan" Kickoff

• China Southern Power Grid (CSG): Announced 2026 fixed asset investment of RMB 180 billion, a five-year high. The total investment for the 15th Five-Year Plan (2026-2030) is estimated at nearly RMB 1 trillion.
• State Grid & CSG Combined: Total investment for the 15th Five-Year Plan is projected to approach RMB 5 trillion.
• Focus Areas:
  1. Modern Grid Infrastructure: Flexible DC interconnections, distribution grid upgrades, and digitalization.
  2. Strategic Emerging Industries: Charging infrastructure, "Electric Hongmeng" ecosystem, marine energy, and embodied AI.

3.3 Thematic Opportunities in Grid

1. Power Transformers (Global Shortage): A "hard currency" asset. Companies with export channels and fast delivery capabilities will command premium pricing.
   • Focus: Sieyuan Electric, Huaming Equipment, Shenma Power.
2. Solid-State Transformers (SST): A disruptive technology for AI Data Centers (AIDC). As rack power density climbs to 600kW-1MW, SSTs offer precise control and space savings. 2026 is expected to be a year of prototype verification, with commercialization starting in 2027.
   • Focus: Jinpan Technology, Eaglerise, Sifang Shares, XD Group.
3. Domestic Valuation Repair: With the 15th Five-Year Plan starting, UHV (Ultra-High Voltage) approvals are expected to accelerate. Smart meter tenders in Q1 2026 under new standards may drive volume and price increases.
   • Focus: Pinggao Electric, Xuji Electric, NARI Technology, Sanxing Medical, Hexing Electrical.

4. Lithium Batteries: Technological Diversification

4.1 Solid-State Battery Progress

• Gotion High-Tech: Its subsidiary, Hefei Qianrui, has publicized a project to produce 10,000 tons/year of sulfide solid-state electrolytes.
  • Product Mix: Li-P-S-Cl (2,000 tons), Li-P-S-Cl-Br (6,000 tons), Li-P-S-Cl-I (2,000 tons).
  • Significance: This marks a significant scale-up in solid-state material production, moving from lab to pilot/commercial scale. Sulfide electrolytes are considered a leading pathway for all-solid-state batteries due to high ionic conductivity.

4.2 Sodium-Ion Commercialization

• CATL: Launched the Tianxing II Light Commercial Series, featuring the industry’s first mass-produced sodium-ion battery (45 kWh pack).
  • Performance: Energy density of 175 Wh/kg; cycle life >10,000 cycles.
  • Low-Temperature Capability: Retains 90% charge at -40°C; supports plug-and-charge at -30°C.
  • Application: Ideal for small vans and micro-trucks, addressing winter range anxiety in northern regions.
  • Cost Advantage: Sodium is 1,000x more abundant than lithium, with extraction costs ~1/20th of lithium, offering long-term cost reduction potential.

4.3 Market Dynamics

• Lithium Carbonate: Prices rebounded to ~RMB 162,000-168,000/ton in late January 2026, driven by futures trading and pre-holiday restocking. Inventory levels are low, and export tax rebate adjustments have spurred a "rush to export" in Q1.
• Cathode Materials: LFP prices rose due to cost push from lithium carbonate and iron phosphate. Ternary materials remain cautious due to fluctuating raw material costs.
• Anode: Prices stable. Demand supported by energy storage; EV demand is seasonally weak. Policy guidance to curb无序 (disorderly) capacity expansion may help stabilize margins.

5. AIDC Power & Liquid Cooling: The AI Infrastructure Boom

5.1 Power Supply Upgrade

• NVIDIA Rubin Ultra: Scheduled for 2027, this platform will require 800V power systems as standard. This drives a significant increase in the value content of power supplies per rack.
• Market Shift: Power supplies are transitioning from standard commodities to highly customized, high-margin components.
• Chinese Competitiveness: Mainland Chinese power manufacturers have caught up with international peers in R&D and response speed for the Rubin generation. We expect them to gain market share in 2026 as orders ramp up.
• Stock Performance: Delta Electronics and Lite-On Technology saw significant stock gains this week, reflecting investor confidence in the sector’s growth trajectory.

5.2 Liquid Cooling Adoption

• Domestic Demand: Major Chinese CSPs (Cloud Service Providers) are initiating procurement for liquid cooling components. For example, China Unicom’s ByteDance-customized project issued a tender for secondary side liquid cooling components (16MW, RMB 70 million budget).
• Pricing: Current domestic pricing is ~RMB 4,500/kW, lower than overseas markets. However, as chip power densities rise and import restrictions ease, prices are expected to increase.
• Company Performance:
  • Tongfei Shares: 2025 Net Profit forecast RMB 240-270 million (+56-75% YoY).
  • Jones Tech (Zhongshi): 2025 Net Profit forecast RMB 330-370 million (+64-84% YoY).
• Investment Logic: Chinese companies are rising in the global liquid cooling supply chain. We favor component suppliers entering overseas chains and overall solution providers benefiting from domestic CAPEX.
  • Focus: Kechuang Xinyuan, Shenling Environment, Yingweike, Tongfei Shares.

6. Hydrogen & Fuel Cells: Policy-Driven Industrial Decarbonization

6.1 "Zero-Carbon Factory" Guidelines

Five ministries, including MIIT and NDRC, issued guidelines for building zero-carbon factories. This policy explicitly positions hydrogen as a core infrastructure for industrial green transformation.
* Three Core Values of Hydrogen:
1. Deep Decarbonization Carrier: Essential for hard-to-abate sectors (steel, chemicals) where electrification is insufficient. Green hydrogen serves as a raw material (e.g., hydrogen metallurgy, green ammonia/methanol).
2. Grid Balancing & Storage: Enables "Power-to-Hydrogen" conversion, solving intermittency issues of renewables and providing seasonal storage.
3. Zero-Carbon Logistics: Hydrogen fuel cell vehicles (heavy trucks, forklifts) enable closed-loop "Green Power-Green Hydrogen-Green Transport" within industrial parks.

6.2 Investment Themes

1. Green Methanol: Supply shortage expected. With 300 methanol-fueled ships coming online in the next two years, demand for green methanol will reach 6.8 million tons, while current capacity is only in the hundreds of thousands of tons.
   • Focus: Goldwind, Jidian Shares, CIMC Enric, China Tianying.
2. Electrolyzers: Demand will surge in H2 2025 as green methanol/ammonia projects accelerate construction to match ship delivery timelines.
   • Focus: Huadian Kegong, Huaguang Energy, Shuangliang Eco-Energy.
3. Fuel Cell Vehicles: Toll exemptions on hydrogen highways in multiple provinces and the culmination of demonstration city cluster policies will boost vehicle sales.
   • Focus: SinoHytec, Guofu Hydrogen, Refire, Sinosynergy.

Risks / Headwinds

While the outlook is positive, investors must consider the following risks:

1. Policy Execution Risk: The renewable energy transition is heavily policy-dependent. Any delay or dilution in the implementation of the "15th Five-Year Plan," IRA provisions in the US, or EU green deals could dampen demand expectations. Specifically, the effectiveness of "Zero-Carbon Factory" incentives needs monitoring.
2. Intense Price Competition: Despite capacity clearing, the PV and Lithium sectors still face oversupply in certain segments. If price wars reignite, particularly in modules or battery cells, profitability recovery could be slower than anticipated.
3. Geopolitical Trade Barriers: The US and EU continue to erect trade barriers (tariffs, FEOC rules, local content requirements). While this drives localization, it also increases compliance costs and risks for Chinese exporters. Failure to successfully localize production could result in loss of market share.
4. Technological Iteration Uncertainty: The rapid shift in PV technology (TOPCon to HJT/Perovskite) and Battery chemistry (Liquid to Solid-State/Sodium) carries execution risk. Companies that fail to keep pace with technological transitions may face stranded assets.
5. Macro-Economic Slowdown: A broader global economic slowdown could reduce electricity demand growth, impacting the utilization rates of new renewable installations and industrial hydrogen projects.

Rating / Sector Outlook

We maintain an OVERWEIGHT rating on the New Energy and Power Equipment sector, with a specific preference for sub-sectors exhibiting clear technological moats and global demand visibility.

Investment View

1. Photovoltaics: Embrace the "New Cycle"

The PV sector is no longer just a story of capacity expansion; it is a story of technological supremacy and global supply chain realignment. The Musk catalyst has validated the long-term potential of solar in both terrestrial and extraterrestrial domains.
* Strategy: Focus on companies with technological leadership in HJT and Perovskite, and those with established overseas manufacturing to navigate trade barriers. The "balance sheet cleaning" in 2025 provides a safe entry point for long-term investors.
* Key Insight: The differentiation between "Space-ready" and "Ground-optimized" supply chains will create alpha. Companies that can serve both (e.g., flexible encapsulants, high-efficiency cells) will enjoy multiple valuation expansions.

2. Wind Power: The Export Alpha

The domestic market provides a stable floor, but the European offshore wind market offers the upside surprise. The supply gap in Europe is structural and cannot be filled by local manufacturers alone.
* Strategy: Invest in OEMs and component suppliers with proven localization strategies in Europe. Dajin Heavy Industry’s integrated logistics model is a unique competitive advantage that enhances margins and stickiness.
* Key Insight: Political risk is real, but economic necessity is stronger. Developers like Ørsted are pragmatic; they will source from China if it means achieving project IRR targets.

3. Grid: The "Pick-and-Shovel" Play for AI and Energy Transition

Grid infrastructure is the bottleneck for both renewable integration and AI data center expansion. The transformer shortage is a multi-year theme.
* Strategy: Prioritize companies with export capabilities and high-voltage technology. Domestically, the 15th Five-Year Plan ensures steady order flow. Solid-state transformers represent a high-growth optionality for AI-specific grids.
* Key Insight: The grid is becoming "smart" and "flexible." Companies involved in digital grid management and flexible DC transmission will see sustained growth beyond simple hardware sales.

4. Hydrogen: Early Stage, High Potential

The "Zero-Carbon Factory" policy is a seminal moment for hydrogen, moving it from a niche concept to an industrial imperative.
* Strategy: Focus on the upstream equipment (electrolyzers) and green methanol producers who can capitalize on the immediate supply-demand imbalance. Fuel cell vehicle stocks are a secondary play, dependent on infrastructure rollout.
* Key Insight: Green methanol is the "bridge fuel" for shipping and chemical industries. Its scarcity in the next 2-3 years creates a profitable window for early movers.

5. AIDC Power & Cooling: The AI Infrastructure Supercycle

AI is not just a software story; it is a hardware and energy story. The power and cooling requirements of next-gen GPUs are reshaping the data center supply chain.
* Strategy: Invest in liquid cooling solution providers and high-end power supply manufacturers that are qualifying with major CSPs and GPU makers. The transition to 800V and liquid cooling is inevitable and imminent.
* Key Insight: Chinese suppliers are becoming globally competitive in this niche. The verification cycle is ending, and 2026 will be the year of order realization.

Conclusion

The New Energy sector is entering a phase of quality-driven growth. The era of blind capacity expansion is over, replaced by a focus on technological innovation, global localization, and integration with new demand sources (AI, Space, Green Industry). Investors should position themselves in companies with strong balance sheets, clear technological moats, and successful internationalization strategies. The "Heaven and Earth Resonance" in PV, combined with the steady progress in Wind, Grid, and Hydrogen, offers a diversified and compelling investment landscape for 2026.

Appendix: Detailed Data and Price Trends

Photovoltaic Supply Chain Prices (Week of Jan 21, 2026)

Source: PVInfoLink, Silicon Industry Branch, Guojin Securities Institute

Lithium Battery Material Prices (Week of Jan 22, 2026)

Source: Baiinfo, Guojin Securities Institute

Key Company Financial Forecasts (Selected)

Note: Forecasts for some companies are based on analyst consensus and report estimates.

Disclaimer

This report is prepared by Guojin Securities Co., Ltd. for institutional investors only. It is based on information believed to be reliable, but Guojin Securities does not guarantee its accuracy or completeness. The views expressed are those of the analysts at the time of writing and are subject to change without notice. This report does not constitute an offer or solicitation to buy or sell any securities. Investors should conduct their own independent research and consult with professional advisors before making investment decisions. Guojin Securities and its affiliates may hold positions in the securities mentioned in this report.

Risk Rating: C3 and above investors only.

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