Power Equipment & New Energy Sector Weekly Report

Date: January 25, 2026
Rating: Outperform (Stronger than Market)
Analysts: Jiaxiong Wu (S1300523070001), Zhen Gu (S1300525040003)
Source: BOCI China Securities

Executive Summary

The Power Equipment and New Energy sector demonstrated robust resilience and upward momentum in the third week of January 2026, outperforming the broader market indices. The sector index rose by 3.57%, driven primarily by strong performances in Wind Power (+7.78%) and Power Generation Equipment (+6.54%). This weekly report analyzes the critical developments across five key sub-sectors: New Energy Vehicles (NEV), Photovoltaics (PV), Energy Storage, Wind Power, and Emerging Technologies (Hydrogen/Nuclear Fusion).

Key Macro Themes:
1. Supply-Demand Rebalancing in PV: The industry continues to navigate a phase of "anti-involution" (rationalization of competition). While upstream silicon prices remain under pressure due to inventory overhangs, mid-stream module prices are showing signs of stabilization and slight increases, driven by rising silver costs and high-power product demand. The announcement by Elon Musk regarding a massive expansion of solar manufacturing capacity in the US (200GW/year target) underscores the long-term global demand trajectory, potentially benefiting Chinese equipment and material exporters.
2. Lithium Price Surge & Cost Transmission: Lithium carbonate prices have surged, with futures breaking the RMB 180,000/ton threshold. This sharp increase is reshaping the cost structure for battery manufacturers. The key investment logic now shifts to the ability of battery and cathode material producers to transmit these costs downstream. Solid-state battery technology is entering a critical engineering validation phase, with Geely announcing imminent pack下线 (offline) and vehicle verification in 2026.
3. Policy-Driven Demand in Wind & Storage: Government commitments, including Premier Li Qiang’s pledge to add 10GW each of wind and solar capacity within SCO cooperation frameworks, provide a clear visibility floor for wind power demand. In energy storage, the sector remains highly prosperous, with 2025 seeing a 52% YoY growth in power scale. However, the adjustment of export tax rebates (reducing from 9% to 6%, then to 0%) is accelerating shipment rhythms in the short term ("rush to export") while forcing a long-term shift from price-based to quality/service-based competition.
4. Earnings Divergence: The 2025 earnings preview season reveals a stark divergence. While integrated PV giants (Longi, Tongwei, Jinko) face significant losses due to historical inventory write-downs and price wars, specialized equipment makers (Putailai) and wind tower manufacturers (Dajin Heavy Industry) are reporting substantial profit growth, highlighting the value of niche dominance and technological moats.

We maintain our "Outperform" rating on the sector. We recommend investors focus on companies with strong pricing power, technological leadership in solid-state batteries and high-efficiency PV cells (BC/HJT), and beneficiaries of the global wind power expansion.

Key Takeaways

1. Market Performance & Sentiment

• Sector Outperformance: The Power Equipment and New Energy index rose 3.57% for the week, significantly outpacing the Shanghai Composite Index (+0.84%) and the Shenzhen Component Index (+1.11%). The ChiNext Index declined slightly (-0.34%), indicating a rotation of capital into specific industrial themes rather than broad growth stocks.
• Sub-Sector Leadership:
  • Wind Power: +7.78% (Top performer, driven by policy catalysts and overseas order expectations).
  • Power Generation Equipment: +6.54%.
  • Nuclear Power: +4.16%.
  • Lithium Batteries: +3.78%.
  • NEV: +2.96%.
  • Photovoltaics: +2.55%.
  • Industrial Automation: +2.29%.
• Stock Movers:
  • Top Gainers: Liancheng Numerical Control (+48.54%), Aotewei (+38.90%), Maxwell Technologies (Maiwei) (+36.29%), Hanlan Cable (+36.24%), DKEM (Dike) (+31.83%). These gains reflect strong sentiment towards PV equipment and grid infrastructure.
  • Top Decliners: Huaguang Energy (-10.69%), Jingshan Light Machine (-9.96%), Taiyong Changzheng (-9.68%).

2. New Energy Vehicles (NEV) & Power Batteries

2.1 Sales Trends: Resilient Growth Amidst Seasonality

• January 2026 Preview: According to the China Passenger Car Association (CPCA), retail sales of narrow-sense passenger vehicles in January are estimated at 1.8 million units, a month-on-month decrease of 20.4% (typical seasonal adjustment pre-Chinese New Year) but flat to slightly up year-on-year.
• NEV Penetration: NEV retail sales are projected to reach 800,000 units, maintaining a high penetration rate of 44.4%. This confirms that NEVs have moved beyond early adoption into mainstream dominance, with demand remaining robust despite macroeconomic headwinds.
• 2025 Full Year Context: CAAM data shows 2025 NEV production and sales reached 16.626 million and 16.49 million units respectively, representing YoY growth of 29.0% and 28.2%. This strong base supports continued volume growth in 2026.

2.2 Battery Materials: The Lithium Surge

• Price Dynamics: Lithium carbonate prices have experienced a violent upward correction.
  • Futures: On January 23, the main contract on the Guangzhou Futures Exchange surged past RMB 180,000/ton.
  • Spot Prices: Battery-grade lithium carbonate averaged RMB 151,000/ton (up ~28.6% recently), while spodumene concentrate (SC6) CIF prices rose to $1,955/ton (up 28.2%).
• Drivers of the Rally:
  1. Supply Constraints: Rumors regarding mining license changes for Jiangxi mica mines suggest a delay in supply recovery. Even if licenses are granted, safety checks and ramp-up times create a lag in physical supply.
  2. Demand "Off-Season Not Weak": While EV demand is seasonally softer, energy storage demand remains high, providing a floor for lithium consumption.
  3. Financial Speculation: Futures market funds are driving volatility, with prices oscillating widely.
  4. Export Policy: The upcoming reduction in export tax rebates has triggered a "rush to export," pulling forward demand for batteries and materials in Q1 2026.
• Investment Implication: The rapid rise in lithium prices tests the cost-pass-through capabilities of battery makers. Cathode material prices (NCM523, NCM811) have risen in tandem. Investors should monitor margins of battery integrators; those with long-term contracts and pricing linkage mechanisms will fare better.

2.3 Technology Frontier: Solid-State Batteries

• Geely’s Milestone: Geely Holding announced that its self-developed all-solid-state battery pack will complete its first offline production and begin vehicle verification in 2026.
• Significance: This marks the transition from lab-scale R&D to engineering validation. The commercialization timeline is accelerating.
• Focus Areas: Attention should shift to suppliers of specialized solid-state electrolytes, lithium metal anodes, and high-precision coating equipment. Companies involved in the verification process stand to gain early mover advantages.

3. Photovoltaics (PV): Navigating the "Anti-Involution" Phase

3.1 Strategic Shift: From Price War to Value Competition

• Core Thesis: We maintain that "anti-involution" (industry self-discipline to stop destructive price wars) is the primary investment theme. The industry is undergoing a painful but necessary clearing process.
• Elon Musk’s Catalyst: At the Davos World Economic Forum, Elon Musk stated that SpaceX and Tesla aim to achieve a combined annual solar manufacturing capacity of 200GW in the US within three years.
  • Interpretation: This massive capacity target validates the long-term global demand for solar. For Chinese manufacturers, this implies sustained demand for core equipment (crystallization, slicing, cell processing) and materials, even if final module assembly shifts locally in the US. It reinforces the competitiveness of Chinese PV supply chains.

3.2 Supply Chain Price Analysis

• Silver Price Impact: Silver prices have surged (see Auxiliaries section), significantly increasing the non-silicon cost of cells and modules. This is a critical driver for the recent price hikes in cells and modules. Manufacturers are accelerating the adoption of base metal alternatives (copper plating, etc.) to mitigate this, which favors equipment vendors specializing in metallization technologies.
• High-Power Modules: Domestic demand is shifting towards high-power modules. This trend aids market clearing by differentiating products based on efficiency rather than just price. Module manufacturers have strong incentives to raise prices to restore profitability.

3.3 Recommended Sub-Sectors

• Encapsulant Films (Colloid): Benefiting from stable demand and potential price adjustments.
• Polysilicon: Leaders with cost advantages will survive the consolidation.
• Cells & Modules: Focus on companies with strong brand channels and high-efficiency tech (TOPCon, HJT, BC).
• Perovskite & BC (Back Contact): These next-gen technologies offer higher efficiency ceilings and are less susceptible to homogeneous competition.

4. Energy Storage: High Prosperity & Policy Headwinds

4.1 Market Scale & Growth

• 2025 Performance: According to CNESA, China’s newly installed new energy storage capacity in 2025 was 66.43GW / 189.48GWh, representing YoY growth of 52% (power) and 73% (energy). This confirms the sector’s high-growth trajectory.
• Current Demand: Demand remains robust, particularly for large-scale storage (Big Storage).

4.2 Price Trends & Cost Transmission

• Cell Prices: Rising due to lithium costs.
  • 280Ah LFP Cell: Avg RMB 0.343/Wh (up RMB 0.023/Wh).
  • 314Ah LFP Cell: Avg RMB 0.343/Wh.
• System Prices:
  • DC Side Liquid Cooling (2h): Avg RMB 0.46/Wh.
  • AC Side Liquid Cooling (2h): Avg RMB 0.53/Wh.
• Margin Pressure: System integrators are facing cost pressures from cells but cannot fully pass them on due to competitive bidding. However, bidding rules are tightening, emphasizing quality, safety, and performance over lowest price, which benefits top-tier integrators.

4.3 Export Tax Rebate Adjustment

• Policy Change: Effective April 1, 2026, the VAT export rebate for battery products will drop from 9% to 6%. From Jan 1, 2027, it will be cancelled entirely.
• Short-Term Impact: "Rush to Export." Overseas clients are locking in orders and accelerating shipments before the rebate reduction, boosting Q1 2026 exports.
• Long-Term Impact: Elimination of the "tax arbitrage" model. Companies must compete on technology, reliability, and service rather than just low prices. This will accelerate industry consolidation, favoring leading firms with global service networks and brand recognition.

5. Wind Power: Policy Support & Offshore Potential

5.1 Policy Catalyst

• SCO Cooperation: Premier Li Qiang announced China’s willingness to work with SCO members to add 10GW of new wind power and 10GW of solar power projects over the next 5 years. This provides a clear, government-backed demand pipeline for wind turbine manufacturers and EPC contractors.

5.2 Investment Focus

• Wind Turbines: Beneficiaries of domestic and international project awards.
• Offshore Wind: Higher growth potential due to resource availability and policy support for deep-sea projects.
• Components: Tower manufacturers (e.g., Dajin Heavy Industry) are seeing strong earnings growth due to export demand and raw material cost management.

6. Emerging Technologies: Hydrogen & Nuclear Fusion

6.1 Hydrogen Energy

• Policy Support: Five ministries, including MIIT, issued guidelines for "Zero-Carbon Factory" construction, promoting green hydrogen use.
• Industry Stage: Green hydrogen coupling with coal chemical industries and green methanol production is in the early importation phase.
• Investment Logic: As the "Green Electricity -> Green Hydrogen -> Green Fuel" chain matures, green fuels may enjoy a premium in the early stages. Focus on hydrogen equipment manufacturers and green fuel operators.

6.2 Nuclear Fusion

• Global Acceleration: South Korea announced it will accelerate its fusion energy commercialization, moving the DEMO reactor target from the 2050s to the 2030s.
• Long-Term Catalyst: While commercialization is distant, the acceleration in R&D spending creates immediate opportunities for suppliers of fusion power supplies, superconducting magnets, and specialized materials. This is a long-term thematic play with high optionality.

Detailed Market Data Analysis

A. Lithium Battery Material Prices (Weekly Change)

The following table highlights the significant upward pressure on key battery materials, particularly lithium salts and cathodes.

Source: Xinluo Lithium, BOCI China Securities

Analysis: The divergence between Lithium Carbonate (surging) and LiPF6 (falling) indicates that the bottleneck is strictly in the lithium resource extraction/refining stage, not in chemical processing. This benefits upstream lithium miners and refiners in the short term but squeezes mid-stream chemical processors unless they have integrated supply chains.

B. Photovoltaic Supply Chain Prices

The PV chain is experiencing a complex dynamic: upstream weakness vs. mid-stream cost-push inflation.

Source: InfoLink Consulting, BOCI China Securities

Key Insight: The 5% weekly increase in cell prices is significant. It signals that the "price war" bottom may have passed for cells, as manufacturers refuse to sell below cash cost + silver. This is a positive signal for margin recovery in Q2 2026 if demand holds.

C. Auxiliary Material Prices (PV)

Silver prices are the standout story here, directly impacting PV manufacturing economics.

Source: Sobey Consulting, BOCI China Securities

Strategic Implication: The 14% jump in silver paste costs is unsustainable for module margins at current prices. This validates the thesis that module prices MUST rise or technology must shift (to lower silver consumption techniques like 0BB, copper plating, or LECO). Equipment vendors offering silver-saving solutions are highly attractive.

D. Energy Storage Prices

Source: InfoLink Consulting, BOCI China Securities

Analysis: Cell prices are rising faster than system prices. This compresses integrator margins in the short term. However, the "rush to export" before the tax rebate cut supports volume. Integrators with strong overseas channels and ability to lock in raw material prices will outperform.

Corporate Developments & Earnings Previews

The 2025 earnings preview season highlights a bifurcation in the industry. Integrated PV players are burdened by asset impairments and historical low-price contracts, while specialized equipment and wind component makers are thriving.

1. Significant Profit Growth (Positive Surprises)

• Dajin Heavy Industry (002487.SZ):

  • Forecast: Net Profit attributable to shareholders: RMB 1.05 - 1.20 billion.
  • YoY Growth: +121.58% to +153.23%.
  • Driver: Strong overseas wind tower orders, favorable raw material costs, and expanded production capacity. This confirms the robustness of the global wind power supply chain.
  • Valuation: P/E (2025E) approx. 37x. Rated Buy.

• Putailai (603659.SH):

  • Forecast: Net Profit: RMB 2.3 - 2.4 billion.
  • YoY Growth: +93.18% to +101.58%.
  • Driver: As a leader in anode materials and coating equipment, Putailai benefits from stable demand and technological premiums. Its diversified business model (material + equipment) provides resilience.
  • Valuation: P/E (2025E) approx. 26x. Rated Overweight.

• Penghui Energy (300438.SZ):

  • Forecast: Net Profit: RMB 170 - 230 million.
  • Status: Turnaround from Loss.
  • Driver: Improved operational efficiency and recovery in the consumer battery and small storage segments.

• Hongyuan Green Energy (603185.SH):

  • Forecast: Net Profit: RMB 180 - 250 million.
  • Status: Profitable after previous losses.
  • Driver: Cost control improvements and stabilization in polysilicon/monocrystalline silicon prices.

2. Significant Losses (Negative Surprises / Cleaning House)

• Tongwei Co., Ltd. (600438.SH):

  • Forecast: Net Loss: RMB 9.0 - 10.0 billion.
  • Context: Despite being a cost leader in polysilicon and cells, the sheer magnitude of price declines in 2025 and inventory write-downs have resulted in substantial losses. This reflects the severity of the industry downturn.
  • Outlook: The loss may mark the "bottom" of the cycle. As weaker competitors exit, Tongwei’s scale advantage will reassert itself in 2026-2027. Rated Overweight.

• Jinko Solar (688223.SH):

  • Forecast: Net Loss: RMB 5.9 - 6.9 billion.
  • Context: Similar to Tongwei, impacted by module price collapses and asset impairments. However, Jinko remains a top-tier module shipper globally. The loss is a financial accounting reflection of past market conditions, not necessarily a loss of market share. Rated Overweight.

• LONGi Green Energy (601012.SH):

  • Forecast: Net Loss: RMB 6.0 - 6.5 billion.
  • Context: LONGi has been slower to adopt TOPCon compared to peers, leading to market share erosion and impairment of older PERC assets. The company is pivoting to BC (Back Contact) technology. The loss is part of its strategic restructuring. Rated Buy (based on long-term tech leadership potential).

• Aiko Solar (600732.SH):

  • Forecast: Net Loss: RMB 1.2 - 1.9 billion.
  • Context: Impacted by the general PV downturn. However, Aiko is a leader in ABC (All Back Contact) technology. If BC technology gains traction, Aiko is well-positioned for a rebound. Rated Overweight.

• Haiyou New Material (688680.SH):

  • Forecast: Net Loss: RMB 440 - 520 million.
  • Context: Encapsulant film maker. Squeezed by raw material costs and intense competition. The sector is consolidating. Rated Overweight (cautious).

3. Strategic M&A

• Mingyang Smart Energy (601615.SH):
  • Action: Plans to acquire 100% equity of Zhongshan Dehua Chip Technology Co., Ltd. via share issuance and cash payment.
  • Significance: This move indicates a vertical integration strategy into semiconductor/chip components, likely for wind turbine control systems or power electronics. It enhances Mingyang’s technological moat and supply chain security.

Risks / Headwinds

Investors must carefully weigh the following risks, which could derail the positive outlook:

1. Excessive Price Competition:

   • Despite "anti-involution" rhetoric, the PV and battery sectors still suffer from structural overcapacity. If demand growth in 2026 fails to absorb new capacity, price wars could reignite, eroding margins for all players except the absolute lowest-cost producers.
   • Monitoring: Watch utilization rates and cash costs of Tier-2 manufacturers.

2. International Trade Frictions:

   • US/EU Tariffs: The US Section 232 tariffs and potential new EU carbon border adjustments pose significant risks to Chinese exports. The "rush to export" before tax rebate cuts suggests companies are anticipating stricter trade barriers.
   • Impact: Could reduce export volumes and force localization of manufacturing, increasing CAPEX requirements for Chinese firms.

3. Slower-than-Expected Investment Growth:

   • Power grid investments and renewable energy installations are policy-driven. If government fiscal stimulus slows down or if grid connection bottlenecks persist (curtailment issues), the demand for wind and solar equipment could decline.
   • Monitoring: Monthly data on grid investment and renewable energy curtailment rates.

4. Policy Uncertainty:

   • Changes in subsidy policies, export tax rebates (already announced but implementation details matter), and green certification standards can abruptly alter market dynamics.
   • Specific Risk: The complete removal of export tax rebates in 2027 could make some low-margin export businesses unviable.

5. Raw Material Price Volatility:

   • Lithium: The current surge is volatile. A sudden crash in lithium prices (if supply floods back) would lead to inventory write-downs for battery makers. Conversely, sustained high prices hurt EV affordability.
   • Silver: High silver prices threaten PV economics. If silver prices remain elevated, it could slow down PV installation economics unless technology adapts quickly.

6. Technology Iteration Risk:

   • PV: The race between TOPCon, HJT, and BC is not over. A breakthrough in Perovskite or a rapid cost decline in HJT could render current TOPCon capacities obsolete sooner than expected.
   • Batteries: Solid-state batteries are advancing. If commercialization accelerates beyond 2028, current liquid electrolyte supply chains could face stranded asset risks.

Rating / Sector Outlook

Overall Sector Rating: Outperform (Stronger than Market)

We maintain our positive stance on the Power Equipment and New Energy sector. The rationale is based on:
1. Valuation Bottoming: Many leading companies are trading at historic low valuations, with 2025 losses already priced in. The bad news is largely reflected in current stock prices.
2. Policy Support: Domestic (SCO projects, Zero-Carbon Factories) and International (US IRA, EU Green Deal) policies continue to drive long-term demand.
3. Technological Alpha: Companies leading in solid-state batteries, BC/HJT cells, and offshore wind are creating new value pools that are less sensitive to commoditized price wars.
4. Supply Clearing: The ongoing losses of major players are accelerating the exit of inefficient capacity, paving the way for healthier margins in 2027-2028.

Sub-Sector Ratings & Recommendations

Investment View

1. Core Investment Logic: "Survival of the Fittest" & "Technological Moats"

The era of blind expansion in the new energy sector is over. The investment logic for 2026 shifts from Beta (sector-wide growth) to Alpha (individual company superiority).

• Look for Pricing Power: In a world of rising raw material costs (Lithium, Silver), companies that can pass these costs to customers without losing market share are rare and valuable. This includes brands with strong channel control (e.g., leading module makers) or unique technology (e.g., high-efficiency cells).
• Bet on Technology Disruption: Solid-state batteries and BC/HJT/Perovskite PV cells are not just incremental improvements; they are potential game-changers. Companies investing heavily in R&D and achieving pilot success (like Geely in batteries, Aiko/Longi in BC) will command premium valuations.
• Global Diversification: Companies with successful overseas manufacturing footprints (avoiding tariffs) and strong global service networks (for wind/storage) will capture higher margins than pure domestic players.

2. Strategic Allocation Suggestions

A. Overweight: Wind Power & Offshore Wind

• Rationale: The sector has seen less capacity oversupply compared to PV/Batteries. Policy catalysts (SCO, domestic offshore plans) are concrete. Earnings visibility is high for 2026.
• Top Pick: Dajin Heavy Industry. Strong earnings growth (+120%+), dominant position in export towers, benefiting from global wind boom.
• Top Pick: Mingyang Smart Energy. Leading offshore turbine technology, strategic M&A into chips enhances long-term competitiveness.

B. Overweight: PV Equipment & Next-Gen Tech

• Rationale: Regardless of which PV technology wins (TOPCon, HJT, BC, Perovskite), equipment makers sell the "shovels." They enjoy earlier revenue recognition and less exposure to end-product price wars.
• Top Pick: Maxwell Technologies (Maiwei). Leader in HJT equipment. As HJT gains share, Maiwei benefits.
• Top Pick: Aotewei. Strong in module automation and laser processing. Essential for high-efficiency module production.
• Thematic Play: Aiko Solar. High-risk, high-reward bet on BC technology. If BC becomes the mainstream premium product, Aiko’s valuation will re-rate significantly.

C. Neutral/Selective: Batteries & Materials

• Rationale: Lithium price volatility creates uncertainty. However, the solid-state narrative is compelling.
• Top Pick: Putailai. Diversified into anode materials and equipment. Strong earnings growth (+93%+) demonstrates resilience.
• Watch: CATL (though not explicitly rated in this report, it is the benchmark). Monitor its ability to maintain margins amidst lithium swings.
• Avoid: Pure-play lithium miners with high cost structures, as supply from Africa and South America will eventually flood the market, crashing prices post-2026.

D. Underweight/Avoid: Integrated PV Module Makers (Short Term)

• Rationale: Companies like Jinko, Longi, Tongwei are posting massive losses. While they are long-term survivors, the near-term financial pain and balance sheet repair will suppress stock performance. Wait for clear signs of margin recovery (Q3/Q4 2026) before adding significant positions. Use dips to accumulate only if you have a 3-5 year horizon.

3. Trading Strategy for Q1 2026

• Front-run the "Rush to Export": Buy energy storage and battery exporters in January/February to benefit from the Q1 shipment surge before the April tax rebate cut. Sell or reduce exposure in March/April as the effect fades.
• Monitor Lithium Futures: Use the Guangzhou Futures Exchange lithium contracts as a leading indicator for battery stock sentiment. A stabilization of lithium prices around RMB 150k-180k is healthy; a spike above 200k is negative for demand; a drop below 100k is negative for miner profits.
• Event-Driven Opportunities: Watch for further announcements on solid-state battery partnerships and SCO wind project tenders. These will provide short-term catalysts for related stocks.

4. Long-Term Structural Trends (2026-2030)

• Grid Flexibility is King: As renewable penetration increases, the value shifts from generation (PV/Wind) to flexibility (Storage, Hydrogen, Grid Automation). Invest in companies that enable grid stability.
• Green Hydrogen Coupling: The integration of green hydrogen with heavy industry (steel, chemicals) is the next big wave. Early movers in electrolyzer technology and green ammonia/methanol production will be the "Tesla" of the hydrogen age.
• Nuclear Fusion Optionality: While commercial power is decades away, the supply chain for fusion (superconductors, high-voltage power supplies) is investable today as a venture-capital-style play within public markets.

Appendix: Valuation Table of Mentioned Companies

Note: Share prices as of January 23, 2026. EPS and P/E based on 2025 Estimates where available.

Source: iFinD, BOCI China Securities. NR = No Rating. EPS estimates for NR companies are consensus estimates.

Valuation Commentary:
* Dajin Heavy Industry trades at a reasonable 37x 2025E P/E given its >120% growth, making it attractive.
* Putailai at 26x P/E with ~100% growth is undervalued relative to its growth rate (PEG < 0.3).
* PV Giants (Longi, Tongwei, Jinko) have negative P/E due to losses. Valuation must be based on Price-to-Book (PB) or normalized earnings in 2027. Their PB ratios (7-9x) are still relatively high, reflecting market expectation of eventual recovery and their asset-heavy nature.
* Aiko Solar has a high forward P/E (105x) because 2025E EPS is barely positive. This is a speculative valuation based on future BC technology dominance.

Conclusion

The Power Equipment and New Energy sector is at a pivotal inflection point. The painful consolidation of 2024-2025 is laying the groundwork for a healthier, more technologically advanced industry in 2026-2027. While short-term volatility in raw material prices and geopolitical tensions persist, the long-term demand drivers (decarbonization, energy security, technological innovation) remain intact.

Investors should adopt a barbell strategy:
1. Hold high-certainty winners in Wind Power and PV Equipment (Dajin, Putailai, Maiwei) that are delivering strong earnings today.
2. Accumulate long-term tech leaders in PV (Longi, Aiko) and Batteries (solid-state supply chain) at depressed valuations, preparing for the next cycle of growth.

Avoid chasing pure commodity plays (generic lithium miners, standard module assemblers) until supply-demand balances clearly improve. Focus on technology, cost leadership, and global reach.

Disclaimer:
This report is prepared by BOCI China Securities for institutional clients. It reflects the analysts' personal views and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Investors should conduct their own independent research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results. Risks include market volatility, policy changes, and technological disruptions.