Equity Research: Power Equipment & New Energy Sector Weekly

Date: January 19, 2026
Rating: Overweight (Maintained)
Analysts: Zeng Duohong, Ruan Qiaoyan
Source: Dongwu Securities Institute

Executive Summary

The Power Equipment sector demonstrated resilience this week (Jan 12–16, 2026), outperforming the broader market with a 0.79% gain. While wind power (-4.74%) and generation equipment (-4.15%) faced headwinds, Lithium Batteries (+1.5%) and New Energy Vehicles (+1.29%) led the rally. The investment landscape is currently defined by three pivotal themes: the accelerated industrialization of solid-state batteries, the robust global demand for energy storage systems (ESS), and the emerging commercial viability of humanoid robots.

We maintain an Overweight rating on the sector. Our core thesis rests on the inflection point in profitability for lithium battery materials driven by rising lithium carbonate prices, the structural growth of large-scale storage driven by AI data center demand and policy support, and the "0-to-1" breakthrough in humanoid robotics supply chains. Conversely, the photovoltaic (PV) sector remains in a consolidation phase, with price stabilization efforts underway but demand visibility limited to Q1 export rushes ahead of tax policy changes.

Key Market Moves:
* Lithium Carbonate Surge: Prices jumped ~13% week-on-week to ~RMB 158,000/ton, signaling a potential bottom and triggering inventory restocking.
* Solid-State Breakthroughs: Major OEMs (BYD, Gotion High-Tech) are advancing pilot lines, with mass production timelines accelerating into late 2025/early 2026.
* Robotics Partnerships: Foxconn’s strategic alliance with UBTECH and Star Era’s collaboration with SF Technology mark significant steps toward industrial mass production.

Key Takeaways

1. Lithium Batteries & EVs: Price Inflection and Solid-State Acceleration

Market Dynamics & Pricing:
The lithium sector is experiencing a notable shift from destocking to restocking, driven by expectations of export tax rebate adjustments and tight Q1 supply.
* Lithium Carbonate: Domestic battery-grade prices rose 12.9% WoW to RMB 158,000/ton. Industrial grade reached RMB 154,500/ton (+13.2%). The rapid price increase has triggered active buying from downstream battery manufacturers, who are securing supplies ahead of potential further hikes.
* Cathode Materials: LFP prices increased 9.3% to RMB 55,500/ton. Ternary (NCM) prices also rose, supported by upstream cost pass-through.
* Electrolyte & Separators: LiPF6 prices remained stable at ~RMB 155,000/ton. Separator prices showed slight increases for specialized grades, with some leading manufacturers raising contract prices by 15-20% YoY due to previous low-base effects.

Corporate Developments:
* CATL & Ronbay Technology: Signed a landmark LFP cathode supply agreement worth over RMB 120 billion (3.05 million tons) from 2026 to 2031. This underscores CATL’s confidence in long-term LFP demand despite its NCM leadership.
* Solid-State Battery (SSB) Progress: The industry is entering the critical engineering validation phase. BYD and Gotion High-Tech have unveiled 60Ah cell prototypes with energy densities of 350-400 Wh/kg. Equipment招标 (bidding) for GWh-level SSB lines is accelerating, benefiting sulfide electrolyte and specialized equipment suppliers.
* EV Sales Data: China’s NEV sales in 2025 reached 16.44 million units (+28% YoY), with exports surging 103% to 2.58 million units. However, Jan 2026 retail data shows a seasonal dip (-38% MoM), consistent with pre-holiday patterns. We expect a recovery in March 2026.

Investment Implication:
We see a clear profitability inflection for mid-stream material suppliers. The rise in lithium prices is being passed through, improving margins for converters. We recommend overweight positions in CATL, EVE Energy, and material leaders with pricing power such as Tinci Materials (electrolyte) and Hunan Yuneng (LFP).

2. Energy Storage (ESS): Global Demand Supercycle

Global Outlook:
Energy storage is the fastest-growing segment within the new energy sector, driven by grid stability needs and AI data center power requirements.
* China: 2025 new installations reached 58.6 GW / 175.3 GWh (+160% capacity YoY). Independent/grid-side storage now accounts for >70% of new installs, driven by improved capacity compensation mechanisms. We forecast 2026 domestic installations to grow 60%+ to ~260 GWh.
* USA: Q3 2025 installations hit 14.5 GWh (+38% YoY). Full-year 2025 installations exceeded 2024 levels. Driven by the "Inflation Reduction Act" (IRA) tailwinds and AI data center demand (estimated 37 GWh contribution in 2026), we project US large-scale storage to grow 60%+ in 2025 and 51% in 2026.
* Europe & Emerging Markets: European household storage inventory correction is complete, with shipments recovering. Large-scale projects in the Middle East and Latin America are accelerating. Trina Storage secured a 1.2 GWh deal in LatAm, reinforcing its top-5 regional position.

Policy & Projects:
* Ukraine: Accelerated imports of power equipment amid ongoing infrastructure rebuilding.
* China Policy: Four ministries emphasized government fund investment in storage. Jiangsu Virtual Power Plant pilots aim for >1 GW regulation capacity by 2027.

Investment Implication:
The sector is shifting from "policy-driven" to "economic-driven." We strongly recommend Sungrow (global inverter & integration leader), Sineng Electric, and battery integrators like Tesla Supply Chain beneficiaries. The surge in demand supports volume growth for Contemporary Amperex Technology Co. Limited (CATL) and EVE Energy.

3. Humanoid Robots: From Lab to Factory Floor

Industry Catalysts:
The humanoid robot sector is transitioning from concept to early commercialization ("0-to-1" phase), analogous to the EV sector in 2014.
* Strategic Partnerships:
* Foxconn & UBTECH: Foxconn will leverage its manufacturing prowess to support UBTECH’s mass production, targeting industrial applications by 2026.
* Star Era & SF Technology: Collaboration focuses on logistics scenarios (sorting, scanning), leveraging SF’s "Super Brain" platform.
* Tesla Optimus: Elon Musk released videos demonstrating advanced mobility, with Gen 3 expected in Q1 2026. Long-term target remains 1 million units by 2030.

Valuation Logic:
Current valuations reflect only a fraction of the potential market (estimated 100 million units long-term, >$15 trillion TAM). Assuming a conservative 1 million unit scale, component suppliers are trading at reasonable multiples (10-15x P/E on robot-specific profits).

Investment Implication:
We maintain a Strong Buy on the Tesla supply chain and core component leaders:
* Actuators/Joints: Sanhua Intelligent Controls, Tuopu Group.
* Reducers/Harmonic Drives: Leaderdrive, Kedali.
* Screws/Linear Actuators: Beite Technology, Zhejiang Rongtai.
* Sensors: Aubot, Anpeilong.

4. Photovoltaics (PV): Consolidation and Price Stabilization

Supply Chain Prices:
The PV sector is undergoing a painful but necessary supply-side correction. Industry self-discipline and potential output cuts are stabilizing prices.
* Polysilicon: Prices held steady at RMB 60/kg. Futures dipped below RMB 50/kg, creating arbitrage opportunities, but spot market transactions remain limited as buyers await clarity on Q1 production cuts.
* Wafers: N-type 210R wafers at RMB 1.50/piece; 210N at RMB 1.70/piece. Prices are firming up due to anticipated export rush before tax rebate changes.
* Cells: TOPCon cells rose to RMB 0.40-0.42/W, driven by soaring silver prices (cost push).
* Modules: TOPCon module averages rose to RMB 0.71-0.80/W. Overseas prices adjusted to $0.089-0.10/W.

Demand & Trade:
* Export Rush: Anticipation of export tax rebate cancellations in April 2026 is driving a Q1 shipment surge.
* Installations: China added 21.99 GW in Nov 2025. Full-year 2025 installations are robust, but Q1 2026 domestic demand is weak due to seasonality and grid connection bottlenecks.

Investment Implication:
The sector is bottoming out. We favor companies with technological moats and overseas exposure. Longi Green Energy (BC technology ramp-up) and Jinko Solar (TOPCon leadership) are positioned to lead the recovery. Watch for margin improvement in Foster (film) and Flatt Glass.

5. Wind Power: Offshore Recovery and Tendering Slowdown

Tendering Data:
* Weekly: 1.8 GW onshore tenders; 0 GW offshore.
* Monthly: Total tenders down 63% YoY to 2.89 GW, reflecting a lull in project approvals.
* Prices: Onshore turbine bids averaged RMB 1,574/kW (excluding tower). Offshore bids remained high at RMB 2,549/kW.

Project Highlights:
* Goldwind’s 20MW Offshore Turbine: Successfully installed in Fujian, setting a global record for single-unit capacity and rotor diameter (300m). This demonstrates China’s technological leadership in offshore wind.
* UK AR7 Auction: 8.4 GW awarded, signaling strong European offshore demand.

Investment Implication:
Domestic offshore wind is poised for a rebound in 2025-2026 with the "Three-Year Action Plan." We recommend Oriental Cable (subsea cables, high barrier to entry) and Mingyang Smart Energy (offshore turbine leader with margin recovery potential).

6. Grid & Industrial Control: Resilient Growth

Grid Investment:
* State Grid Corporation of China (SGCC) is accelerating investment to support "New Infrastructure" and grid stability. 2025 grid investment grew 5.9% YoY.
* Tenders: Secondary equipment (protection/monitoring) saw a 60% YoY increase in tenders, driven by equipment renewal policies.
* UHV Projects: Multiple UHV DC/AC lines are under construction or approved (e.g., Shaanxi-Anhui, Gansu-Zhejiang), supporting long-term demand for transformers and switchgear.

Industrial Automation:
* PMI: December 2025 Manufacturing PMI was 50.1% (expansion territory), up 0.9 ppt MoM.
* Sector Performance: Lithium, packaging, and logistics automation showed strong recovery. General automation demand is weakly recovering, with leaders gaining market share.

Investment Implication:
Sieyuan Electric reported strong 2025 results (Net Profit +54% YoY), validating the overseas expansion thesis. Inovance Technology remains the dominant player in general automation with alpha growth from EV and robotics segments.

Risks / Headwinds

1. Policy Uncertainty: Changes in US trade policies (tariffs) or slower-than-expected implementation of Chinese stimulus measures could dampen demand for EVs and renewables.
2. Price Volatility: While lithium prices are rising, excessive volatility can disrupt supply chain planning. In PV, if price wars resume despite self-discipline, margins could remain compressed.
3. Geopolitical Tensions: Trade barriers in Europe and the US against Chinese green tech (EVs, batteries, solar) pose a risk to export-driven growth.
4. Technological Delays: Solid-state battery commercialization or humanoid robot mass production may face technical hurdles, delaying revenue realization for related suppliers.
5. Grid Connection Bottlenecks: Rapid growth in renewable installations may outpace grid infrastructure upgrades, leading to curtailment issues in key provinces.

Rating / Sector Outlook

Investment View & Top Picks

We recommend a barbell strategy: High-certainty leaders in batteries and grid equipment for stability, and high-growth themes in solid-state batteries and humanoid robots for alpha.

Top Recommendations

1. Energy Storage & Inverters

• Sungrow (300274.SZ): Global leader in inverters and ESS integration. Benefiting from US large-scale storage boom and AI data center power needs. Strong overseas channel advantage.
• Sineng Electric (300827.SZ): Leading PCS supplier with expanding overseas footprint.
• Trina Storage (Part of Trina Solar): Securing major GWh-level contracts in LatAm and Europe.

2. Lithium Batteries & Materials

• CATL (300750.SZ): Unmatched scale and technology leadership. The RMB 120B deal with Ronbay secures LFP supply. Valuation remains attractive relative to growth certainty.
• EVE Energy (300014.SZ): Strong momentum in both power and storage batteries. Diversified customer base reduces risk.
• Tinci Materials (002709.SZ): Electrolyte leader. Benefiting from LiPF6 price stability and potential elasticity as demand rises.
• Hunan Yuneng (301358.SZ): LFP cathode leader with tight supply-demand dynamics for high-end products.

3. Humanoid Robots & Automation

• Sanhua Intelligent Controls (002050.SZ): Core supplier for Tesla’s thermal management and robot actuators. High certainty in the T-chain.
• Kedali (002850.SZ): Global leader in battery structural parts, expanding into robot harmonic drives and assemblies.
• Inovance Technology (300124.SZ): Industrial automation leader with strong exposure to EVs and robotics. Alpha generator in a recovering macro environment.

4. Grid & Power Equipment

• Sieyuan Electric (002028.SZ): Outstanding 2025 performance. Dual engine of domestic grid investment and overseas transformer exports.
• Pinggao Electric (600312.SH): Leader in UHV switchgear. Low valuation with consistent earnings beats.
• Jinpan Technology (688676.SH): Global leader in dry-type transformers. Expanding into AIDC (AI Data Center) power solutions.

5. Photovoltaics (Selective)

• Longi Green Energy (601012.SH): BC technology ramp-up in 2026 could provide a competitive edge. Acquisition of Jingkong Energy adds storage exposure.
• Jinko Solar (688223.SH): TOPCon technology leader with robust overseas shipments.

6. Solid-State Battery Theme

• Shanghai Washba (603200.SH): Comprehensive layout in solid-state materials. Joint venture for sulfide lithium shows promise.
• Nakano Roll (300861.SZ): Leader in dry-process equipment, crucial for next-gen battery manufacturing.
• Dangsheng Technology (300073.SZ): Leading ternary cathode supplier with advanced solid-state electrolyte technology.

Financial Estimates & Valuation Snapshot

*Note: Sieyuan Electric price referenced from recent trading data; specific 2025E EPS to be updated per latest consensus.

Conclusion

The Power Equipment sector is navigating a complex but promising transition. The lithium battery sector is emerging from a downturn with price stabilization and new technological frontiers (solid-state). Energy storage is experiencing a structural boom driven by AI and grid modernization. Humanoid robots are moving from hype to hardware, offering a new long-term growth curve for precision manufacturing leaders. While PV faces short-term headwinds, the supply-side cleanup is laying the groundwork for a healthier market in 2026. We advise investors to focus on companies with technological moats, global market access, and exposure to high-growth niches like ESS and robotics.

Disclaimer: This report is for institutional investors only. It does not constitute investment advice. Market risks exist; please invest cautiously. Data sourced from Wind, SMM, PV InfoLink, and company announcements as of January 16, 2026.