Power Equipment Industry Weekly Tracker: Export Tax Rebate Adjustments & The Long-Term Promise of Space-Based PV

Date: January 12, 2026
Analysts: Zeng Duohong (S0600516080001), Ruan Qiaoyan (S0600517120002)
Source: Dongwu Securities Research Institute

Executive Summary

The Power Equipment sector demonstrated robust momentum during the week of January 5–9, 2026, outperforming the broader market. The CSI Electrical Equipment Index rose 5.02%, driven primarily by strong performances in Wind Power (+22.06%) and Power Generation Equipment (+18.04%). This rally was underpinned by a confluence of policy shifts, supply-side discipline, and accelerating demand in key sub-sectors.

Key Macro and Policy Drivers:
1. Export Tax Rebate Adjustments: The Ministry of Finance announced that effective April 1, 2026, the VAT export rebate rate for battery products will be reduced from 9% to 6%, with a complete cancellation scheduled for January 1, 2027. Similarly, export rebates for photovoltaic (PV) products will be cancelled starting April 1, 2026. While this introduces short-term cost pressures, it is expected to accelerate industry consolidation, eliminate low-efficiency capacity, and strengthen the pricing power of leading manufacturers who can pass through costs or optimize global supply chains.
2. Solid-State Battery Breakthroughs: The sector witnessed significant technological milestones, including the unveiling of the world’s first mass-producible all-solid-state battery at CES 2026 (by Donut Lab) and the rollout of electric Atlas robots by Boston Dynamics. Domestic players like BYD and Gotion High-Tech have already下线 (rolled off the line) 60Ah vehicle-grade solid-state cells, ahead of schedule.
3. Storage Demand Supercycle: Global energy storage demand is exceeding expectations. In the US, large-scale storage installations are projected to grow by over 60% in 2025, driven by AI data center power needs and the "Big and Beautiful" Act incentives. In China, independent storage economics are improving, with 2025 domestic installations revised upward to 150 GWh (+35% YoY).

Investment Stance: We maintain an "Overweight" rating on the sector. The investment narrative is shifting from pure volume growth to quality-driven profitability, supported by supply-side reforms and technological moats. We recommend focusing on:
* Energy Storage: Leaders benefiting from global demand surges (US/Europe/Middle East).
* Lithium Batteries & Materials: Companies with pricing power amidst rising lithium carbonate prices and solid-state battery commercialization.
* Humanoid Robots: The "Year 1" of mass production (2025-2026), with Tesla’s Gen3 launch imminent.
* Grid Equipment: Beneficiaries of increased State Grid investment and overseas transformer demand.

Key Takeaways

1. Market Performance & Sector Rotation

• Weekly Returns (Jan 5-9, 2026):
  • Wind Power: +22.06% (Top performer, driven by offshore wind optimism and bidding price stabilization).
  • Power Generation Equipment: +18.04%.
  • Nuclear Power: +10.25%.
  • Lithium Batteries: +5.05%.
  • Electrical Equipment: +5.02%.
  • New Energy Vehicles (NEV): +2.77%.
  • Photovoltaics (PV): +2.09%.
• Top Gainers: Goldwind Science & Technology, Taisheng Wind Power, Hongxun Technology, Heshun Electric, Tianlong Optoelectronics.
• Top Decliners: *ST Zhongli, Yahua Group, Eging Photovoltaic, New Step, Foshan Plastics.

2. Energy Storage: Global Demand Acceleration

• United States:
  • Data: November 2025 large-scale storage additions reached 1,009 MW / 2,378 MWh (+82% / -40% MoM). Cumulative Jan-Nov 2025 installations hit 11,701 MW / 34.2 GWh (+41% / +43% YoY).
  • Outlook: 2025 large-scale storage growth is projected at >60%. AI-driven data center demand is a new catalyst, contributing an estimated 37 GWh to the 80 GWh total projected for 2026 (+51% YoY). Despite local content requirements, Chinese supply chains remain critical due to limited domestic cell capacity.
• Europe:
  • Germany: December large-scale storage installations dipped to 151 MWh (-29% YoY), but full-year 2025 cumulative installations reached 1,122 MWh (+92% YoY). Residential storage declined, but commercial & industrial (C&I) storage showed sequential improvement.
  • UK & Australia: UK Q3 grid-connected large storage surged +830% YoY. Australia’s Q3 additions hit a record 0.54 GW / 1.8 GWh, with 2025 total grid connections expected to reach 4.5-5 GWh (+150% YoY).
• China:
  • Policy: Five ministries issued guidelines for "Industrial Green Microgrids," mandating >60% local consumption of new wind/solar via integrated storage.
  • Tenders: December 2025 storage EPC tenders totaled 37.49 GWh (+118% MoM), indicating strong year-end rush and robust 2026 pipeline. Independent storage is becoming the dominant model, replacing mandatory paired storage.

3. Lithium Batteries & EVs: Price Recovery & Solid-State Progress

• EV Sales Trends:
  • China: December 2025 NEV passenger car wholesale sales were 1.56 million units (+3% YoY, -8% MoM). Full-year 2025 sales reached 15.32 million units (+25% YoY).
  • Europe: Nine major European markets sold 329,000 EVs in December (+41% YoY), with penetration reaching 36.3%. Full-year 2025 sales grew 33% to 2.94 million units.
  • US: Post-subsidy withdrawal in Oct 2025, sales faced headwinds. However, long-term electrification remains intact with <10% penetration.
• Battery Material Prices (Week of Jan 5-9):
  • Lithium Carbonate: Prices rebounded sharply. Battery-grade SMM average hit 140,000 RMB/ton (+1.1% WoW). Spot market sentiment is bullish due to upcoming supply cuts in Feb 2026.
  • Cathodes: LFP (Power) averaged 50,800 RMB/ton (+0.92%). Processing fees are negotiating upwards by ~1,000 RMB/ton.
  • Electrolyte: 6F (LiPF6) prices stabilized around 156,500 RMB/ton. Tinci Materials announced a 20-30 day maintenance shutdown for its 150k-ton line starting March 2026, tightening supply.
  • Solid-State Battery: Pilot lines are accelerating. BYD, Gotion, and FAW have produced 60Ah cells with 350-400 Wh/kg energy density. 2026 is seen as the critical year for pilot line validation and equipment iteration.
• Corporate Actions:
  • Huayou Cobalt: Forecasted 2025 Net Profit of 5.85-6.45 billion RMB (+40.8% to +55.2% YoY).
  • CATL & NIO: Signed a 5-year strategic cooperation agreement.
  • Putailai: Planning H-share listing in Hong Kong to fund globalization.

4. Photovoltaics: Supply Discipline & Price Hikes

• Policy Impact: Cancellation of PV export tax rebates (from April 1, 2026) aims to curb low-price dumping and encourage high-value exports.
• Price Trends:
  • Polysilicon: Prices rose to 60 RMB/kg (+9.09% WoW). Leading firms are holding prices firm, with new orders settling at 60-65 RMB/kg. Inventory reduction efforts are supporting prices.
  • Wafers: N-type 210R wafers held at 1.50 RMB/piece; N-type 210 at 1.70 RMB/piece.
  • Cells: Topcon 182mm cells rose to 0.42 RMB/W (+5.00%). Silver price hikes (>$19,000/kg) are pushing up costs, leading to reduced utilization rates in Jan-Feb.
  • Modules: Topcon module averages adjusted to 0.74 RMB/W. Overseas prices are higher (Europe ~$0.087/W; US Southeast Asia imports ~$0.27-0.28/W).
• Outlook: Q1 2026 is traditionally weak, but supply-side discipline (production cuts) is preventing price collapses. Leading firms are gaining market share as smaller players struggle with cash flow.

5. Wind Power: Offshore Wind Revival

• Bidding Activity: Weekly bids totaled 1.338 GW (all onshore). Monthly bids (Dec 2025) were 1.96 GW (-75% YoY), reflecting a lull before the 2026 offshore wind surge.
• Pricing: Onshore wind turbine bid averages stabilized around 1,393 RMB/kW (ex-tower) and 2,246 RMB/kW (with tower).
• Offshore Wind Outlook: 2025 domestic offshore wind installations are expected to exceed 8 GW. The "Three-Year Action Plan" is unlocking project approvals. European offshore wind is entering a sustained boom cycle.
• Key Projects: Goldwind’s 5.6MW turbines deployed in China’s first highway service area wind project. CR Power’s 408.75MW onshore project pre-won by CRRC Zhuzhou Institute.

6. Humanoid Robots: The "Year 1" of Mass Production

• Market Catalysts:
  • Tesla: Gen3 robot expected in Q1 2026. Long-term target: 1 million units by 2030.
  • Boston Dynamics: Unveiled electric Atlas at CES 2026, signaling industry shift to electric actuation.
  • Agibot (Zhiyuan): Ranked #1 globally in humanoid robot shipments in 2025 (Omdia data).
• Investment Logic: The sector is in the "0-to-1" phase, analogous to EVs in 2014. Valuation is currently based on a conservative 1 million unit assumption, leaving significant upside for the 100 million unit long-term TAM.
• Key Components: Focus on actuators (Sanhua Intelligent, Tuopu Group), reducers (Green Harmonic), screws (Beite Tech), and sensors (Lei Sai Intelligent).

7. Grid & Industrial Control: Steady Growth

• Grid Investment: State Grid Corporation of China (SGCC) emphasized expanding investment to support domestic demand. 2026 grid investment is projected to exceed 700 billion RMB (+5-10% YoY).
• Tenders: SGCC’s 6th batch of tenders showed strong growth: Transformers (+110%), GIS (+52%), and Protection Relays (+117%).
• Industrial Automation: December 2025 Manufacturing PMI returned to expansion at 50.1% (+0.9 ppt MoM). Lithium battery and packaging machinery sectors are recovering fastest.

Risks / Headwinds

1. Policy Implementation Risk: The impact of export tax rebate cancellations on margins depends on companies' ability to pass costs to overseas customers. If global demand softens simultaneously, margin compression could occur.
2. Price Competition: Despite supply discipline, the PV and lithium sectors still face overcapacity risks. Aggressive price wars could resume if demand growth misses expectations.
3. Geopolitical Tensions: Trade barriers (e.g., US tariffs, EU anti-subsidy investigations) could hinder the export growth of Chinese batteries, PV modules, and grid equipment.
4. Investment Slowdown: A decline in domestic grid or renewable energy investment增速 (growth rate) would directly impact order books for equipment suppliers.
5. Technology Adoption Delays: Solid-state batteries and humanoid robots face technical hurdles. Delays in mass production or cost reduction could dampen investor enthusiasm.

Rating / Sector Outlook

Overall Rating: Overweight (Maintained)

We believe the Power Equipment sector is transitioning from a phase of chaotic expansion to one of structured growth and profitability recovery. The removal of inefficient capacity via policy tools (tax rebates) and market forces (bankruptcy/consolidation) benefits industry leaders.

Sub-Sector Ratings:
* Energy Storage: Overweight. Strongest visibility for growth, driven by AI power needs and grid stability requirements globally.
* Lithium Batteries: Overweight. Price bottoming out, demand resilient, and solid-state optionality provides valuation upside.
* Humanoid Robots: Overweight. High beta, high growth potential. Early-stage investment opportunity in supply chain leaders.
* Wind Power: Neutral to Overweight. Onshore is stable; Offshore offers higher elasticity in 2026-2027.
* Photovoltaics: Neutral. Supply-side reform is positive, but demand growth is slowing. Focus on technology leaders (BC, HJT) and integrated giants.
* Grid Equipment: Overweight. Defensive growth with strong overseas export opportunities (transformers, HVDC).

Investment View

We recommend a barbell strategy: combining high-certainty earnings growth from established leaders with high-upside optionality from emerging technologies (Solid-State, Humanoid Robots).

Top Picks & Core Logic

Detailed Sub-Sector Recommendations

1. Energy Storage: The High-Growth Engine

• Logic: The convergence of AI power demand, renewable intermittency, and policy support (US IRA, China’s market mechanisms) creates a multi-year supercycle.
• Top Picks: Sungrow, Deye Shares (Emerging markets residential/storage), GoodWe (Inverter recovery), Hailiang Chuang (Domestic large storage leader).
• Watch: Shenghong Shares (PCS & Overseas expansion), Jinpan Technology (Dry-type transformers for AIDC).

2. Lithium Batteries & Materials: Profitability Repair

• Logic: Lithium carbonate prices have stabilized/risen, allowing material processors to restore margins. Solid-state battery developments offer a re-rating opportunity.
• Top Picks: CATL, BYD (Vertical integration), EVE Energy.
• Materials: Tinci Materials (Electrolyte), Hunan Yuneng (LFP Cathode), Shanghai Putailai (Anode/Separator), Enjie Shares (Separator), Ganfeng Lithium (Resource security).
• Solid-State Theme: Shanghai Washba (Solid-state layout), Xiamen Tungsten New Energy (Sulfide electrolyte potential), Nakoruru (Dry process equipment).

3. Humanoid Robots: The Next Disruptive Tech

• Logic: 2025-2026 is the inflection point for mass production. Tesla’s supply chain offers the highest certainty.
• Top Picks: Sanhua Intelligent (Actuators), Tuopu Group (Actuators/Assembly), Green Harmonic (Reducers), Beite Technology (Screws), Lei Sai Intelligent (Servo/Control).
• Watch: Zhao Wei Machinery (Micro-drives for dexterous hands), Manshite (Grinding heads/Solid-state).

4. Photovoltaics: Selective Opportunities

• Logic: Industry consolidation is clearing the field. Focus on companies with technological advantages (BC, HJT) and strong balance sheets.
• Top Picks: LONGi Green Energy (BC technology leader), Jinko Solar (TOPCon leader), Aiko Solar (ABC technology).
• Inverters: Sungrow, Ginlong Technologies (Solis), Hoymiles (Micro-inverters).
• Space PV Theme: Junda Shares (Investing in Shangyi for space PV), Mingyang Smart Energy (Conceptual exposure).

5. Wind Power: Offshore Revival

• Logic: Domestic offshore wind is accelerating after a delay. European offshore wind offers high-margin export opportunities.
• Top Picks: Mingyang Smart Energy (Offshore turbine leader), Dajin Heavy Industry (Tower/Export), Orient Cable (Subsea cable monopoly-like position).
• Watch: Taisheng Wind Power, Titan Wind Energy.

6. Grid & Industrial Control: Stability & Export

• Logic: Grid modernization is a global trend. Chinese transformers and HVDC equipment are competitive globally.
• Top Picks: Sieyuan Electric (Overseas expansion), Pinggao Electric (UHV/GIS), Xu Ji Electric (HVDC/Secondary), Huichuan Technology (Industrial automation leader).
• AIDC Power: Mcgmitt (800V Panama power supply for Nvidia/AI), Youyou Green Energy (Charging modules/AIDC).

Valuation Snapshot (Selected Companies)

(Note: PE ratios based on 2025E EPS as provided in the source report. Prices as of Jan 9, 2026.)

Conclusion

The Power Equipment sector stands at a pivotal juncture. While short-term volatility may persist due to policy adjustments (tax rebates) and seasonal demand fluctuations, the long-term structural trends—electrification, energy storage, and intelligent automation—remain intact. Investors should prioritize companies with technological moats, global market access, and strong balance sheets capable of navigating the transition. The emergence of solid-state batteries and humanoid robots adds a layer of exciting growth optionality to the traditional power infrastructure narrative.

Disclaimer: This report is for institutional investors only. It does not constitute investment advice. Market risks exist; please invest cautiously.