Utilities & New Energy Sector Weekly: The Dawn of Space Photovoltaics – A New Frontier for HJT Technology

Date: January 11, 2026
Sector: Utilities / Power Equipment & New Energy
Rating: Overweight (Maintained)
Analysts: Zha Hao, Liu Xiaoning, Dai Yingxin, Deng Siping (Huayuan Securities)

Executive Summary

In this weekly report covering the first week of 2026, we maintain an Overweight rating on the Utilities and New Energy sector. While traditional energy metrics remain stable, the core investment narrative is shifting towards a high-growth intersection of commercial aerospace and photovoltaic (PV) technology. We identify "Space Photovoltaics" as a pivotal emerging theme for 2026, driven by the urgent strategic need for satellite network deployment and the technological evolution of power systems in orbit.

The commercial aerospace industry is currently at a critical inflection point, transitioning from policy-driven initiation to commercial scalability. With satellite frequency and orbital resources being scarce strategic assets governed by "first-come, first-served" principles, China is accelerating its layout to compete with established players like SpaceX. This acceleration creates a substantial demand for efficient, lightweight, and cost-effective power solutions in space.

Our analysis highlights that Heterojunction (HJT) technology, specifically P-type HJT, is poised to replace traditional multi-junction Gallium Arsenide (GaAs) cells as the dominant power source for low-earth orbit (LEO) satellites. This shift is not merely a substitution but a market-expanding event. The potential integration of space-based computing power (as projected by Musk’s 100GW annual deployment target by 2030) could expand the total addressable market (TAM) from the current billion-yuan scale to a potential trillion-yuan infrastructure market.

For investors, this thematic shift offers a dual benefit: it opens a new high-margin growth curve for PV manufacturers and helps alleviate the intense domestic competition ("involution") facing ground-based HJT production. We recommend focusing on equipment leaders and integrated energy companies positioned to capitalize on this aerospace-PV convergence.

Key Takeaways

1. Commercial Aerospace: At a Critical Commercialization Inflection Point

The global competition for space resources has intensified. Satellite frequency bands and orbital slots are finite, non-renewable strategic resources. Developed nations, particularly the United States, have secured significant advantages through early deployment and the operational scale of entities like SpaceX.

In response, China has elevated commercial aerospace to a key component of its "New Quality Productive Forces" strategy. Since late 2024 and throughout 2025, policy support has been dense and targeted, emphasizing the urgency of building independent satellite networks. This policy tailwind is translating into tangible launch schedules and supply chain mobilization.

• Strategic Imperative: The window for securing prime orbital slots is narrowing. The state-backed push ensures that capital and regulatory hurdles are being lowered for private and state-owned enterprises alike.
• Market Status: The industry is moving from R&D and pilot phases to规模化 (scale-up) commercial operations. This transition demands supply chains that can deliver high reliability at significantly lower costs than traditional aerospace standards.

2. Space Photovoltaics: The Energy Backbone of the Satellite Era

Power generation is the lifeline of any satellite. In the vacuum of space, solar photovoltaics remain the only viable, efficient, and long-term energy source. While current applications are largely confined to communication satellites, the horizon is expanding rapidly towards Space Computing and large-scale orbital data centers.

Market Size Estimation & Growth Trajectory

We have modeled the potential market size for space photovoltaics based on current launch projections and technical assumptions:

Note: This baseline estimate assumes the continuation of current communication satellite deployment rates using traditional or transitional technologies.

However, the upside potential is exponential. Elon Musk’s announcement of a plan to deploy 100GW of computing power annually by 2030 signals a paradigm shift. If realized, this would transform space PV from a niche auxiliary power market into a massive energy infrastructure sector. The TAM could expand from the current ~RMB 100 billion level to a trillion-yuan scale, driven by the energy needs of high-performance computing nodes in orbit.

3. Technological Iteration: The Rise of P-Type HJT in Space

The economic logic of Low Earth Orbit (LEO) constellations—thousands of satellites requiring cost-effective mass production—is forcing a technological revolution in space power systems. The industry is transitioning away from expensive, rigid Multi-junction Gallium Arsenide (GaAs) cells towards a new generation of terrestrial-derived technologies adapted for space.

Why P-Type HJT?

We identify P-type Heterojunction (HJT) batteries as the immediate beneficiary of this transition. HJT offers a superior balance of performance characteristics required for the harsh space environment:

1. Radiation Resistance: Space involves high levels of cosmic radiation which degrades standard silicon cells. HJT structures demonstrate inherent resilience to radiation damage, maintaining efficiency over longer mission lifespans.
2. Lightweight & Flexible: Launch costs are directly tied to weight. HJT technology allows for thinner wafers and flexible substrates, significantly reducing the mass per watt compared to rigid GaAs panels.
3. High Efficiency: HJT maintains high conversion efficiencies even under the extreme temperature fluctuations found in orbit (direct sunlight vs. deep shadow).
4. Cost Advantage: Leveraging the mature terrestrial supply chain, HJT can be produced at a fraction of the cost of specialized GaAs cells. This enables the "economies of scale" necessary for mega-constellations.

The Future: Perovskite/Crystalline Silicon Tandems

Looking further ahead, Perovskite/Crystalline Silicon Tandem cells represent the next frontier. These cells offer theoretically higher efficiency limits. However, current ground-based R&D indicates challenges with stability in space environments. Specifically, the introduction of iodine ions is being researched to enhance radiation resistance. While not yet mature for immediate commercial deployment in space, this technology is a key watch item for long-term satellite energy solutions.

4. Strategic Implication: HJT "De-involution" via Space Demand

One of the most compelling investment arguments for HJT technology is its potential to escape the fierce price competition plaguing the ground-based PV market in China.

• Current Ground Market: Terrestrial HJT faces margin compression due to overcapacity and aggressive pricing from TOPCon competitors.
• Space Market Dynamics: The space sector values performance, weight, and reliability over absolute lowest cost. It offers higher margins and a differentiated value proposition.
• The "De-involution" Effect: The emergence of a robust space PV market provides a high-value outlet for HJT production. This external demand can stabilize pricing power, improve utilization rates for advanced HJT lines, and validate HJT as a mainstream platform technology. This, in turn, accelerates its global penetration and technological refinement.

5. Regular Data Updates: Energy Commodities & Power Markets

While the thematic focus is on space PV, underlying fundamentals in traditional energy remain relevant for the broader utilities portfolio. Below is a summary of key market data observed in the first week of January 2026.

Coal Market

• Qinhuangdao 5500 kcal Coal Prices: Prices have remained relatively stable, reflecting balanced supply and demand during the winter heating season. Inventory levels at Bohai Rim ports are adequate, mitigating immediate supply shock risks.
• Implication: Stable coal prices support predictable margin profiles for thermal power generators, removing a major variable from earnings forecasts for Q1 2026.

(Refer to Chart 1 & 2 in original appendix for detailed price trends and inventory levels)

Hydropower

• Three Gorges Dam Flow Rates: Inflow and outflow data for the Three Gorges reservoir indicate normal seasonal variations. No extreme drought or flood conditions were reported in the catchment area during the reporting period.
• Implication: Hydropower generation output is expected to align with historical seasonal averages, providing a stable baseline for renewable energy mix calculations.

(Refer to Chart 3 & 4 in original appendix for flow rate data)

Solar PV Supply Chain

• Polysilicon Prices: Prices for dense polysilicon material continue to hover at low levels, reflecting the ongoing oversupply in the upstream sector.
• Module Prices: Double-glass bifacial module prices (now tracked primarily as TOPCon type since May 2025) remain competitive.
• Implication: Low upstream costs benefit downstream project developers but continue to pressure manufacturer margins, reinforcing the need for technological differentiation (such as the move to HJT and space applications) to restore profitability.

(Refer to Chart 5 & 6 in original appendix for price indices)

Power & Gas Markets

• Spot Electricity Market: Weekly spot prices (Jan 1-4) showed typical volatility but remained within ranges supported by the coal-fired benchmark price.
• LNG Prices: Domestic LNG ex-factory prices and global LNG indices reflect seasonal winter demand peaks. However, global supply remains sufficient to prevent extreme price spikes akin to previous years.

(Refer to Chart 7, 8 & 9 in original appendix for spot power and LNG data)

Investment View & Recommendations

Based on the convergence of policy support, technological maturity, and market expansion in the commercial aerospace sector, we view Space Photovoltaics as one of the primary investment themes for the Power Equipment & New Energy sector in 2026.

We advocate a barbell strategy: holding stable utility assets while aggressively positioning in companies exposed to the high-growth aerospace-PV supply chain.

Core Logic for Stock Selection

1. Equipment Leaders: Companies that provide the core manufacturing equipment for HJT cells will benefit first from the capacity expansion required for both ground and space applications.
2. Integrated Energy & Aerospace Players: Firms with existing footprints in both renewable energy and aerospace/industrial gas sectors are best positioned to capture cross-sector synergies.
3. Technology Adopters: Cell and module manufacturers who have successfully qualified their HJT products for aerospace use or are leading R&D in radiation-resistant tandem cells.

Recommended Portfolio

🌟 Top Picks (Strong Buy / Overweight)

👀 Watch List (Accumulate on Weakness)

A. Equipment & Technology Enablers
* JieJia WeiChuang (300724.SZ): Major PV equipment supplier with strong R&D in next-gen cell technologies.
* Autowell (688516.SH): Specialized in automation and interconnection equipment, crucial for high-volume satellite panel assembly.

B. Cell & Module Manufacturers (HJT Focus)
* Risen Energy (300118.SZ): Early adopter and leader in HJT module commercialization.
* Junda Shares (002865.SZ): Strong presence in high-efficiency cell production.
* JinkoSolar (688223.SH) & Trina Solar (688599.SH): Industry giants with the scale to pivot significant R&D resources towards space-grade PV solutions.
* Mingyang Smart Energy (601615.SH): While primarily wind, its involvement in offshore and integrated energy systems positions it well for broader new energy infrastructure plays.

C. Commercial Aerospace Supply Chain
* Goldwind Science & Technology (002202.SZ): A-share counterpart for domestic exposure.
* Joynere Energy (605090.SH): Natural gas and energy services, potentially linked to aerospace fuel logistics.
* Xinleidian (300593.SZ): Power supply modules for aerospace and defense; direct beneficiary of satellite launch volume increases.
* Sinocera (300285.SZ): Advanced ceramic materials, potentially applicable in thermal management for space electronics.
* Jingshan Light Machine (000821.SZ): Packaging and automation equipment, relevant for satellite component manufacturing.
* Saiwu Technology (603212.SH): Materials for PV modules, including backsheets and films, adaptable for space environments.
* Jinjing Technology (600586.SH): Glass and materials supplier; potential role in protective coatings for space PV.
* Taisheng Wind Power (601608.SH): Structural components and towers, with potential crossover into aerospace structural manufacturing.

Risks / Headwinds

Investors should carefully consider the following risks which could impact the thesis and the performance of the recommended stocks:

1. Policy Execution Risk

The commercial aerospace sector is heavily reliant on government policy and strategic planning. Any delay in the implementation of national satellite network plans, changes in subsidy structures, or shifts in the definition of "New Quality Productive Forces" priorities could slow down the anticipated launch cadence and associated CAPEX.

2. Industry Development Below Expectations

The transition from prototype to mass commercialization in aerospace is complex. If the actual number of satellite launches falls short of the projected 4,000–6,000 annual units, or if the deployment of space computing infrastructure (e.g., Musk’s 100GW target) is delayed, the TAM expansion for space PV will be materially constrained.

3. Technological Breakthrough Delays

The thesis relies on the successful adaptation of P-type HJT and future Perovskite tandem cells for space environments.
* Radiation Degradation: If HJT cells fail to meet long-term durability standards in high-radiation orbits, requalification costs and timeline delays could occur.
* Perovskite Stability: The technical hurdle of stabilizing iodine-ion-enhanced perovskites in space is significant. Failure to achieve breakthroughs here could limit long-term efficiency gains.
* Cost Reduction: If the cost advantage of HJT over GaAs does not materialize as quickly as expected due to yield issues, adoption rates may lag.

4. Market Competition & "Involution" Persistence

While space offers a new outlet, the ground-based PV market remains highly competitive. If space demand does not grow fast enough to absorb excess HJT capacity, price wars in the terrestrial market could continue to erode margins for manufacturers, offsetting gains from the aerospace segment.

5. Geopolitical Tensions

Commercial aerospace is a strategically sensitive sector. Increased trade restrictions, export controls on dual-use technologies, or geopolitical friction could disrupt supply chains or limit international market access for Chinese aerospace and PV companies.

Rating / Sector Outlook

Sector Rating: Overweight (Maintained)

We believe the Utilities and New Energy sector is undervalued relative to its growth potential, particularly when factoring in the emergent Space Photovoltaics theme. The traditional utility business provides a defensive floor with stable cash flows, while the new energy equipment segment offers asymmetric upside through technological disruption and new market creation.

Outlook for 2026:
* Short Term (1-6 Months): Expect volatility as the market digests the initial capex announcements for satellite networks. Equipment suppliers (like Maxwell) will likely lead the rally.
* Medium Term (6-18 Months): As launch frequencies increase, cell and module manufacturers with verified space-grade products will begin to recognize revenue from this high-margin segment.
* Long Term (18+ Months): If space computing deployments accelerate, the sector could see a re-rating similar to the early EV boom, with TAM expansions driving multiple expansion for key technology leaders.

Analyst Certification & Disclosures

Certification:
The analysts named in this report certify that all of the views expressed herein accurately reflect their personal views about the subject securities or issuers. They also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Important Disclosures:
* Huayuan Securities Co., Ltd. holds licenses for securities investment consulting business approved by the China Securities Regulatory Commission.
* This report is confidential and intended solely for the use of Huayuan Securities' clients.
* The information contained herein is based on sources believed to be reliable, but Huayuan Securities does not guarantee its accuracy or completeness.
* Huayuan Securities, its affiliates, or employees may hold positions in the securities mentioned in this report and may engage in trading activities inconsistent with the views expressed herein.
* Past performance is not indicative of future results. Forecasts and estimates are subject to change without notice.

Investment Rating Definitions (Relative to Benchmark):
* Buy: Expected return > 20% above benchmark.
* Outperform: Expected return 5% - 20% above benchmark.
* Neutral: Expected return -5% to +5% relative to benchmark.
* Underperform: Expected return < -5% below benchmark.
* Sector Rating - Overweight: Sector index expected to outperform the market benchmark.

Benchmark Indices: A-Shares (CSI 300), Hong Kong (HSCEI), US (S&P 500/Nasdaq).

Disclaimer: This English analysis is derived from the original Chinese research report issued by Huayuan Securities on January 11, 2026. All data, ratings, and logical frameworks are preserved from the source. No new information has been added, and no subjective speculation beyond the source material has been included.