Industry Update: Power Equipment & New Energy Storage

Date: December 30, 2025
Sector: Power Equipment / Photovoltaics (PV) & Energy Storage Systems (ESS)
Rating: Outperform (Stronger than the Market)

Executive Summary

The Chinese photovoltaic (PV) and energy storage sectors are exhibiting a complex but fundamentally resilient trajectory as we close out 2025. Our latest industry tracking indicates a divergence between short-term production adjustments and robust medium-to-long-term demand drivers, particularly in overseas markets and domestic utility-scale storage integration.

In November 2025, domestic PV installations reached 22.02 GW, representing a significant month-on-month (MoM) surge of 74.76%, although this figure reflects an 11.92% year-on-year (YoY) contraction. More critically, the export landscape remains a primary growth engine. PV module exports totaled $2.412 billion in November, marking a substantial 34.08% YoY increase and a 6.84% MoM rise. Cumulative exports for the first eleven months of 2025 reached $25.885 billion, up 4.89% YoY. Similarly, inverter exports demonstrated strong momentum, with November revenues hitting $767 million (+25.91% YoY, +13.29% MoM), bringing the Jan-Nov cumulative total to $8.202 billion (+29.57% YoY).

On the supply side, production schedules for December 2025 have been revised downward due to seasonal淡季 (off-season) effects in overseas markets and inventory accumulation domestically amidst rising component prices. However, price signals are stabilizing and even improving in specific segments; notably, TOPCon double-glass modules saw a slight price increase to RMB 0.70/W, and N-type silicon wafers rose by nearly 6%. In the energy storage sector, bidding activity has reached new highs, with November seeing a record 64 GWh of new tenders for EPC/PC and storage systems, a 65% MoM increase in capacity.

We maintain an Outperform rating on the sector. The structural shift towards high-efficiency N-type technologies, the sustained boom in global inverter demand (particularly in Europe, Asia, and emerging markets like Australia), and the accelerating deployment of long-duration storage systems provide a solid foundation for earnings recovery among leading manufacturers. We recommend investors focus on companies with strong overseas channel capabilities and integrated storage solutions, specifically highlighting Sungrow Power Supply (300274.SZ), Narada Power Source (300068.SZ), Tongrun Equipment (002150.SZ), Huashengchang (002980.SZ), and Shouhang New Energy (301658.SZ).

Key Takeaways

1. Production Dynamics: Short-Term Correction Amidst Seasonal and Policy Shifts

The production landscape in late 2025 reflects a tactical adjustment by manufacturers rather than a structural decline in demand. Two distinct trends are emerging in PV modules and lithium batteries.

A. Photovoltaic Module Production

According to data from Shanghai Metals Market (SMM), the overall production volume of PV modules in November 2025 decreased by 2.43% month-on-month compared to October. This slight contraction is attributed to several converging factors:

• Domestic Inventory Build-up: Terminal installation progress in December fell short of corporate expectations. Concurrently, the recent uptick in module prices has triggered resistance from downstream developers, leading to a halt in destocking and a subsequent increase in domestic inventory levels.
• Overseas Seasonality & Policy Fade: The overseas market has entered its traditional off-season. Furthermore, the stimulating effect of previous export tax rebate policies has diminished, leading to a noticeable decline in overseas demand. Consequently, manufacturers have synchronously lowered their production schedules for the immediate future.

This suggests that the supply chain is actively managing inventory health rather than facing a demand cliff. The reduction in output is a prudent response to temporary demand softness, aiming to prevent excessive price wars during the low-season period.

B. Lithium Battery Production Outlook (Jan 2026 Forecast)

Looking ahead to January 2026, data from TD (TaiDong Times Think Tank) provides a granular view of battery production schedules across power, energy storage, and consumer segments:

• China Market: The combined scheduled production for power, energy storage, and consumer batteries is forecast at 210 GWh, representing a 4.55% MoM decline.
  • Segment Divergence: The primary driver of this decline is the power battery segment, where second-tier enterprises are experiencing significant production cuts. In contrast, energy storage battery production remains at high levels and is even showing slight growth, underscoring the resilience of the storage sector relative to the EV market.
• Global Market: The global combined scheduled production is estimated at 220 GWh, a 6.38% MoM decrease.

Analytical Implication: The divergence between power and storage battery schedules is a critical signal. It indicates that while the electric vehicle (EV) market may be undergoing consolidation or seasonal slowdowns, the energy storage sector continues to operate at near-full capacity. This reinforces our thesis that energy storage is becoming an independent, high-growth pillar within the broader new energy ecosystem, less susceptible to the cyclical fluctuations of the automotive industry.

2. Price Trends: Stabilization and Structural Differentiation

Price movements in December 2025 indicate a bottoming-out process for upstream materials and a modest recovery in mid-stream components. The era of precipitous price declines appears to be pausing, offering potential margin relief for manufacturers.

A. Photovoltaic Supply Chain Prices (as of Dec 24, 2025)

Note: Data sources include InfoLink and internal tracking.

The rise in N-type wafer prices is particularly noteworthy. It confirms that the market is willing to pay a premium for higher efficiency products, which aligns with the global trend towards maximizing energy yield per square meter, especially in land-constrained markets like Europe and Japan.

B. Energy Storage System (ESS) Pricing (November 2025)

The pricing dynamics in the domestic energy storage market reveal a bifurcation based on system duration and configuration. Data from CESA (China Energy Storage Alliance) highlights the following:

• Overall LFP ESS Market (Excluding C&I Cabinets):

  • Quote Range: RMB 0.4452 – 0.6828 / Wh.
  • Average Quote: RMB 0.5721 / Wh.
  • Weighted Average Winning Bid Price: RMB 0.4912 / Wh.
  • MoM Change: -6.4%.
  • Interpretation: The general decline in the weighted average bid price suggests intense competition in standard, short-duration storage projects. Developers are leveraging economies of scale and competitive bidding to drive down costs for standard 2-hour systems.

• 2-Hour Lithium ESS Systems:

  • Quote Range: RMB 0.5466 – 0.588 / Wh.
  • Average Quote: RMB 0.5631 / Wh.
  • Weighted Average Winning Bid Price: RMB 0.569 / Wh.
  • MoM Change: +2.88%.
  • Interpretation: Contrary to the broader market trend, 2-hour systems saw a price increase. This anomaly may be attributed to specific project requirements, higher quality standards, or a shift in the mix of projects awarded during the month towards more complex or integrated solutions that command higher value.

• 4-Hour Lithium ESS Systems:

  • Quote Range: RMB 0.4452 – 0.54 / Wh.
  • Average Quote: RMB 0.4983 / Wh.
  • Weighted Average Winning Bid Price: RMB 0.4537 / Wh.
  • MoM Change: -10.86%.
  • Interpretation: Long-duration (4-hour) systems experienced a sharp price decline. This reflects aggressive cost competition in the long-duration segment, possibly driven by technological advancements in cell packing, thermal management, and system integration that allow suppliers to offer lower prices while maintaining margins. It also indicates that the market for long-duration storage is still in a price-discovery phase, with vendors willing to sacrifice margin to secure market share in this emerging high-growth segment.

Strategic Insight: The divergent pricing between 2-hour and 4-hour systems suggests that investors should differentiate between companies specializing in standard short-duration storage versus those with advanced capabilities in long-duration storage. The latter may face margin pressure in the short term but could benefit from volume growth as grid stability requirements evolve.

3. Demand Analysis: Overseas Strength Offsets Domestic Volatility

The demand profile for November 2025 presents a compelling case for the globalization of Chinese new energy enterprises. While domestic growth rates have moderated, overseas markets are delivering robust double-digit growth, driven by energy transition mandates and grid modernization needs.

A. Overseas Demand: The Primary Growth Engine

1. Photovoltaic Module Exports
According to the General Administration of Customs of China:
* November 2025 Export Value: $2.412 billion.
* Growth Metrics: +34.08% YoY; +6.84% MoM.
* Cumulative (Jan-Nov 2025): $25.885 billion, representing a 4.89% YoY increase.

The strong YoY growth in November, despite the seasonal context, indicates that underlying demand in key international markets remains resilient. The MoM increase is particularly encouraging, suggesting that the "off-season" impact was less severe than anticipated, or that specific regional demands (e.g., year-end project completions in certain markets) provided a boost.

2. Inverter Exports
Inverters, being a critical component with higher technical barriers and brand stickiness, showed even stronger performance:
* November 2025 Export Value: $767 million.
* Growth Metrics: +25.91% YoY; +13.29% MoM.
* Cumulative (Jan-Nov 2025): $8.202 billion, representing a substantial 29.57% YoY increase.

The cumulative growth rate of inverters (~30%) significantly outpaces that of modules (~5%), indicating that the value mix is shifting towards higher-margin balance-of-system (BOS) components. This is a positive structural trend for leading inverter manufacturers who have established strong global brands.

3. Regional Breakdown of Inverter Exports (Jan-Nov 2025)
The geographic distribution of inverter exports reveals a diversified and expanding global footprint:

• Europe: Remains the largest market with $3.13 billion in exports. Despite some saturation concerns, Europe continues to drive demand due to its ambitious REPowerEU goals and distributed generation incentives.
• Asia: The second-largest market with $2.866 billion. Growth in Asia is fueled by industrialization and electrification efforts in Southeast Asia and India.
• Emerging Markets (South America & Others): These regions are providing diversified growth potential. Notably, Australia has emerged as a standout performer.

Spotlight on Australia:
In November 2025, inverter exports to Australia surged, with a YoY growth rate exceeding 177%. This explosive growth is driven by Australia’s high solar penetration rates, frequent grid instability issues, and favorable policies for residential and commercial storage coupled with solar. Australia represents a high-value market with a strong preference for quality and reliability, offering significant upside for Chinese brands that can meet stringent technical standards.

Source: General Administration of Customs, Aijian Securities Research Institute

The data clearly shows that while North American exports faced a significant decline in November (-31.84% YoY), likely due to trade policy uncertainties or inventory adjustments, the growth in Europe, Asia, and especially Australia has more than compensated. The diversification away from any single market reduces systemic risk for Chinese exporters.

B. Domestic Demand: Installation Surge and Record Storage Tenders

1. PV Installations
* November 2025 New Installations: 22.02 GW.
* Growth Metrics: +74.76% MoM; -11.92% YoY.
* Cumulative (Jan-Nov 2025): 274.89 GW, representing a 33.25% YoY increase.

The massive MoM jump in November is typical of the year-end rush in China, where developers accelerate installations to meet annual targets or capitalize on subsidy deadlines. The YoY decline, however, suggests that the base effect from 2024 was exceptionally high, or that domestic utility-scale project approvals have slowed slightly due to grid connection constraints. Nevertheless, the cumulative growth of 33.25% confirms that the domestic market remains one of the largest and fastest-growing PV markets globally.

2. Energy Storage Tenders
A critical highlight for the sector is the record-breaking tender activity in November:
* New Tender Scale (EPC/PC + Storage): 21.8 GW / 64 GWh.
* Growth Metrics: Capacity size increased by 65% MoM; decreased by 4% YoY.
* Significance: This represents the highest monthly tender volume in 2025.

The surge in tendering activity is a leading indicator for future revenue recognition. The fact that capacity tenders grew by 65% MoM suggests that project developers are aggressively moving forward with storage integration, likely driven by mandatory storage allocation policies for new renewable projects and the increasing economic viability of arbitrage and ancillary services. The slight YoY decline is negligible given the massive absolute volume and indicates a maturing market that is sustaining high levels of activity rather than experiencing exponential hyper-growth from a low base.

4. Investment Logic and Sector Drivers

Based on the data analyzed above, we identify three core pillars supporting our Outperform rating:

Pillar 1: Resilient Overseas Demand and Geographic Diversification

The narrative that Chinese PV and storage companies are overly reliant on a single market is disproven by the November data. The 34% YoY growth in module exports and 30% cumulative growth in inverter exports demonstrate strong global competitiveness. The emergence of Australia as a high-growth market (177% YoY inverter export growth) and the steady performance in Europe and Asia provide a diversified revenue base. This geographic spread mitigates the risk of trade barriers in any single jurisdiction (e.g., US or EU tariffs) and allows companies to capture growth in multiple energy transition waves simultaneously.

Pillar 2: Technological Premium and Price Stabilization

The stabilization of polysilicon prices and the 5.93% weekly increase in N-type wafer prices signal that the industry is moving past the destructive price war phase. The market is increasingly rewarding technological leadership. Companies that have successfully transitioned to N-type TOPCon and HJT production lines are capturing higher margins. The slight increase in TOPCon double-glass module prices (to RMB 0.70/W) further supports this view. Investors should favor companies with high N-type product mixes and strong R&D capabilities, as they are better positioned to maintain profitability in a stabilizing price environment.

Pillar 3: Energy Storage as an Independent Growth Curve

The divergence in battery production schedules (storage up/stable vs. power down) and the record 64 GWh storage tender in November highlight that energy storage is no longer just an accessory to PV but a standalone, high-growth industry. The demand for storage is being driven by:
1. Grid Stability Needs: As renewable penetration increases, the need for frequency regulation and peak shaving grows.
2. Policy Mandates: Many provinces in China and countries abroad now require co-located storage for new renewable projects.
3. Economic Viability: Falling battery costs (despite the recent slight uptick in 2h systems) are making storage arbitrage and capacity markets more profitable.

Companies with integrated "PV + Storage" solutions and strong expertise in long-duration storage (4h+) will be the primary beneficiaries of this trend.

Risks / Headwinds

While the outlook is positive, institutional investors must remain cognizant of the following risks that could impact sector performance:

1. Intensified Competition and Margin Compression

• Risk Description: The PV and ESS sectors remain highly fragmented with numerous players vying for market share. Despite recent price stabilization, the threat of price wars persists, particularly in the standard 2-hour storage segment and mainstream PV modules.
• Impact: If competitors engage in aggressive pricing to clear inventory or gain market share, gross margins could compress, negatively impacting earnings even if revenue grows. The -10.86% MoM drop in 4h storage bid prices is a warning sign of intense competition in the long-duration segment.
• Mitigation: Focus on companies with strong brand equity, vertical integration, and differentiated technology that allows them to command a premium.

2. Policy Uncertainty and Demand Volatility

• Risk Description: The new energy sector is heavily influenced by government policies, including subsidies, tax credits, grid connection rules, and electricity market reforms.
• Specific Concerns:
  • Domestic: Changes in China’s renewable energy quota allocations or grid curtailment policies could slow down domestic installation rates.
  • International: The expiration or modification of incentives in key markets like Europe (e.g., changes to net metering) or the US (Inflation Reduction Act implementation details) could dampen demand.
• Impact: Sudden policy shifts can lead to demand cliffs, causing inventory build-ups and production cuts, as seen in the December production schedule revisions.

3. International Trade Frictions and Geopolitical Risks

• Risk Description: The global trade environment for Chinese new energy products is becoming increasingly hostile. Several countries are implementing or considering trade barriers, including anti-dumping duties, countervailing duties, and local content requirements.
• Specific Concerns:
  • North America: The -31.84% YoY decline in inverter exports to North America in November may be an early indicator of tightening trade restrictions or supply chain decoupling efforts.
  • Europe: Potential investigations into Chinese EV and renewable subsidies could lead to tariffs on PV and storage products.
  • Emerging Markets: While currently growing, these markets may also introduce protectionist measures as their domestic industries develop.
• Impact: Trade barriers can directly reduce export volumes, force companies to establish costly local manufacturing facilities, or erode profit margins through tariff absorption. Companies with limited geographic diversification are most vulnerable.

Rating / Sector Outlook

Sector Rating: Outperform (Stronger than the Market)

We maintain our Outperform rating for the Power Equipment sector, specifically the PV and Energy Storage sub-sectors. This rating is based on a 6-month horizon relative to the CSI 300 Index.

Rationale for Rating:

1. Valuation Attractiveness: After a prolonged period of adjustment, valuations in the PV and storage sectors have become more reasonable, reflecting the earlier price wars. With signs of price stabilization and margin recovery, the risk-reward profile is improving.
2. Earnings Visibility: The strong export data (especially inverters) and record domestic storage tenders provide high visibility for Q4 2025 and Q1 2026 revenues for leading companies.
3. Structural Growth: The global energy transition is a secular trend. The shift to N-type technology and the mandatory integration of storage create durable growth avenues that are not solely dependent on cyclical economic factors.

Investment View: Selective Bullishness

While the sector is rated Outperform, we advocate for a selective approach. Not all companies will benefit equally from the current dynamics. Investors should prioritize companies that exhibit:
* Strong Overseas Channels: Ability to navigate trade complexities and capture growth in high-margin markets like Europe and Australia.
* Technological Leadership: Dominance in N-type cell/module production and advanced storage system integration.
* Financial Health: Strong balance sheets to withstand potential short-term volatility and invest in R&D.

Recommended Stocks

Based on the analysis of export strength, storage growth, and technological positioning, we recommend the following标的 (targets):

1. Sungrow Power Supply (300274.SZ)

• Core Logic: As a global leader in solar inverters and energy storage systems, Sungrow is perfectly positioned to benefit from the 29.57% YoY growth in inverter exports and the booming storage market. Its strong brand presence in Europe and emerging markets like Australia allows it to capture high-value orders. The company’s integrated "PV + Storage" solution portfolio aligns with the trend of increasing storage attachment rates.
• Key Catalyst: Continued market share gains in global utility-scale storage and residential inverter markets.

2. Narada Power Source (300068.SZ)

• Core Logic: Narada has successfully transformed into a leading player in the energy storage battery and system integration space. With storage battery production remaining high while power battery production dips, Narada’s focused strategy pays off. The company is well-positioned to benefit from the record 64 GWh storage tenders in China and growing overseas demand for LFP storage solutions.
• Key Catalyst: Expansion in long-duration storage projects and international storage contracts.

3. Tongrun Equipment (002150.SZ)

• Core Logic: Tongrun has established a strong presence in the PV inverter and energy storage cabinet market, particularly in overseas distributed generation segments. The company benefits from the high growth in Australian and European inverter exports. Its strategic partnerships and distribution networks provide a competitive edge in accessing fragmented residential and C&I markets.
• Key Catalyst: Growth in its overseas ODM/OEM business and expansion into new geographic markets.

4. Huashengchang (002980.SZ)

• Core Logic: Specializing in test and measurement instruments, Huashengchang serves the entire new energy supply chain. As the industry upgrades to N-type technologies and more complex storage systems, the demand for high-precision testing equipment increases. The company offers a "pick-and-shovel" play on the sector’s technological upgrade cycle, with less exposure to direct product price competition.
• Key Catalyst: Increased capital expenditure by PV and battery manufacturers for new production lines requiring advanced testing.

5. Shouhang New Energy (301658.SZ)

• Core Logic: A newer listing with a focus on microinverters and optimized energy management systems. Shouhang is well-positioned to capture the growth in the distributed PV market, particularly in regions like Australia where module-level power electronics (MLPE) are gaining traction due to safety and efficiency requirements. The 177% YoY growth in Australian inverter exports is a direct tailwind for its product mix.
• Key Catalyst: Penetration into high-end residential markets in Europe and Oceania.

Detailed Data Appendix & Analysis

To provide further depth for institutional modeling, we break down the key data points and their implications for financial forecasting.

A. PV Module Export Decomposition

The $2.412 billion in module exports for November 2025 is a critical top-line metric. To contextualize this:
* Average Selling Price (ASP) Implications: Assuming an average module efficiency and wattage, the volume implied by this value suggests that while prices have stabilized, volume growth is the primary driver. The 6.84% MoM increase in value, despite the seasonal context, indicates that Asian and European buyers are pulling forward orders or that spot market prices held firm.
* Cumulative Trend: The 4.89% YoY growth in Jan-Nov cumulative exports is modest compared to the single-month spike. This suggests that the first half of 2025 may have been slower, with H2 accelerating. For full-year 2025 estimates, analysts should weight H2 performance more heavily.

B. Inverter Export Regional Sensitivity

The table below reiterates the critical importance of regional diversification for inverter makers:

Investment Implication: Companies with higher revenue exposure to Europe and Australia should trade at a premium to those reliant on North America or purely domestic sales.

C. Storage Bidding Price Dynamics

The divergence in storage prices requires careful modeling for margin forecasts:

• 2-Hour Systems (+2.88% Price): This segment likely includes more integrated, turnkey solutions or projects with stricter technical specifications. Companies specializing in high-quality, safe, and intelligent storage systems can maintain or expand margins here.
• 4-Hour Systems (-10.86% Price): This sharp decline indicates a "land grab" phase. Suppliers are cutting prices to secure reference projects and market share. For investors, this means that revenue growth in the 4h segment may come at the expense of short-term margins. However, companies that can achieve cost leadership through scale and supply chain integration will emerge as winners in the long run.

D. Production Schedule Adjustments

The 2.43% MoM drop in PV module production and the 4.55-6.38% drop in battery production for Jan 2026 are normal seasonal adjustments. However, the reason matters:
* Inventory Control: The fact that domestic inventory is "stopping its decline and turning to increase" suggests that manufacturers are prioritizing balance sheet health over market share. This is a mature industry behavior and is ultimately positive for long-term profitability, as it prevents the catastrophic oversupply seen in previous cycles.
* Export Tax Rebate Fade: The mention of the fading impact of export tax rebates implies that previous export spikes were partly policy-driven. The fact that exports remain strong despite this fade is a testament to genuine organic demand.

Conclusion

The Power Equipment sector, encompassing PV and Energy Storage, stands at a pivotal juncture in late 2025. The data from November confirms that the industry is transitioning from a phase of chaotic expansion and price erosion to one of structured growth, technological differentiation, and global diversification.

The Outperform rating is underpinned by:
1. Robust Overseas Demand: Particularly in inverters, where cumulative exports are up nearly 30%, led by Europe and the surging Australian market.
2. Storage Boom: Record domestic tenders (64 GWh) and resilient battery production schedules highlight storage as a key growth vector.
3. Price Stabilization: Early signs of price recovery in N-type wafers and modules suggest improving margin profiles for leaders.

While risks such as trade friction and competition persist, they are largely priced in or manageable for companies with strong global footprints and technological moats. We advise institutional investors to overweight the sector, focusing on the recommended names (Sungrow, Narada, Tongrun, Huashengchang, Shouhang) that are best positioned to capitalize on these structural trends.

Disclaimer:
This report is prepared by Aijian Securities Co., Ltd. for institutional clients only. The information contained herein is derived from sources believed to be reliable, but Aijian Securities does not guarantee its accuracy or completeness. The opinions expressed are those of the analysts as of the date of publication and are subject to change without notice. This report 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.

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

Contact Information:
* Zhu Pan (Securities Analyst): zhupan@ajzq.com | 021-32229888-25527
* Lu Jiayi (Contact Person): lujiayi@ajzq.com | 021-32229888-25521

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