Equity Research: Power Equipment & New Energy Sector Weekly

Date: December 22, 2025
Analyst: Donghong Zeng, Qiaoyan Ruan (Soochow Securities)
Rating: Overweight (Maintained)
Sector: Electrical Equipment / New Energy

Executive Summary

The Power Equipment sector experienced a slight correction this week (Dec 15–19), underperforming the broader market as investors digested mixed signals across sub-sectors. However, underlying fundamentals reveal a diverging landscape: Energy Storage is defying seasonal norms with robust demand, while the Photovoltaic (PV) sector shows early signs of supply-side discipline aimed at curbing excessive competition ("involution"). Meanwhile, the Humanoid Robot theme continues to gain momentum with tangible industrial applications and capital inflows.

Key Investment Thesis:
1. Energy Storage (Strong Buy): Global demand is accelerating, driven by US utility-scale projects, European inventory normalization, and emerging market growth. We forecast global storage installations to grow >60% in 2025, reaching 330 GWh. The sector is transitioning from policy-driven to economically viable, with large-scale storage (Large Storage) leading the charge.
2. Lithium Batteries & Solid-State (Buy): Domestic EV sales remain resilient (+31% YTD), and European markets are exceeding expectations. Battery utilization rates are high even in the traditional off-season. Solid-state battery technology is entering a critical pilot phase in H2 2025, creating opportunities in sulfide electrolytes and specialized equipment.
3. Humanoid Robots (Strong Buy): The industry is at the "0-to-1" inflection point, analogous to the EV sector in 2014. With Tesla’s Gen3 launch expected in Q1 2026 and domestic players scaling up, we recommend focusing on the Tesla supply chain and core component manufacturers (actuators, sensors, screws).
4. Photovoltaics (Neutral/Selective Buy): Policy-guided supply constraints are beginning to stabilize prices, particularly in polysilicon. While Q4 demand is weak, the industry is moving towards healthier margins. We favor inverters and leading integrated module makers benefiting from the "anti-involution" trend.
5. Grid & Wind (Buy): Grid investment remains robust, with UHV (Ultra-High Voltage) projects accelerating. Offshore wind is entering a sustained prosperity cycle in Europe and China, with turbine prices stabilizing and margins recovering.

Key Takeaways

1. Market Performance Review

• Sector Index: The Electrical Equipment index fell 3.12%, lagging the broader market.
• Sub-sector Performance:
  • Decliners: Power Generation Equipment (-3.77%), Wind Power (-3.22%), PV (-2.51%).
  • Resilient: Nuclear Power (-1.05%), NEV (-0.86%), Lithium Batteries (-0.82%).
• Top Performers: Aerospace M&E, Oriental Rise, Xiangtan Electrochemical.
• Worst Performers: Enjie Shares, Maxwell Technologies, *ST Zhongli.

2. Energy Storage: "Off-Season" Demand Surge

• Global Growth Forecast: We have revised our 2025 global storage installation forecast upward to 330 GWh+ (a 60% YoY increase), driven by:
  • China: Independent storage economics are improving due to capacity compensation mechanisms. 2025 domestic installations are projected to reach 150 GWh+ (35% growth).
  • US: Despite tariff concerns, large-scale storage is booming. October large-scale storage installations hit 1,674 MW (+131% YoY). Full-year 2025 guidance is raised to 52.5 GWh.
  • Europe: Inventory destocking is complete. Household storage shipments are recovering, and commercial/industrial storage is taking off in emerging markets.
  • Emerging Markets: Middle East and other regions are seeing doubledigit growth in large-scale projects.
• Project Highlights:
  • Trina Storage deepened cooperation with Lightshift Energy, securing cumulative deliveries of 1 GWh in North America.
  • Canadian Solar (Artesian) received development consent for an 800 MW PV + 500 MW/1,000 MWh storage project in the UK.
  • Datang Minning Shared Storage Station completed annual tasks ahead of schedule, achieving 300 calls/year with an efficiency of 88.32%.

3. Electric Vehicles (EV) & Lithium Batteries

• Sales Data:
  • China: November NEV sales reached 1.82 million units (+21% YoY, +6% MoM). Penetration rate hit 53%. Full-year 2025 growth is estimated at 30%.
  • Europe: Nine major markets sold 287,000 units in November (+40% YoY). Full-year growth is upgraded to 30-35%, with 2026 expected to maintain >30% growth.
  • US: Sales faced headwinds post-subsidy changes (Oct sales -32% YoY), but long-term electrification potential remains vast (current penetration ~10%).
• Battery Supply Chain:
  • Utilization: December production schedules are flat or slightly increasing, defying typical seasonal declines. Q1 2026 is expected to see only single-digit sequential drops.
  • Pricing: Battery cell prices have risen by 0.03-0.05 RMB/Wh. Lithium Carbonate prices stabilized around 9.99-10.15 RMB/ton (+3% WoW).
  • Solid-State Breakthroughs: BYD, Gotion High-Tech, and FAW have下线 (rolled off) 60Ah vehicle-grade solid-state cells with energy densities of 350-400 Wh/kg. Pilot lines are expected to scale in H2 2025.
• Corporate Moves:
  • CATL: Humanoid robots are now deployed on battery production lines.
  • LG Energy Solution: A $4.5B+ order with Ford was cancelled; Ford also terminated its joint venture with SK On.
  • Volkswagen: Closing a German factory and cutting Powerco budget.
  • EU Policy: Abandoned the 2035 ICE ban, signaling a more flexible transition approach.

4. Photovoltaics (PV): Supply-Side Discipline Emerges

• Price Trends:
  • Polysilicon: Leading manufacturers raised quotes to 65-67 RMB/kg (up from ~53 RMB/kg) to signal price floors. However, actual transaction volumes remain low as downstream buyers resist.
  • Wafers: Prices are stabilizing. N-type 210R wafers at 1.20-1.23 RMB/piece. Manufacturers are controlling shipments to support prices.
  • Cells: N-type TOPCon cell prices rose to 0.30 RMB/W due to rising silver paste costs and supply constraints.
  • Modules: TOPCon module prices remain stable at 0.64-0.70 RMB/W. Some leaders are attempting to pass on cost increases, but terminal demand is weak.
• Policy & Strategy:
  • Industry associations are pushing for "anti-involution" measures, focusing on limiting low-price bidding and controlling output.
  • Q4 domestic demand is weak, but overseas markets (Europe, Emerging Markets) remain resilient.
  • Outlook: Global PV installations expected to grow 15% in 2025 but potentially decline 2% in 2026 as markets mature and supply adjusts.

5. Wind Power: Offshore Wind Momentum

• Tendering:
  • November tenders: 0.2 GW (all onshore).
  • YTD 2025 Tenders: 121.62 GW (+12.8% YoY), with Offshore Wind at 10.63 GW (+10.25% YoY).
• Pricing: Onshore wind turbine bids (including towers) averaged 1,747 RMB/kW. Margins are gradually recovering as price wars ease.
• Outlook: China’s offshore wind pipeline is strong (>8 GW in 2025). Europe is entering a multi-year boom cycle. We recommend exposure to subsea cables, monopiles, and OEMs.

6. Humanoid Robots: Industrial Application Accelerates

• Catalysts:
  • Tesla: Gen3 robot launch expected in Q1 2026. Long-term target: 1 million units by 2030.
  • Domestic Progress: LimX Dynamics launched TRON 2; Galaxy General Robotics raised $210M (RMB 2.1B).
  • Industrial Use: CATL has deployed humanoid robots on its battery PACK lines, marking a shift from lab to factory floor.
• Investment Logic: The sector is in the early "0-to-1" phase. Valuations based on 1 million unit assumptions imply only 10-15x P/E for robot-specific profits, offering significant upside. Focus on Tesla supply chain and core components: actuators, harmonic drives, ball screws, and sensors.

7. Grid & Industrial Control

• Grid Investment: Jan-Sep 2025 grid investment reached 437.8 billion RMB (+10% YoY).
• UHV Projects: State Grid launched feasibility studies for Qinghai-Guangxi DC, Kubuqi-Shanghai DC, and Suzhou Crossing Reinforcement. 2026 is expected to be a peak year for UHV AC/DC tendering.
• Industrial Automation: Sept 2025 PMI was 49.8% (slight recovery). Lithium, packaging, and logistics sectors are showing faster recovery in automation demand.

Risks / Headwinds

Rating / Sector Outlook

Overall Sector Rating: OVERWEIGHT (Maintained)

We maintain a positive outlook on the Power Equipment sector, driven by structural growth in Energy Storage, the technological leap in Solid-State Batteries, and the nascent but high-potential Humanoid Robot industry. While PV faces short-term demand softness, supply-side reforms are laying the groundwork for a healthier competitive landscape.

Sub-Sector Ratings:
* Energy Storage: Strong Buy. Highest visibility on growth (60%+ CAGR).
* Lithium Batteries: Buy. Profitability inflection point reached; solid-state optionality.
* Humanoid Robots: Strong Buy. Early-stage thematic opportunity with massive long-term TAM.
* Wind Power (Offshore): Buy. Margin recovery and strong order book.
* Grid Equipment: Buy. Defensive growth driven by state-backed infrastructure spending.
* Photovoltaics: Neutral/Selective Buy. Wait for clearer signs of demand recovery and price stabilization. Favor inverters and top-tier integrated players.

Investment View & Recommended Stocks

We recommend a barbell strategy: combining high-certainty leaders with stable earnings and high-growth thematic plays (Robotics/Solid-State).

1. Energy Storage & Inverters

• Sungrow Power (300274.SZ): Global inverter leader; strong presence in US large-scale storage; expanding into AIDC (AI Data Center) power solutions.
• Deye Shares (605117.SH): Pioneer in emerging markets; benefiting from household and C&I storage boom.
• Hyperstrong (300827.SZ) / Ginlong (300763.SZ): Benefiting from European inventory restocking and emerging market growth.

2. Lithium Batteries & Materials

• CATL (300750.SZ): Global leader in power and storage batteries. High certainty in earnings and growth; valuation remains attractive.
• EVE Energy (300014.SZ): Strong momentum in both power and storage segments; distinctive consumer battery business.
• Ganfeng Lithium (002460.SZ) / Sinomine (002738.SZ): Top-tier lithium resource owners. Benefiting from stabilized lithium carbonate prices and vertical integration.
• Hunan Yuneng (301358.SZ): LFP cathode leader; pricing power returning due to tight supply of high-end products.
• Tinci Materials (002709.SZ): Electrolyte and LiPF6 leader; significant elasticity from LiPF6 price increases.

3. Humanoid Robots & Automation

• Sanhua Intelligent Controls (002050.SZ): Global thermal management leader; major supplier for Tesla robot actuators.
• KeDaLi (002850.SZ): Global leader in battery structural parts; expanding into robot harmonic drives and assemblies.
• Inovance Technology (300124.SZ): Industrial automation leader; strong alpha in general automation; joint venture for robotics showing promise.
• Lei Sai Intelligent (002979.SZ): Servo controller leader; advantageous position in robot joint mass production.

4. Grid & Wind

• Sieyuan Electric (002028.SZ): Dual leader in domestic and overseas power equipment; orders and profits exceeding expectations.
• Orient Cable (603606.SH): High barriers in subsea cables; benefiting from offshore wind project restarts.
• Pinggao Electric (600312.SH): UHV leader; low valuation with consistent earnings beats.
• Goldwind (002202.SZ) / Mingyang Smart Energy (601615.SH): Turbine OEMs benefiting from margin recovery and offshore wind growth.

5. Photovoltaics (Selective)

• LONGi Green Energy (601012.SH): BC technology ramp-up expected to drive differentiation; acquiring Jingkong Energy to expand into large-scale storage.
• Jinko Solar (688223.SH): TOPCon technology leader; integrated model providing resilience.
• First Solar / US Exposure: Monitor companies with non-China supply chains for US market access (e.g., Canadian Solar/Artesian).

Valuation Table (Selected Companies)

(Source: Wind, Soochow Securities Estimates as of Dec 19, 2025)

Detailed Sector Analysis

I. Humanoid Robots: The Next Trillion-Dollar Frontier

Investment Logic:
The humanoid robot industry is currently where the EV industry was in 2014. We are witnessing the transition from prototype to pilot production.
1. Market Size: The long-term potential is estimated at 100 million+ units, corresponding to a market size exceeding 15 trillion RMB.
2. Valuation Gap: Current valuations of component suppliers often reflect only their traditional business. If we attribute potential profits from a 1 million unit robot volume, the implied P/E for the robot segment is only 10-15x, suggesting significant undervaluation relative to long-term growth.
3. Supply Chain Tightness: In the initial ramp-up phase, capacity bottlenecks in key components (screws, sensors, reducers) will allow suppliers to enjoy high margins and volume growth simultaneously.

Key Catalysts:
* Tesla Gen3 Launch (Q1 2026): Expected to set new benchmarks for cost and performance.
* Domestic Mass Production: 2025-2026 is the "Year 1" of mass production for Chinese firms, with small-batch deliveries to automotive plants starting in Q2.
* Capital Inflows: Recent fundraising by Galaxy General Robotics ($210M) validates investor confidence.

Recommended Supply Chain:
* Actuators: Sanhua Intelligent Controls, Tuopu Group, Fulim Precision.
* Reducers: KeDaLi, Leaderdrive, Siling Shares.
* Screws: Zhejiang Rongtai, Beite Technology.
* Sensors: Obi Zhongguang, Anpeilong.
* Whole Machine: UBTECH, Inovance.

II. Energy Storage: Global Boom, Structural Shifts

Market Dynamics:
* China: The business model for independent storage is becoming economically viable through capacity leasing and spot market participation. Policies in provinces like Jiangxi (Zero-Carbon Parks) and Yunnan (Frequency Regulation Market) are enhancing revenue streams.
* USA: The IRA (Inflation Reduction Act) continues to drive utility-scale projects. Despite political uncertainty, the backlog of projects ensures strong visibility for 2025-2026. Tariff avoidance strategies (manufacturing in Southeast Asia) are proving effective.
* Europe: After a period of destocking, household storage demand is normalizing. The focus is shifting towards larger, longer-duration systems for grid stability.

Price & Profitability:
* Battery cell prices have bottomed out and are seeing slight increases due to strong demand.
* System integrators with strong overseas channels (e.g., Sungrow, Trina) are maintaining healthy margins.

Outlook:
We expect global storage installations to grow 60% in 2025 and 50-60% in 2026. The compound annual growth rate (CAGR) for the next three years is projected at 30-35%.

III. Lithium Batteries & Solid-State: Innovation Cycle

Current Status:
* Demand: Stronger than expected. November EV sales in China and Europe beat estimates.
* Supply: Capacity utilization is high. Leading battery makers are running near full capacity, leading to a slight tightening in supply and modest price increases.
* Materials:
* Lithium Carbonate: Prices have stabilized around 100,000 RMB/ton. Further downside is limited due to cost support from high-cost miners.
* Electrolyte/Additives: VC and FEC prices have risen significantly and are holding steady.
* Cathodes: LFP prices are firming up; Ternary materials remain stable.

Solid-State Battery (SSB) Progress:
* Timeline: H2 2025 is the critical window for pilot line commissioning.
* Technology: Sulfide-based electrolytes are the leading candidate for high-performance applications.
* Investment Opportunity: Focus on companies with expertise in sulfide electrolytes, lithium sulfide, and specialized coating equipment.
* Key Players: CATL, BYD, Ganfeng Lithium, Shanghai Washba, Youyan New Energy.

IV. Photovoltaics: Navigating the Bottom

Supply-Side Reform:
* The industry is actively trying to stop the "race to the bottom" in pricing. Major polysilicon producers have coordinated to raise quotes and limit output.
* Polysilicon: Quotes raised to 65-67 RMB/kg. While transactions are still occurring at lower prices (51-53 RMB/kg), the gap is narrowing.
* Wafers/Cells: Manufacturers are reducing shipments to support prices. Silver paste cost pressures are forcing cell price hikes.

Demand Side:
* Domestic: Q4 is traditionally slow, and this year is no exception. Installation pace has slowed.
* International: Europe and emerging markets continue to absorb supply. US market remains lucrative but complex due to regulatory hurdles (FEOC, UFLPA).

Strategy:
Avoid pure-play manufacturers with high debt and outdated technology. Prefer:
1. Inverters: Less exposed to module price wars, benefiting from storage integration.
2. Integrated Leaders: Companies with strong balance sheets and diversified geographic revenue (e.g., Jinko, Canadian Solar).
3. Technology Leaders: Companies pioneering BC (Back Contact) or HJT technologies that offer efficiency premiums.

V. Wind Power: Offshore Renaissance

China:
* Offshore: The "Three-Year Action Plan" is driving provincial governments to accelerate permits. Jiangsu, Guangdong, and Shandong projects are moving forward.
* Onshore: Tendering volumes remain robust (>100 GW/year). Prices have stabilized, allowing OEMs to restore gross margins.

Europe:
* Auction results in Germany, UK, and France show higher strike prices, acknowledging inflation and supply chain costs. This improves profitability for developers and suppliers.
* Supply Chain: European local content requirements benefit Chinese suppliers with overseas factories (e.g., Dahai Heavy Industry, Titan Wind).

Recommendation:
Overweight Subsea Cables (high barrier, high margin) and Monopiles (export potential).

VI. Grid: Infrastructure Supercycle

Drivers:
1. Renewable Integration: Massive influx of wind/solar requires grid upgrades for stability.
2. AI/Data Centers: Rising power demand from AIDC requires high-voltage, direct current, and high-power distribution solutions.
3. Equipment Renewal: State-led initiative to replace aging grid infrastructure.

Key Trends:
* UHV DC/AC: 2026 is expected to be a peak year for tendering. Projects like Qinghai-Guangxi and Kubuqi-Shanghai are advancing.
* Flexible DC: Increasing use of VSC (Voltage Source Converter) technology for interconnecting asynchronous grids.
* Transformers: High demand globally, especially in US and Europe, leading to supply shortages and price hikes. Chinese exporters with certification (e.g., Jinpan Electric, Huaming Equipment) are well-positioned.

Company Updates & News Flash

Corporate Actions

• DKE (300820.SZ): Launched equity incentive plan. Performance targets: 200% revenue/profit growth by 2026 (vs 2025 base) for the first vesting period.
• Orient Cable (603606.SH): Won bids totaling 3.125 billion RMB for power, new energy, and marine projects (34% of 2024 revenue).
• KeDaLi (002850.SZ): Injected 300 million RMB into Shandong subsidiary to expand capacity.
• Ganfeng Lithium (002460.SZ): Repaid 763.95 million RMB in short-term financing notes. Transferred part of Shenzhen Yichu equity to Wanxin Green Energy.
• Sieyuan Electric (002028.SZ): Filed for H-share listing in Hong Kong (up to 15% of post-issue capital).

Industry News

• Ford/LG: Cancelled $4.5B battery plant deal. Ford also ended JV with SK On. Reflects cautious approach to EV CAPEX in US.
• EU Policy: Dropped 2035 ICE ban, allowing e-fuels. Signals pragmatic shift in climate policy.
• iRobot Bankruptcy: Filed for Chapter 11. To be acquired by Chinese manufacturer Shanshan (Roborock competitor context). Highlights intense competition in consumer robotics.
• Nuclear Fusion: Trump Media & Tech Group merging with TAE Technologies. Plans for 50MW commercial fusion plant by 2026. (Note: Highly speculative, long-term horizon).

Conclusion

The Power Equipment sector is undergoing a structural transformation. While traditional segments like PV face growing pains, new growth engines—Energy Storage, Solid-State Batteries, and Humanoid Robots—are accelerating. Investors should pivot towards companies with:
1. Global Footprint: Ability to navigate trade barriers and capture high-margin overseas demand.
2. Technological Moat: Leaders in solid-state tech, robot components, or high-efficiency PV.
3. Financial Health: Strong balance sheets to withstand cyclical downturns.

We maintain our Overweight rating on the sector, with a strong preference for Energy Storage and Robotics themes.

Disclaimer: This report is for institutional investors only. It does not constitute investment advice. Please refer to the full disclaimer in the original source document.