Equity Research: New Energy & Power Equipment Weekly

Date: December 20, 2025
Source: Sinolink Securities Research Institute
Analysts: Yao Yao (S1130512080001), Zhang Jiawen (S1130523090006), Tang Xueqi (S1130525020003)
Contacts: Fan Xiaopeng, Lu Wenjie

Title: Space-Based Photovoltaics: The "Power Supply" for the Commercial Aerospace Era; Lithium Prices Rebound on Supply Constraints

Executive Summary

This week, the Commercial Aerospace theme has gained significant momentum, with Space-Based Photovoltaics (Space PV) emerging as a critical sub-sector warranting top-tier investor attention. We posit that Space PV is to commercial aerospace what power supply is to AI computing capacity. Whether for short-term low-earth orbit (LEO) satellite constellations, mid-to-long-term space data centers, or future lunar bases, solar photovoltaics remain the virtually exclusive energy solution. Driven by the strategic competition between China and the US, the urgency of securing limited orbital resources, and a new product pricing logic, we believe the fundamental catalysts for Space PV will materialize significantly faster than other recent hot themes such as nuclear fusion or robotics.

In parallel, traditional renewable sectors show distinct positive trends:
* Wind Power: The landing of Poland’s 3.4GW offshore wind auction enhances visibility for European medium-to-long-term demand. We expect annual grid-connected capacity in Europe to exceed 14GW by 2031-2032, accelerating orders for monopiles, submarine cables, and turbines.
* Hydrogen & Fuel Cells: A landmark deal where global shipping giant CMB.Tech secured 158,000 tons of green ammonia from China validates the commercial viability of green ammonia as a marine fuel. Meanwhile, FuelCell Energy’s strategic pivot towards AI data center power solutions has been well-received by the market.
* Lithium Batteries: Lithium carbonate prices have surged, breaking the 110,000 RMB/ton mark in futures, driven by supply-side disruptions (delayed restart of Jiangxi Jianxiawo mine) and low inventory levels. However, Ford’s termination of a ~$6.9 billion battery supply agreement with LG Energy Solution highlights ongoing adjustments in overseas EV demand and policy landscapes.
* Grid & AIDC: Siyuan Electric’s planned H-share listing marks a milestone in its transition from product export to comprehensive "capital + capacity + service" globalization. In the AI Data Center (AIDC) sector, recent factory audits by overseas tech giants have boosted sentiment for domestic liquid cooling suppliers, reinforcing our bullish view on their rising global market share.

We maintain an Overweight rating on the New Energy sector, with specific emphasis on Space PV supply chains, European offshore wind beneficiaries, green ammonia producers, and leading liquid cooling solution providers.

Key Takeaways

1. Space-Based Photovoltaics: The Next Trillion-Dollar Opportunity

Investment Logic:
The narrative "AI ends with electricity" extends logically to space: "Commercial Aerospace runs on Solar."
* Strategic Urgency: The US Executive Order on "Ensuring American Space Superiority" aims to attract $50 billion in private investment by 2028. Simultaneously, China faces pressure under the ITU’s "first-come, first-served" rule for orbital slots, necessitating rapid satellite deployment.
* Technological Shift: As satellite functions become more complex, solar wing areas are expanding to hundreds of square meters. Traditional space PV solutions face limitations in cost, weight, and flexibility. We anticipate accelerated adoption of Crystalline Silicon (c-Si) due to its cost-effectiveness, and Perovskite-Silicon Tandem cells for their high efficiency, lightweight, and flexible properties.
* Market Catalyst: Google’s "Project Suncatcher" proposes a space-based data center powered by solar energy. With launch costs potentially dropping to $200/kg, the levelized cost of energy in space could compete with terrestrial data center energy costs ($570-$3,000/year), leveraging near-continuous, free solar resources.

Recommended Focus:
* Cell Manufacturers: Junda Shares, Risen Energy, GCL Technology, Shanghai Gangwan.
* Equipment Suppliers: Maxwell Technologies (Maiwei), JieJia WeiChuang.

2. Wind Power: European Offshore Wind Demand Visibility Improves

Poland 3.4GW Auction Results:
On December 18, Poland announced the results of its 2025 offshore wind auction under the Contract for Difference (CfD) mechanism. Three projects totaling ~3.4GW were awarded:
* Baltyk I (1,560MW): Equinor & Polenergia.
* Baltica 9 (975MW): PGE.
* Baltic East (900MW): Orlen.
* Pricing: Winning bids ranged from €113-117/MWh, above the current European average, indicating high execution probability.
* Timeline: Initial grid connection targeted for December 2032. We expect supply chain orders (monopiles, cables) to begin releasing from 2027 onwards.

Outlook:
Tracking European tenders, we forecast annual offshore wind grid connections in Europe to exceed 14GW by 2031-2032. The shift to CfD mechanisms aligns bids closer to market costs, improving project conversion rates. This creates a robust pipeline for turbines, foundations, and cables.

Company Spotlight: Orient Cable (Dongfang Cable)
* New Order: Won a bid worth RMB 3.125 billion, including a RMB 1.9 billion EPCI contract for ultra-high voltage submarine cables and installation in Asia.
* Implication: Demonstrates strong technical capability and overseas delivery track record. As European offshore wind supply chains accelerate and Asian power interconnection projects expand, overseas cable demand is entering a phase of rapid release.

Investment Lines:
1. OEMs: Benefiting from margin repair in H2 2025 and FY2026 due to higher-priced domestic onshore orders and profitable overseas offshore contracts. Focus: Goldwind, Yunda, Mingyang Smart Energy, Sany Heavy Energy.
2. Offshore & Overseas ("Two Seas"): Domestic offshore construction acceleration drives volume for piles and cables; European recovery drives order backlog. Focus: Dajin Heavy Industry, Orient Cable, Haili Wind Power.
3. Components: Q3 is the peak season for castings/forgings. Price hikes implemented in Q2 are fully reflecting in Q3/Q4 earnings. Focus: Riyue Shares, Jinlei Shares.

3. Hydrogen & Fuel Cells: Green Ammonia Commercialization Validated

Landmark Green Ammonia Deal:
* Event: Belgian shipping company CMB.Tech (largest owner of ammonia-fuel vessels) signed a deal with China Energy Construction (CEEC) to purchase 158,000 tons of green ammonia from its Jilin Songyuan project.
* Significance: First large-scale, long-term green ammonia procurement agreement in the shipping industry. The ammonia, certified under ISCC EU RFNBO standards, will fuel CMB.Tech’s 13 ammonia-powered vessels starting in 2026. This commercially validates green ammonia as a viable marine fuel.
* Supply Chain Strength: Highlights China’s full-chain capability in production, certification, storage, transport, and bunkering.

FuelCell Energy (FCEL) Pivot to AI:
* Financials: Q4 FY2025 revenue grew 12% YoY to $55 million; Full-year revenue up 41% to $158.2 million. Adjusted net loss narrowed to $191.1 million.
* Strategy: Management explicitly positioned fuel cells as a key solution for AI data centers, addressing the gap between surging AI power demand and slow grid expansion. This narrative has driven significant stock appreciation.

Investment Themes:
1. Green Methanol: Short-term supply shortage (current capacity <1 million tons vs. demand for 300 methanol ships). Producers with early projects and shipowner partnerships will capture high premiums. Focus: Goldwind, Jidian Shares, CIMC Enric, China Tianying.
2. Electrolyzers: Demand surge expected in H2 2025 as green hydrogen/ammonia/methanol projects accelerate construction to match vessel delivery timelines. Focus: Huadian Kegong, Huaguang Energy, Shuangliang Eco-Energy.
3. Fuel Cell Vehicles: Policy support (toll exemptions, subsidy settlements) in demonstration city clusters will drive vehicle adoption in 2025. Focus: SinoHytec, Guofu Hydrogen, Refire, Sinohydrate.

4. Lithium Batteries: Supply Disruptions Drive Price Rebound

Price Movement:
* Futures: Lithium carbonate futures broke through 110,000 RMB/ton.
* Spot: Battery-grade lithium carbonate rose to 101,500 RMB/ton (Dec 19).
* Inventory: Total market inventory dropped below 110,000 tons. Trader inventories are low, supporting short-term price strength.

Supply Side Shock:
* Jiangxi Jianxiawo Mine: Environmental impact assessment for restart was publicized on Dec 18. Restart is delayed until at least Q2 2026. This creates a monthly supply gap estimate of 7,000-8,000 tons, outweighing demand concerns.

Demand/Corporate News:
* Ford Terminates LGES Deal: Ford terminated a ~9.6 trillion KRW (~$6.9 billion / 45.9 billion RMB) battery supply agreement with LG Energy Solution for European EVs (2026-2027). Cited reasons: Policy adjustments and changed EV demand expectations. This follows SK On’s halted joint venture with Ford in the US. Indicates a tightening of overseas OEM electrification investments.
* Geely Solid-State Battery: Geely’s "Solid-State Battery & Key Material Process Scale-up Verification Project" entered environmental assessment. Total investment: 71 million RMB. Aims to verify 60Ah cells (1,000 units/year) and <1Ah cells. Marks progress from lab (20Ah, 400Wh/kg) to pilot scale.

Material Prices Update:
* Cobalt Sulfate: Prices rose to ~92,500 RMB/ton due to tight supply from DRC export quotas.
* LFP (Lithium Iron Phosphate): Prices rose driven by cost push (carbonate) and strong demand. Power-type LFP avg price: 43,500 RMB/ton (+5.58% WoW).
* Anode Materials: Prices stable. High costs (petroleum coke) and downstream pressure limit upside. Low-end segment faces intense competition.
* Separators: Wet process separator prices stabilized after previous increases. Head players operating at >90% capacity; some orders booked into 2026.

5. AIDC Liquid Cooling: Domestic Suppliers Gaining Global Share

Catalyst:
* Supermicro & xAI: Announced a GW-level GB300 data center cooperation using all-liquid cooling solutions.
* Factory Audits: Recent audits of supply chain partners by overseas hyperscalers have boosted market confidence in domestic leaders’ ability to secure shares in North American CSP (Cloud Service Provider) projects.

Investment View:
As overseas ASIC server customers seek to diversify supply chains away from NVIDIA-centric models, domestic Chinese companies have an opportunity to increase direct order volumes. The barrier to entry is rising from component supply to system-level liquid cooling solutions.
* Consolidation Trend: M&A activity in the sector indicates companies are expanding product portfolios and strengthening customer relationships. We expect alpha generators to emerge in 2026.

Recommendations:
1. Component Suppliers entering Global Chains: Focus: Kechuang Xinyuan. Watch: Envicool, Yidong Electronics, Siquan New Material.
2. IDC Solution Providers: Benefiting from capex increases. Focus: Shenling Environment. Watch: Chuanrun Shares, Tongfei Shares, Gaolan Shares.
3. Equipment: Watch: Tsugami Machine Tool China, Genesis, Ningbo Jingda.
4. New Tech: Micro-channel, two-phase cold plates, immersion cooling.

6. Grid Equipment: Siyuan Electric’s Global Expansion Milestone

H-Share Listing:
Siyuan Electric announced plans to issue H-shares (up to 15% of post-issue capital). Proceeds will fund R&D, digitalization, supply chain enhancement, and overseas expansion.
* Strategic Shift: Moves from "Product Export" to "Capital + Capacity + Service" global expansion.
* Impact: Enhances international financing capabilities and brand endorsement. While EPS dilution is possible short-term, the long-term growth potential in global grid upgrades supports a higher valuation ceiling.

Sector Drivers:
1. AIDC Power: High demand for HVDC, SST, and supercapacitors. Focus: Jinpan Tech, Liangxin, Eaglerise, Mingyang Electric, Siyuan.
2. Transformer Exports: Jan-Oct 2025 exports reached $5 billion (+52% YoY). High technical barriers and labor shortages sustain high margins. Focus: Siyuan, Kelong.
3. UHV (Ultra-High Voltage): Approval and tendering accelerating in Dec 2025. 2025 equipment tender value expected to exceed 50 billion RMB. Focus: Siyuan, Changgao Electric.

7. Industrial Control: Recovery and Robotics Pivot

Trends:
* Domestic leading industrial control firms saw sequential order growth in November.
* 2026 Structural Opportunities: Driven by "AI+" manufacturing equipment, humanoid robots (pre-mass production), and solid-state battery pilot lines.
* Robotics: Companies are leveraging motor/drive/encoder technologies from industrial automation to enter the humanoid robot supply chain.

Recommendations:
* Focus: Inovance (Huichuan), Xinje Electric, Broad-Ocean Motor, Leadshine.
* Watch: Veichi Electric, Hongfa, Wolong Electric.

Risks / Headwinds

1. Policy Execution Risk: The energy transition relies heavily on policy support (subsidies, carbon targets). Delays or weaker-than-expected implementation of policies (e.g., green hydrogen subsidies, offshore wind permits) could dampen sector growth.
2. Intense Price Competition: Rapid capacity expansion in PV, Lithium, and Wind components, coupled with cross-industry capital entry, may lead to oversupply. This could trigger aggressive price wars, eroding profit margins beyond current expectations.
3. Geopolitical & Trade Barriers: Increasing trade protectionism (e.g., tariffs, local content requirements in US/EU) poses risks to Chinese exporters, particularly in batteries, PV modules, and grid equipment. Ford’s termination of the LGES deal exemplifies how policy and demand shifts can disrupt long-term contracts.
4. Technology Iteration Uncertainty: Rapid changes in technology (e.g., Solid-state batteries, Perovskite efficiency, Hydrogen fuel cell durability) carry execution risks. Failure to commercialize or scale new technologies efficiently could impact invested companies.
5. Raw Material Volatility: Fluctuations in lithium, cobalt, nickel, and polysilicon prices create uncertainty in cost structures and inventory valuation for mid-stream manufacturers.

Rating / Sector Outlook

(Note: Ratings are based on Sinolink Securities' internal methodology: Buy >15% outperformance; Overweight 5-15%; Neutral -5% to 5%; Underperform <-5% relative to market index over 3-6 months.)

Investment View

1. The "Space PV" Thesis: A Paradigm Shift in Valuation

Investors should re-evaluate PV companies not just through the lens of terrestrial utility-scale projects, but as critical enablers of the Commercial Aerospace ecosystem. The comparison to "AI Power" is apt: just as AI cannot scale without massive electricity, space infrastructure cannot exist without efficient, lightweight, and durable power generation.

• Why Now? The convergence of falling launch costs (SpaceX, emerging Chinese competitors), strategic government mandates (US Executive Order, China’s satellite constellation plans), and technological maturity (Perovskite/Silicon tandems) creates a unique inflection point.
• Valuation Reset: Traditional PV valuations are depressed due to ground-based oversupply. Space PV offers a new pricing logic—higher margins, specialized requirements, and strategic value—that is not yet fully priced in.
• Action: Accumulate positions in companies with proven space-grade technology or strong R&D pipelines in lightweight/flexible PV. Junda Shares and Risen Energy are notable for their advanced cell technologies. Maxwell Technologies provides the necessary equipment for next-gen cell production.

2. Wind Power: Riding the European Wave & Domestic Margin Repair

The wind sector is transitioning from a period of price wars to one of profitability restoration.

• Europe: The Poland auction confirms that European offshore wind is moving forward despite earlier cancellations. The 2031-2032 timeline provides a clear visibility window for order books. Orient Cable is a prime beneficiary, given its recent large overseas win and technical moat in HVDC submarine cables. Dajin Heavy Industry benefits from the global demand for monopiles and towers.
• China: Domestic onshore wind bidding prices have stabilized and are showing signs of recovery. Combined with the acceleration of offshore projects in Guangdong, Jiangsu, and Shandong, OEMs like Mingyang Smart Energy and Goldwind are seeing improved order quality. The "Two Seas" strategy (Offshore + Overseas) is delivering higher-margin revenues, which will flow through to earnings in H2 2025 and 2026.

3. Hydrogen: From Hype to Commercial Reality

The CMB.Tech-CEEC deal is a watershed moment. It moves green ammonia from a "concept" to a "tradable commodity" with a verified end-user.

• Green Ammonia/Methanol: The supply-demand imbalance is stark. With hundreds of methanol/ammonia-ready ships ordering in the next 2-3 years, and limited green fuel production capacity, producers with ISCC certification and integrated supply chains will command premium pricing. CEEC (via its listed subsidiaries or partners) and Goldwind (with its green hydrogen/ammonia projects) are well-positioned.
• Electrolyzers: The bottleneck for green fuel production is green hydrogen. As projects break ground in H2 2025, electrolyzer manufacturers like Huadian Kegong and Shuangliang will see order backlogs grow.
• Fuel Cells: The pivot to stationary power (data centers) by companies like FuelCell Energy validates the technology’s versatility. In China, policy-driven commercial vehicle adoption remains the near-term driver, benefiting SinoHytec and Refire.

4. Lithium: Tactical Trade on Supply Shock, Strategic Caution on Demand

The current rally in lithium prices is primarily supply-driven (Jiangxi mine delay) rather than demand-driven.

• Short-Term: With inventory low and traders holding limited stock, prices may remain firm or rise slightly in Q1 2026. This benefits miners and salt producers with existing inventory or low-cost production (e.g., Salt Lake Industry, Tianqi).
• Medium-Term: The termination of the Ford-LGES deal is a warning sign. Global EV growth is slowing, and OEMs are reassessing battery sourcing strategies. Overcapacity in the battery cell sector persists. Therefore, we prefer integrated leaders with strong cost control and diversified customer bases, such as CATL and EVE Energy, over pure-play material suppliers who are more exposed to price volatility.
• Solid-State: Geely’s progress highlights the race for next-gen batteries. While commercialization is still years away, companies involved in the supply chain of solid-state materials (sulfides, oxides, special anodes) deserve monitoring.

5. Grid & AIDC: The Invisible Backbone of AI

AI’s physical constraint is power and heat. This creates a dual opportunity for the grid and cooling sectors.

• Liquid Cooling: As chip TDPs (Thermal Design Power) rise, air cooling becomes insufficient. The shift to liquid cooling (cold plate, immersion) is inevitable. Chinese companies have cost and manufacturing advantages. The key is moving up the value chain from components to system integration. Shenling Environment and Envicool are leaders here. The recent Supermicro/xAI deal confirms the trend.
• Grid Equipment: Global grids are aging and need upgrades to handle renewable intermittency and AI load growth. Siyuan Electric’s H-share listing is a strategic move to fund this global expansion. Transformers are in a structural shortage globally, supporting high margins for exporters like Siyuan and Jinpan Tech.

6. Portfolio Strategy

We recommend a barbell strategy:
1. Growth/Theme: Overweight Space PV and Liquid Cooling for high-beta exposure to the AI/Aerospace megatrends.
2. Value/Recovery: Overweight European Offshore Wind supply chains and Grid Equipment exporters for steady earnings growth and visibility.
3. Tactical: Maintain a neutral-to-positive stance on Lithium, focusing on top-tier integrators, while being selective in Hydrogen (favoring those with actual off-take agreements).

Top Conviction Picks:
* Siyuan Electric: Comprehensive global expansion, strong grid fundamentals.
* Orient Cable: Monopoly-like position in high-voltage submarine cables, benefiting from both domestic and European offshore wind.
* Mingyang Smart Energy: Leading offshore turbine OEM with strong overseas order book.
* CATL: Dominant battery leader, resilient to market fluctuations, innovating in solid-state.
* Shenling Environment: Pure play on AIDC liquid cooling, benefiting from AI capex surge.

Detailed Sub-Sector Analysis & Data

Photovoltaics & Storage: 2026 Strategy Preview

Core View:
The industry is undergoing a painful but necessary supply-side clearing. Strict production limits and price controls are expected to help the industry return to profitability in 2026. Market demand expectations are currently at rock bottom. However, the convergence of global AI infrastructure build-out, manufacturing recovery, and new domestic models (green power direct connection, mandatory storage) could lead to demand exceeding expectations. This "demand expectation repair" will trigger a beta opportunity for the sector.

Key Lines of Interest:
1. Cost Leaders: Integrated leaders (Sungrow, Canadian Solar, CATL), Glass (Xinyi, Flat), Low-cost Polysilicon (Tongwei, GCL), High-efficiency Cells/Modules (Junda, AiXu, JA Solar).
2. Technology Iteration: Equipment for crystalline silicon upgrades and Perovskite/Tandem cells (Maxwell, Autowell, JieJia, DR Laser).
3. Second Growth Curves: Companies expanding into semiconductors, robotics, or AI power electronics (Foster, Hengdian, Yongzhen, Juhe).

Price Trends (Week of Dec 17, 2025):
* Polysilicon: Stable. Prices above cash cost for top tier.
* Wafers (183N): Stable. Prices cover full cost for leaders.
* Cells (183N): +7% WoW. Prices rising due to silver cost pressure and top-tier manufacturers refusing orders below 0.3 RMB/W.
* Modules (183N): Stable. Profitability under pressure except in high-margin overseas markets.
* Glass: Stable. Inventory days increased to 35.92 days.
* EVA Film: Prices declining due to weak demand.

(See Charts 1-8 in original report for detailed price history)

Wind Power: Order Book Acceleration

Europe:
* Poland Auction: 3.4GW awarded. CfD prices €113-117/MWh. Grid connection 2032. Orders for foundations/cables expected from 2027.
* Outlook: 2031-2032 annual grid connection >14GW.

China:
* Onshore: Bidding prices recovering. Margin repair expected in H2 2025/FY2026.
* Offshore: Construction accelerating in key provinces. Q3/Q4 volume spike for pile/cable manufacturers.

Company Updates:
* Orient Cable: Won RMB 1.9B overseas EPCI contract. Strong momentum in international markets.
* OEMs: Goldwind, Yunda, Mingyang, Sany. Benefiting from mix shift to higher-margin offshore and overseas orders.

Hydrogen & Fuel Cells: Commercial Breakthroughs

Green Ammonia:
* Deal: CMB.Tech buys 158k tons from CEEC (Jilin). Start 2026.
* Impact: Validates green ammonia as marine fuel. Boosts demand for upstream green hydrogen and electrolyzers.

FuelCell Energy (FCEL):
* Pivot: AI Data Center power solutions.
* Financials: Revenue up, losses narrowing. Market re-rating based on AI narrative.

Investment Focus:
1. Green Methanol/Ammonia Producers: Short-term supply deficit. High premiums. (Goldwind, Jidian, CIMC).
2. Electrolyzers: Demand surge in H2 2025. (Huadian, Huaguang, Shuangliang).
3. FCV Components: Policy-driven volume growth in 2025. (SinoHytec, Guofu).

Lithium Batteries: Supply Shock & Strategic Shifts

Price Dynamics:
* Carbonate: Futures >110k RMB/ton. Spot ~101.5k RMB/ton.
* Driver: Jiangxi mine restart delayed to Q2 2026. Low inventory.

Corporate Actions:
* Ford/LGES: Termination of $6.9B deal. Reflects cautious EV outlook in West.
* Geely: Solid-state battery pilot project. 60Ah cells in verification.

Material Chain:
* Cobalt: Tight supply, rising prices.
* LFP: Strong demand, cost-push price increases.
* Anode: Stable prices, margin pressure.
* Separators: Tight supply for high-end wet process. Head players at full capacity.

AIDC Liquid Cooling: Global Share Gain

Catalysts:
* Supermicro/xAI GW-level deal.
* Overseas factory audits of Chinese suppliers.

Logic:
* Shift from component supply to system-level solutions.
* Domestic companies gaining share in North American CSP supply chains.
* M&A activity to consolidate capabilities.

Pick:
* Kechuang Xinyuan: Component supplier entering global chain.
* Shenling Environment: IDC solution provider.

Grid: Global Expansion

Siyuan Electric:
* H-share issuance for global expansion (Capital + Capacity + Service).
* Enhances financing and brand.

Sector Drivers:
* AIDC power demand.
* Transformer export shortage.
* UHV acceleration in China.

Appendix: Recommended Portfolio

(Note: Investors should conduct their own due diligence. This report is for informational purposes only and does not constitute investment advice.)

Disclaimer

This report is prepared by Sinolink Securities Research Institute. The analysts certify that the views expressed in this report accurately reflect their personal views about the subject securities or issuers. The compensation of the analysts is not directly or indirectly related to the specific recommendations or views contained in this report.

Risk Disclosure:
* Policy Risk: Changes in government subsidies, carbon targets, or trade policies could adversely affect the industry.
* Competition Risk: Overcapacity may lead to price wars and margin compression.
* Technology Risk: Failure to adopt new technologies (e.g., solid-state, perovskite) could render existing assets obsolete.
* Market Risk: Stock prices are subject to market volatility, macroeconomic conditions, and investor sentiment.

Copyright:
This report is copyrighted by Sinolink Securities Co., Ltd. Unauthorized reproduction, distribution, or citation is prohibited. For qualified investors only.