China Galaxy Securities released a research report highlighting key takeaways from the Central Economic Work Conference held in Beijing from December 10 to 11. The conference outlined the Energy Power Construction Plan, accelerating the development of a new energy system and expanding green electricity applications. New energy remains central to the 15th Five-Year Plan, with a focus on new quality productive forces and anti-involution. Sectors such as wind-solar-storage, AIDC, lithium batteries, and robotics are expected to benefit significantly.
**Key Insights:** 1. **Energy Power Strategy Upgrade:** The conference introduced the "Energy Power Construction Plan," elevating energy strategy from defensive "energy security" to proactive "energy leadership," aligning it with manufacturing and technological power.
2. **New Energy and Green Transition Priorities:** - Accelerate new growth drivers, deepen "AI+" integration. - Reform market regulations to curb "involution-style" competition. - Promote high-quality marine economy development. - Advance green transformation under the "dual-carbon" goal.
**Anti-Involution to Boost Profitability in Wind, Solar, and Lithium Sectors:** The conference emphasized curbing cutthroat competition, addressing oversupply in wind, solar, and lithium industries. Policy-driven capacity optimization has already led to price recoveries in wind turbines, silicon materials, and lithium battery segments. Supply-side reforms are expected to progress steadily.
- **Wind Power:** Annual新增装机 of 120GW (15GW offshore), with offshore and export markets lifting profits. - **Solar:** Global demand remains stable, though China may see a slowdown to 230–250GW by 2026 due to tariff reforms. Long-term growth hinges on cost reductions, storage integration, and grid upgrades. - **Lithium Batteries:** Rebalancing underway; demand recovery could drive volume and margin growth.
**AIDC, Grid, and Storage: Foundational Growth:** 1. **AIDC:** AI-driven demand boosts data centers, with 800V HVDC power systems and solid-state transformers (SST) as future trends. Power equipment and storage solutions stand to gain. 2. **Grid Modernization:** Renewable integration and AI expansion fuel investments in ultra-high-voltage and smart grids. 3. **Storage:** Global expansion continues, with China shifting from policy-driven to profit-driven models. Residential and commercial storage show 30% CAGR potential; overseas markets favor large-scale and emerging segments.
**Innovation Frontiers: Embodied AI, Hydrogen, and Fusion Energy:** The conference stressed innovation, naming hydrogen, nuclear fusion, and embodied AI as future growth pillars. 1. **Embodied AI:** Poised to revolutionize robotics and autonomous driving, creating a trillion-yuan market. 2. **Hydrogen:** Policy support accelerates green hydrogen/ammonia/methanol projects. 3. **Fusion Energy:** China’s BEST project (2027 completion) aims for a demonstration reactor, marking a leap from实验堆to commercialization.
**Risks:** Policy delays, AI setbacks, and geopolitical tensions.
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