CITIC SEC's research report on the new energy industry's 2025 and 2026 Q1 performance highlights: 1) The energy storage segment is experiencing a significant upturn, with residential storage maintaining stable profits and utility-scale storage awaiting a turning point in cost pass-through. 2) The wind power sector has established a clear earnings inflection point, with volume and price increases alongside expansion in overseas and offshore wind businesses driving continuous profit recovery. 3) The photovoltaic sector is in a phase of bottoming out and recovery, with narrowing losses in the main supply chain, auxiliary materials showing early signs of rebound, and industry risks gradually being cleared. Overall, the three major segments—wind, solar, and storage—exhibit structural differentiation, with energy storage and wind power demonstrating prominent allocation value due to their earnings certainty. Meanwhile, potential reversal signals in the photovoltaic industry warrant attention. CITIC SEC's key views are as follows:
Energy Storage: Significant Upturn in Momentum with Divergent Profitability. For 2025 and 2026 Q1, the overall momentum of the energy storage segment has significantly improved, with revenue maintaining rapid growth and profitability showing a clear divergence between user-side and utility-scale storage. User-side storage benefits from recovering overseas demand, rising contract liabilities, and diluted expense ratios, entering a sustained upward trajectory. Utility-scale storage faces profit pressure from rising lithium carbonate prices and gross margin fluctuations due to overseas revenue recognition timing. However, strong demand is supported by global new energy infrastructure and grid expansion. Leading companies, through price locking and overseas volume expansion, are expected to reach a profitability turning point, further solidifying the segment's growth certainty.
Wind Power: Continuous Profit Improvement with Clear Growth Trend. For 2025 and 2026 Q1, both revenue and net profit in the wind power sector accelerated growth, with profitability improving simultaneously for both complete machines and components. Industry orders and contract liabilities saw substantial increases, and wind turbine bidding prices have bottomed out and started to rise. The rising proportion of "dual offshore" (overseas + offshore wind) business is driving optimization of the profit structure. The synergy between component exports and complete machine profit recovery is expected to lead to a dual enhancement in sector valuation and earnings, marking a comprehensive return of growth attributes.
Photovoltaics: Bottoming Out and Recovery Underway, Marginal Improvements Anticipated. The main photovoltaic supply chain was in a bottoming-out and recovery phase during 2025 and 2026 Q1, with contracting revenue and narrowing losses. Asset impairment and inventory devaluation risks are gradually being released, and financial structures show marginal improvement. The auxiliary materials segment was the first to rebound from the bottom, showing positive signals in both revenue and profitability. The equipment segment remains at a cyclical low, with weak downstream expansion suppressing demand. As prices stabilize, outdated capacity is phased out, and technological iteration progresses, the industry is transitioning from deep adjustment to marginal recovery, gradually establishing a trend toward high-quality development.
Investment Strategy: Reviewing the 2025 and 2026 Q1 financial performance, the three major segments—wind, solar, and storage—show structural differentiation. Energy storage and wind power, with their earnings certainty, highlight prominent allocation value. Meanwhile, potential reversal signals in the photovoltaic industry should be monitored. 1) Energy Storage: Driven by urgent needs such as new energy consumption pressure, overseas power shortages, and AI data center (AIDC) storage allocation, coupled with accelerating improvements in profit models, energy storage installation demand continues to grow rapidly. 2) Wind Power: For components, beta depends on overseas expansion, while alpha relies on product upgrades; for complete machines, domestic price and profitability are expected to recover, and accelerated expansion in "dual offshore" business will drive dual improvement in profits and valuation. 3) Photovoltaics: Benefiting from price stabilization and steady technological upgrades, the industry is poised for high-quality development.
Risk Factors: Risks include lower-than-expected growth in wind and solar demand; slower-than-expected progress in price recovery for products such as photovoltaic modules, wind turbines, and energy storage systems; significant increases in raw material prices; further escalation of overseas trade barriers; and slower-than-expected progress in overseas market expansion and product delivery.
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