Soochow Securities Power Equipment Weekly: Bright Lithium Battery Q3, Rebound in Sight; Transformer Exports and Energy Storage Stay Hot
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Soochow Securities' power equipment weekly notes the sector outperformed the market, led by lithium batteries (+3.33%). Energy storage demand continues to grow: September domestic large-scale storage EPC tendered and awarded capacity rose 56% and 118% year over year, respectively. EVs entered peak season, with September lithium chain scheduling up modestly month over month and demand resilient; valuations have corrected to low levels while leading names show clear sequential earnings growth, supporting an anticipated rebound. PV chain prices remain depressed amid soft demand, with no clear earnings inflection yet. Manufacturing PMI recovered to 50.1%, pointing to improving industrial-control demand; wind tenders fell year over year, though the offshore wind action plan advanced. Overseas compute upgrades are driving AIDC and transformer export demand, while storage benefits from a lower lithium carbonate price center. Soochow forecasts lithium battery demand growth of 35-40% in 2026 and above 25% in 2027, and global storage installations up over 60% in 2026 with a 20-40% CAGR over 2027-30. Picks: CATL (global power and storage battery leader, low valuation), Sungrow (global PV-plus-storage leader, earnings inflection near, AIDC potential), Enjie (separator tightness), Inovance (automation recovery plus humanoid and AIDC), and Sieyuan Electric (fast order growth).
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