Valuation Summary - The overall valuation of A-shares as of March 20, 2026, shows the CSI All Share (excluding ST) PE at 21.7x and PB at 1.8x, positioned at the historical 81st and 43rd percentiles respectively [2] - The Shanghai Stock Exchange 50 PE is at 11.4x and PB at 1.3x, at the historical 57th and 34th percentiles [2] - The CSI 300 PE is at 14.0x and PB at 1.5x, at the historical 62nd and 36th percentiles [2] - The CSI 500 PE is at 35.1x and PB at 2.4x, at the historical 67th and 56th percentiles [2] - The ChiNext Index PE is at 41.2x and PB at 5.6x, at the historical 36th and 64th percentiles [2] Industry Valuation Comparison - Industries with PE valuations above the historical 85th percentile include Real Estate, Automation Equipment, Retail, IT Services, and Communication [2] - Industries with PB valuations above the historical 85th percentile include Electronics (Semiconductors) and Communication [2] - Industries with both PE and PB valuations below the historical 15th percentile include Securities, Food and Beverage, Medical Services, and White Goods [2] Industry Midstream Sentiment Tracking New Energy - In the photovoltaic sector, polysilicon futures prices fell by 11.8%, and spot prices dropped by 3.2%, indicating cautious demand from downstream [3] - Battery material prices, including lithium, have seen significant declines, with lithium carbonate down 3.9% [3] Technology TMT - The Philadelphia Semiconductor Index rose by 0.3%, while the Taiwan Semiconductor Index fell by 0.4% [3] - The DRAM price index increased by 4.1%, indicating a positive trend in semiconductor pricing [3] Real Estate Chain - The national average price of rebar fell by 0.4%, while cement prices increased by 1.3% as construction activity picks up [3] - Real estate sales area decreased by 13.5% year-on-year in January-February 2026, indicating ongoing challenges in the sector [3] Consumer Sector - The average price of live pigs fell by 1.8%, prompting government intervention to stabilize prices [3] - Retail sales grew by 2.8% year-on-year in January-February 2026, showing signs of recovery in consumer confidence [3] Midstream Manufacturing - Manufacturing investment grew by 3.1% year-on-year in January-February 2026, reflecting improved cash flow and external demand [3] - Industrial electricity consumption increased by 6.1% year-on-year, driven by higher manufacturing output [3] Cyclical Industries - Concerns over global economic stagnation have led to significant declines in metal prices, with COMEX gold down 10.6% and copper down 7.1% [3] - Brent crude oil prices rose by 0.5% to $104.41 per barrel, influenced by geopolitical tensions affecting supply [3]

Investment Rating - The report maintains a "Positive" investment rating for the utility sector in China [4] Core Insights - Electricity demand is on the rise, with a year-on-year increase of 6.1% in total electricity consumption for January and February 2026, compared to a 3.3 percentage point increase from December 2025 [8] - The growth in electricity consumption is attributed to a recovery in economic activity and a low base effect from the previous year [12] - Power generation growth has rebounded, with thermal power growth turning positive at 3.3% year-on-year for January and February 2026 [19] - The report highlights the potential for value reassessment of low-priced utility assets amid international order restructuring [8] - The report suggests that the utility sector remains a quality asset for investment, benefiting from the ongoing reforms in the electricity market [8] Summary by Sections Electricity Demand and Supply - Total electricity consumption increased by 6.1% year-on-year in January and February 2026, with significant growth in primary (7.4%), secondary (6.3%), and tertiary industries (8.3%) [8][12] - Power generation from large-scale power plants rose by 4.1% year-on-year, with thermal power showing a recovery [19] Investment Recommendations - The report recommends investing in the utility sector, particularly in thermal power companies such as: - Jiantou Energy (000600, Buy) - Huadian International (600027, Buy) - Guodian Power (600795, Buy) - Huaneng International (600011, Buy) - Anhui Energy (000543, Buy) [8] - For gas, companies like Shouhua Gas (300483, Not Rated) and Xintian Gas (603393, Not Rated) are highlighted as potential beneficiaries of rising natural gas prices [8] - In hydropower, quality assets in favorable basins are recommended for investment [8] Market Dynamics - The report notes a decline in the Shenyang spot electricity price by 14.2% year-on-year, while Shanxi's price increased by 26.3% year-on-year [31][33] - Coal prices have risen, with Qinhuangdao's Q5500 coal price at 735 RMB/ton, reflecting a 9.2% increase year-on-year [35] - Natural gas prices have surged, with the Dutch TTF gas price increasing by 18.2% week-on-week [48]

1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - Industrial silicon: The cost support is strengthening, and attention should be paid to supply disturbances. The current market is in a weakly oscillating pattern, and future trends depend on factors such as Xinjiang's resumption of production and polysilicon inventory reduction. New orders are recommended to wait and see, and previous long orders can gradually take profits [6][7]. - Polysilicon: The market is oscillating near the cost, and there are opportunities to build positions on dips. In the short term, it is expected to maintain a weakly oscillating pattern, and operations can be carried out along the cost - marginal valuation [13]. 3. Summary According to the Directory 3.1 Industrial Silicon Data Review 3.1.1 Spot Price Trends - As of March 20, 2026, the oxygen - passing Si5530 price in East China was 9,200 yuan/ton, with a week - on - week increase of 0.52; the Si4210 price was 9,600 yuan/ton, with a week - on - week increase of 1.63%; the Si4210 (for silicone) price was 9,850 yuan/ton, remaining flat week - on - week [31]. 3.1.2 Futures Price Trends - The main contract of industrial silicon futures declined unilaterally this week, with increasing volume and stable positions, and a slight rebound at the end. The price dropped from 8,685 yuan/ton to a low of 8,235 yuan/ton during the week and closed at 8,455 yuan/ton on Friday, with a cumulative decline of 230 yuan/ton and a decline rate of 2.65%. The trading volume gradually increased, and the open interest fluctuated slightly. The market was under pressure from increased supply in Xinjiang, slow recovery of downstream demand, and high social inventory [34]. 3.1.3 Supply - The total number of metal silicon furnaces is 796, and the number of operating furnaces this week increased slightly compared with last week, with an overall operating rate of 25.63%. The production in the northwest region increased, and the production in the southwest region also increased slightly. The national output this week was 66,300 tons, with a month - on - month increase of 0.38% [55][63]. 3.1.4 Cost - The power cost has strong support, the price of petroleum coke is firm, and the prices of silica and silicon coal are stable. The cost of industrial silicon this week decreased to 9,072.19 yuan/ton, and the profit was - 116 yuan/ton, showing a slight loss [79][83]. 3.1.5 Inventory - The social inventory decreased slightly to 509,700 tons, with a month - on - month decrease of 5.31%. The overall industry inventory remained at a high level, and the inventory pressure of manufacturers was relieved [91]. 3.1.6 Demand - The silicone market is in a weak consolidation state, with cost support but increasing supply - demand pressure. The aluminum alloy market has weak demand, and the spot aluminum price oscillates. The overall demand for industrial silicon is recovering slowly [100][122]. 3.1.7 Import and Export - In December 2025, China's industrial silicon exports were 59,000 tons, a month - on - month increase of 7.56% and a year - on - year increase of 2.45%. The total exports from January to December 2025 were 720,600 tons, a year - on - year decrease of 0.6% [92]. 3.2 Polysilicon Data Review 3.2.1 Price - The polysilicon market continued its weak downward trend this week. The spot price of P - type polysilicon in China was 36,000 yuan/ton, a decrease of 20,000 yuan/ton compared with last week; the spot price of N - type polysilicon was 41,500 yuan/ton, also a decrease of 20,000 yuan/ton compared with last week [134]. 3.2.2 Basis and Spread - The spread converged, and attention should be paid to downstream price - setting [138]. 3.2.3 Supply - New production capacity will contribute a small amount of output this month. The overall operating rate of the polysilicon industry is maintained at 30%. According to the current production plans of enterprises, the domestic polysilicon output in March is expected to recover to 85,000 - 90,000 tons, and the supply side may show a mild recovery [148]. 3.2.4 Inventory - The inventory this week was 372,900 tons, a month - on - month increase of 3.39%. The inventory pressure continued to be prominent, and it was difficult to reduce inventory in the short term [143]. 3.2.5 Cost and Profit - The average production cost of polysilicon this week was 44,189.79 yuan/ton, a month - on - month increase of 0.7%. The gross profit and gross profit margin recovered to 1,663.47 yuan/ton, a month - on - month decrease of 117% [154]. 3.2.6 Import and Export - In December 2025, China's polysilicon imports were 1,872.812 tons, a year - on - year decrease of 42.81% and a month - on - month increase of 77.5%. The total imports from January to December 2025 were 19,051.011 tons, a cumulative year - on - year decrease of 52.16%. The exports in December 2025 were 1,670.405 tons, a year - on - year decrease of 71.03% and a month - on - month decrease of 48.29%. The total exports from January to December 2025 were 25,115.565 tons, a cumulative year - on - year decrease of 37.25% [155][158]. 3.2.7 Demand - The silicon wafer enterprises' operating rate remained high in March, and the domestic silicon wafer output is expected to recover to 49GW. The battery cell market has low operating rates and weak demand. The component market's transaction prices are stable [160][135].

Investment Ratings - Electric Power Equipment: Buy (Maintain) [1] - Environmental Protection: Buy (Maintain) [1] Core Views - The report highlights the ongoing high-cut low market conditions, emphasizing energy security and performance as key investment themes. The Iranian situation has escalated, leading to increased focus on energy infrastructure and commodity prices, with significant volatility in the market. The current market is prioritizing performance metrics [2]. - In the electric power sector, the North American electricity shortage chain, which previously had high valuations, is undergoing adjustments. The sectors related to energy crises, particularly household/commercial storage and European offshore wind, are performing well. The photovoltaic sector has seen a rebound due to Tesla's procurement plans for solar equipment [2]. - The report suggests focusing on companies like DeYue Co., Daikin Heavy Industries, TianShun Wind Energy, Airo Energy, and GoodWe in the energy storage and offshore wind sectors, as they are expected to benefit from sustained demand even post-conflict [2]. - The photovoltaic sector is anticipated to see continued catalysts if North American orders are fulfilled, with key companies to watch including JinkoSolar, Foster, JinkoSolar, and Laplace [2]. - The lithium battery and energy storage sectors are highlighted for their strong performance in upcoming financial reports, with companies like CATL, Defu Technology, and Sungrow Power to be monitored closely [2][3]. Summary by Sections Electric Power Equipment - The North American electricity shortage logic remains strong, with high volatility expected in high-valued stocks. The report recommends focusing on undervalued electric power equipment stocks such as Teradyne, Siyuan Electric, and Sifang Co. [3]. Energy Storage - Domestic energy storage capacity pricing policies have been released, and there is ongoing discussion about their impact on installations in 2026/27. Key indicators to monitor include regional coal power pricing, project lists, and market price differentials. The report suggests that low-valuation leading stocks in energy storage are likely to rebound [6]. - In the overseas market, the logic of electricity shortages in the U.S. is expected to continue, with significant potential for rebounds in North American energy storage stocks [6]. - The U.K.'s "Warm Homes Plan" and ongoing energy repairs in Ukraine are expected to sustain demand for household storage solutions [6]. Wind Power - According to the National Energy Administration, China's onshore wind power installations are projected to reach 110.0 GW in 2025, a year-on-year increase of 45.14%, while offshore wind installations are expected to reach 6.6 GW, a 63.12% increase [7]. - The report indicates that the wind power sector is experiencing a high degree of project releases, with significant growth expected in installations from 2026 to 2030 [18]. Photovoltaics - The report notes that prices across the photovoltaic supply chain are stabilizing but under pressure due to weak demand and high inventory levels. The silicon material prices have been declining, while the prices for silicon wafers have stabilized [27]. - The report emphasizes that all segments of the photovoltaic industry are currently facing operational pressures, with no profits reported as of March 18, 2026 [27].

Investment Rating - Industry Rating: Recommended [7] Core Insights - The report highlights a clear trend towards localization in North American photovoltaic manufacturing, with production equipment and auxiliary materials being the first to benefit from the surge in procurement demand due to overseas capacity expansion [15][17]. - Rising natural gas prices in Europe are expected to increase end-user electricity costs and intensify supply risks, thereby enhancing the economic value of household and commercial energy storage solutions [3][17]. - The European offshore wind power market is projected to experience rapid growth from 2026 to 2030, driven by the need for energy independence and limited local capacity expansion [4][22]. - The demand for transformers and other electrical equipment is robust, with a significant year-on-year increase in exports, particularly to North America and Europe [5][40]. Summary by Sections 1. New Energy - North American photovoltaic manufacturing is seeing a clear localization trend, with production equipment as the leading beneficiary of procurement demand [15]. - The report anticipates that auxiliary materials such as films, frames, and silver paste will also benefit from this capacity expansion [15][16]. - Beneficiary companies include Yongzhen Co., Dike Co., and Foster [2][16]. 2. Power Equipment & AIDC - In the first two months of 2026, China's transformer export value increased by approximately 36% year-on-year, with significant growth in oil transformers and dry transformers [5][40]. - The report emphasizes the potential for companies that can penetrate the North American market, particularly focusing on the main transformer supply [5][40]. - Key companies to watch include Siyuan Electric [5]. 3. New Energy Vehicles - The report notes that advancements in battery technology are enhancing the cost-performance ratio of new energy vehicles, with new models expected to drive production increases [6][44]. - The supply-demand balance is expected to tighten, leading to a trend of rising prices and volumes in key components such as copper foil and separators [6][45]. - Beneficiary companies include CATL, EVE Energy, and others involved in battery production [50]. 4. Offshore Wind Power - The report indicates that the European offshore wind market is set for significant growth, with expectations of new installations from 2026 to 2030 [4][22]. - Companies with cost control and stable delivery capabilities are expected to benefit from this growth, including Daikin Heavy Industries and others [4][22].

Investment Rating - The report maintains an "Overweight" rating for the electric equipment industry [5] Core Insights - Tesla plans to procure $2.9 billion worth of photovoltaic equipment, indicating strong demand in the solar sector [1] - The UK offshore wind sector is expected to accelerate with the early launch of AR8, highlighting growth opportunities in wind energy [1] - The report emphasizes the importance of key players in the lithium battery, energy storage, and electric equipment sectors, suggesting potential investment opportunities [7][23] Summary by Sections Lithium Battery Sector - The battery industry index decreased by 0.71%, but the lithium battery sector showed strong performance with significant gains in key stocks like Fulin Precision (+20.3%) and Wanrun New Energy (+6.4%) [11] - The ongoing geopolitical tensions in the Middle East are impacting lithium battery material costs, particularly for iron-lithium [13] - A new project by Jiujiang Tinci to produce 500,000 tons of electrolyte annually is set to commence in March 2026, significantly boosting supply [16] - The demand for 5μm separators is rapidly increasing, with limited companies capable of stable production, leading to a 60% price premium over standard products [17][18] Energy Storage Sector - Global energy storage battery shipments are projected to reach 550 GWh in 2025, a 79% increase from 2024, with major contributions from Chinese companies [23] - The average bid for a large-scale energy storage project in Zhangjiakou ranges from 0.479 to 0.577 yuan/Wh, indicating competitive pricing in the market [24] Electric Equipment Sector - The State Grid is accelerating investment in power grid construction, with a reported 80.6% increase in fixed asset investment in the first two months of the year [28] - New regulations in Shandong allow energy storage to participate in both energy and ancillary service markets, enhancing revenue opportunities for storage facilities [25][27] Photovoltaic Sector - Recent reports indicate a decline in silicon material prices, with multi-crystalline silicon averaging 45.0 yuan/kg, reflecting a supply-demand imbalance [29] - Tesla's procurement plans signal a robust outlook for the photovoltaic equipment market, with key players identified for investment [1][7]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The European energy crisis is expected to boost demand for renewable energy, with the UK launching AR8 to accelerate offshore wind development and enhance renewable energy deployment [1] - The construction of data centers in the US has surpassed traditional office buildings for the first time, driven by a 29% year-on-year increase in project value to $45.1 billion, reflecting the growing demand for AI-driven computing infrastructure [2] - The "14th Five-Year Plan" emphasizes the synergy between computing and electricity, aiming for a significant increase in non-fossil energy and the establishment of a new energy system [4] Summary by Sections Renewable Energy - The UK plans to start AR8 in July 2026, introducing several energy initiatives, with recommendations for wind energy companies such as TianShun Wind Energy and MingYang Smart Energy [1] - The European energy crisis, exacerbated by US-Iran tensions, has led to a spike in natural gas prices, increasing storage demand and highlighting the economic viability of energy storage solutions [1] Data Centers and AI Infrastructure - The value of data center projects in the US has increased by 29% year-on-year to $45.1 billion, marking a historic shift in investment focus from traditional office spaces to data centers [2] - Companies recommended for investment in the AI computing infrastructure include Shenma Electric and Dongfang Electric [2] Battery Technology - Chery is accelerating the validation of solid-state batteries, aiming for market introduction by 2027, while BASF has entered the sodium-ion battery sector through a partnership with Sichuan Starry Sky [2] - Recommendations for copper foil companies include Copper Crown and DeFu Technology, while the electric vehicle sector includes Ningde Times and Enjie [2] Industry Standards and Regulations - The Ministry of Industry and Information Technology is working on national standards for photovoltaic components to enhance safety and regulatory compliance in the solar industry [4] - The report highlights the importance of establishing a unified electricity market system and promoting market-oriented pricing mechanisms for various energy sources [4] Market Trends - The report notes a significant increase in the export of new energy vehicles, with February exports reaching 269,000 units, a year-on-year increase of 124.2% [9][10] - The photovoltaic industry is experiencing price fluctuations, with silicon material prices declining and battery cell prices also showing downward trends [15][33]

Investment Rating - Maintain "Buy" rating for the industry [4] Core Views - The report highlights the upward trend in overseas photovoltaic module prices and the profitability potential in lithium battery materials due to rising oil prices [1] - The report emphasizes the importance of supply-side reforms and technological advancements in the renewable energy sector, particularly in photovoltaic and wind energy [2][3] Summary by Sections 1. New Energy Generation Photovoltaic - The price of polysilicon n-type feedstock has decreased to a range of 42,000-45,000 RMB per ton, with an average price of 43,200 RMB per ton, down 4.42% week-on-week [15] - The market for battery cells has seen a decline in prices due to reduced purchasing activity ahead of the cancellation of export tax rebates [15][16] - Key companies to watch include Tongwei Co., GCL-Poly, LONGi Green Energy, JA Solar, JinkoSolar, and Trina Solar for supply-side reform opportunities [1][16] Wind Power & Grid - The UK has accelerated its renewable energy auction (AR8) to July, which is expected to exceed previous expectations due to the urgent need for energy security [2][17] - The report suggests focusing on companies involved in offshore wind turbine manufacturing and related technologies, such as Goldwind, SANY Heavy Industry, and Mingyang Smart Energy [18][19] Hydrogen & Energy Storage - The first large-scale photovoltaic hydrogen production project in China has successfully completed its initial hydrogen filling task, marking a new phase in hydrogen production [20] - In the first two months of 2026, new energy storage installations reached 9.51 GW/24.18 GWh, representing a year-on-year increase of 182% in power and 472% in capacity [21] - Companies to focus on include Sungrow Power Supply, Aiko Solar, and CATL for energy storage opportunities [21] 2. New Energy Vehicles - In January and February 2026, the sales of power batteries in China reached 262.0 GWh, a 54% increase year-on-year, with significant growth in both power and energy storage batteries [22] - The average battery capacity of new energy vehicles has increased to 75.9 kWh, up 52.6% year-on-year, driven by regulatory changes [22] - Companies to watch include CATL, BYD, and EVE Energy for potential growth in the battery sector [23] 3. Price Dynamics in the Photovoltaic Industry Chain - The report provides detailed price movements for various components in the photovoltaic supply chain, indicating a mixed trend with some prices stabilizing while others are declining [26] 4. Important News of the Week - The report summarizes significant developments in the new energy sector, including major orders and project approvals, highlighting the ongoing growth and investment in renewable energy technologies [27][28]

Group 1 - The market is still confirming the expectation gap regarding the ongoing Middle East conflict, which has expanded in intensity and scope, affecting energy facilities, shipping, and regional political structures [4][13][14] - Since 2020, A-shares have shown resilience against global public events, with negative impacts typically concluding within a week. During prolonged shocks, the strategy should focus on reducing positions and controlling risks [19][20] - The next significant signal for market recovery is expected to be the convergence of oil price volatility rather than the final price level itself [23][24] Group 2 - In the adjustment phase, dividend stocks are favored, particularly during the late stages of a bear market, where their relative return advantages are amplified. However, dividend assets remain risk assets and may not provide absolute returns [6][27] - Industry performance during external shocks has shown that sectors with independent industrial prosperity perform best. For instance, during the Ukraine conflict, sectors like pharmaceuticals and energy security (coal) excelled, and similar trends are expected in the current Middle East situation [6][32][33] - The investment strategy emphasizes a defensive approach before the next major signal appears, focusing on high-dividend stocks and sectors benefiting from rising industrial demand and energy security [44] Group 3 - Historical analysis indicates that A-shares have become more resilient to external shocks since 2020, with a significant reduction in the duration and magnitude of declines during such events [22][24] - The probability of index recovery after external shocks has increased, with most indices recovering to pre-shock levels within one month, particularly in the current bull market context [25][24] - The report suggests that the current geopolitical risks primarily affect China indirectly, with manageable energy dependencies and a supportive regulatory environment aiding market stability [42][43]

Investment Rating - The report maintains a positive investment outlook on the wind power sector, particularly emphasizing the European offshore wind supply chain and the overall wind power segment [2][9][10]. Core Insights - The ongoing escalation of the Middle East situation highlights the need for higher levels of electrification and renewable energy utilization as the only way for many countries lacking oil and gas resources to enhance energy security [6][8]. - The cost of wind and solar energy storage is at historical lows, which may lead to quicker government incentives and increased orders for related equipment manufacturers due to the recent geopolitical tensions [6][7]. - The report emphasizes the importance of the European offshore wind sector as a key area for investment, driven by data center demand and geopolitical energy independence concerns [9][10]. Wind Power - The UK government has announced the acceleration of the AR8 auction to July this year, reaffirming the recommendation for the European offshore wind export chain [9][10]. - The demand for data centers and the geopolitical push for energy independence will continue to drive long-term growth in the European offshore wind sector [9][10]. Solar & Energy Storage - The report highlights the renewed interest in space-based solar initiatives, with companies like Nvidia and Blue Origin making significant advancements [11][12]. - Aiko Solar has secured contracts for 6GW of high-efficiency modules, indicating strong market demand for BC+ silver-free products expected to accelerate in 2026 [11][14]. Hydrogen and Fuel Cells - The establishment of hydrogen application pilot projects and government subsidies signal a trend towards large-scale industrial development in hydrogen applications [17][18]. - The report recommends focusing on green methanol, electrolyzers, and fuel cells as core areas with high elasticity and economic viability [17][18]. Power Grid - Significant contracts have been signed by companies like Siyi Electric in Romania, indicating a strong push into the overseas energy storage market [19][20]. - The implementation of high-capacity solid-state transformers is expected to accelerate, with a focus on enhancing energy efficiency in the power grid [19][20]. Lithium Battery - The lithium battery industry is experiencing a recovery in demand, with a focus on solid-state batteries and new technologies [28][29]. - Companies like EVE Energy are advancing in solid-state battery production, indicating a competitive shift towards technological upgrades and globalization [28][29]. Investment Recommendations - The report recommends specific companies across various sectors, including wind power (e.g., Goldwind Technology, Mingyang Smart Energy), solar (e.g., LONGi Green Energy, Trina Solar), energy storage (e.g., Sungrow Power Supply), and hydrogen (e.g., Keyou) [31][32].