Huatai Securities: Optimistic about the recovery of wind power and photovoltaic profits by 2026; space photovoltaics may create new business models

Huatai Securities points out that recently, wind power and photovoltaic companies have successively disclosed their 2025 performance forecasts. Based on expected performance, in Q4 2025, wind turbines may face pressure on profitability due to the concentrated delivery of low-priced domestic land-based wind projects, and losses among photovoltaic companies are generally increasing, mainly due to the sharp rise in silver prices leading to higher battery module costs. Looking ahead to 2026, Huatai Securities reaffirms the trend of profit recovery in the wind and photovoltaic sectors: 1) Wind turbine order prices have continued to rebound since Q4 2024. Considering that the delivery of previously low-priced orders is nearing completion, the gradual delivery of price-increased orders supports profit recovery. 2) Under the expectation of declining photovoltaic demand, the supply chain may strengthen quality and cost control, accelerate the introduction of high-power products and base metals, which is expected to drive profit recovery. Meanwhile, space photovoltaics may create new business models; recently, SpaceX announced the acquisition of xAI to build a space-ground-computing ecosystem. Leading photovoltaic companies have deep R&D accumulation and significant cross-sector advantages, and wind power companies may benefit from forward-looking investment layouts.

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Huatai | Electric Power & New Energy: Optimistic About 2026 Wind and Photovoltaic Profit Recovery

Key Points

Recently, wind power and photovoltaic companies have successively disclosed their 2025 performance forecasts. Based on expected results, in Q4 2025, wind turbines may face profitability pressure due to the concentrated delivery of low-priced domestic land-based wind projects, and losses among photovoltaic companies are generally increasing, mainly due to the sharp rise in silver prices leading to higher battery module costs. Looking ahead to 2026, we reaffirm the profit recovery trend in the wind and photovoltaic sectors: 1) Wind turbine order prices have continued to rebound since Q4 2024. As the delivery of earlier low-priced orders approaches completion, the gradual delivery of price-increased orders supports profit recovery. 2) With expectations of declining photovoltaic demand, the supply chain may enhance quality and cost control, accelerate the adoption of high-power products and base metals, which is expected to drive profit recovery. Additionally, space photovoltaics may develop new business models; recently, SpaceX announced the acquisition of xAI to create a space-ground-computing ecosystem. Leading photovoltaic companies have strong R&D foundations, with significant cross-sector advantages, and wind power companies may benefit from strategic investment layouts.

Wind Power: Rising turbine order prices support industry chain profit recovery

Looking back at Q4 2025, OEMs faced pressure on gross margins due to the concentrated delivery of low-priced domestic land-based wind projects. Coupled with the transfer of power station units after Document 136, profits per unit may have declined, leading to performance below Wind’s consensus expectations. In component segments, seasonal factors caused revenue to fall, and performance was slightly below expectations. Some companies were constrained by fewer offshore wind shipments, impairment provisions from strategic transformations, and increased capacity investments, which short-term compressed profit margins. Looking ahead to 2026, the delivery of wind turbine orders with rising prices is expected to support profit recovery across the industry chain, with accelerated offshore wind project commencements laying a foundation for continued installed capacity growth.

Photovoltaics: Gross margin and cash flow may be the company’s lifeline

Reviewing Q4 2025, the sharp rise in silver prices pushed up battery module costs. As of the end of December, the Shanghai Silver Index was 23,117, up 56% from the end of September. Calculated at 9-10 mg of silver per watt, this corresponds to a 5-6 cents/W increase in battery module costs. Additionally, rising polysilicon prices increased costs and reduced production, raising unit costs and widening industry chain losses. Since 2026, silver prices have further increased, intensifying the demand for silver reduction in battery modules. Companies like Jinko Solar, Longi Green Energy, and Trina Solar are expected to achieve mass production of base metal products in the first half of the year, which we believe could benefit slurry companies, processing fees, and upstream powder manufacturers. In the context of weak industry demand, gross margin and cash flow are critical for companies’ survival. We believe the industry may accelerate the adoption of base metal slurry materials to reduce costs and enhance high-power product shipments with premium pricing.

Space photovoltaics to create new business models

Recently, SpaceX announced the acquisition of xAI, with a post-merger valuation expected to exceed $1 trillion, aiming to build a space-ground-computing ecosystem. We believe subsequent developments in space photovoltaics may continue to evolve, with related product exchanges and equipment orders gradually materializing.

Leading photovoltaic companies have deep R&D foundations and are accelerating the industrialization of space photovoltaics: 1) Jinko Solar: collaborating with Jintai Holdings on AI + perovskite, planning to build the industry’s first 1,000-square-meter AI-stacked solar demonstration line, with commercialization of perovskite stacked cells expected between 2026-2028. 2) JunDa Co.: investing in Shangyi Optoelectronics, Xingyi Core Energy, and Xuntian Qianhe, with the first industrialized N-type + perovskite stacked cell expected to be completed by November 2025. 3) Trina Solar: conducting R&D in P-HJT, perovskite stacking, and GaAs, with connections to commercial aerospace clients. 4) Risen Energy: has achieved small batch deliveries of P-type ultra-thin heterojunction cells to overseas customers. 5) Foster: has mass-produced POE胶膜 and butyl rubber products suitable for perovskite cell encapsulation and protection. 6) Haiyou New Materials: developing POE modified materials and space-specific packaging materials, exploring potential domestic and overseas business channels.

Wind power companies’ forward-looking investment layouts: 1) Goldwind: holds 4.14% of Blue Arrow Aerospace through a wholly owned subsidiary. 2) Mingyang Smart Energy: acquired control of its subsidiary Dehua Chip, which has a full industry chain R&D system from epitaxial materials to space energy systems. 3) Taisun Wind: established a joint venture with YunYao Aerospace to develop “aerospace information + new energy” businesses.

Risk Warning: Demand for wind and photovoltaic sectors may underperform expectations, space photovoltaic industrialization may fall short, and market competition may intensify.

(Source: People’s Financial News)