Summary of CITIC SEC's New Energy Reports for 2025 and the first quarter of 2026: Energy storage industry is significantly improving with a bullish trend, and wind power profits continue to improve.

CITIC SEC released a research report stating that the performance of the new energy industry in 2025 & 2026 Q1 is as follows: 1) Energy storage sector is on the rise, with household storage profitable and large storage waiting for a turning point in cost transmission; 2) Wind power sector has established a turning point in performance, with both quantity and price rising, combined with overseas and offshore wind business expansion, leading to continuous profit recovery; 3) The solar photovoltaic sector is in a bottoming out and recovery phase, with main chain losses narrowing, auxiliary materials leading the rebound, and industry risks gradually clearing. Overall, the three major sectors of wind, solar, and energy storage show structural differentiation. The value of energy storage and wind power with performance certainty is highlighted. It is also recommended to pay attention to potential turnaround signals in the solar industry. CITIC SEC's main views are as follows: Energy Storage: Significant improvement in prosperity, with differentiated profits. In 2025 & 2026 Q1, the overall prosperity of the energy storage sector has significantly improved, with high revenue growth and profits showing a clear differentiation between user-side storage and large-scale storage. User-side energy storage benefits from overseas demand recovery, continuous increase in contract liabilities, and dilution of cost rates, entering a continuous upward channel in performance; large-scale storage is suppressed by the rise in lithium carbonate prices and profit pressure from overseas payment rhythms, but global new energy infrastructure construction and grid expansion support high demand growth. Leading companies are expected to reach a turning point in profitability through price locking and overseas volume expansion, strengthening the sector's growth certainty. Wind Power: Continued improvement in profitability, with a clear growth trend. In 2025 & 2026 Q1, the wind power sector saw accelerated growth in revenue and net profit, with both machine and components profitability improving simultaneously. Industry orders and contract liabilities have significantly increased, and wind turbine bid prices have rebounded, driving profit structure optimization with an increase in the proportion of "two seas" (overseas + offshore wind) business, resonance between component exports and machine profitability recovery, and the sector's valuation and performance expected to see a double increase, with growth attributes returning comprehensively. Solar Photovoltaic: Bottoming out and recovery in progress, with marginal improvement expected. The solar photovoltaic main industry chain is in a phase of bottoming out and recovery in 2025 & 2026 Q1, with revenue shrinkage and narrowing of losses, gradual release of risks from asset impairment and inventory price drops, and marginal improvement in financial structure. Auxiliary materials segment is leading the rebound, showing positive signals in revenue and profitability; the equipment segment is still at the bottom of the cycle, with downstream expansion weakly suppressing demand. With stable prices, clearance of excess production capacity, and technological iteration, the industry is transitioning from deep adjustment to marginal recovery, establishing a trend of high-quality development. Investment Strategy: In reviewing the performance of the three major sectors of wind, solar, and energy storage in 2025 & 26 Q1, it is clear that the value of energy storage and wind power with performance certainty is highlighted. It is also recommended to pay attention to potential turnaround signals in the solar industry. 1) Energy Storage: Driven by the urgent needs for new energy consumption, overseas power shortages, and accelerated improvement in profit models, the demand for energy storage installations will continue to grow. 2) Wind Power: For the component segment, look to expand overseas, while for the product upgrades; for the wind turbine segment, domestic price profitability is expected to rebound, and accelerating expansion of the "two seas" business will drive a dual increase in profitability and valuation. 3) Solar Photovoltaic: Benefiting from stable prices and steady technological upgrades, the industry is expected to achieve high-quality development. Risks: Risks include lower-than-expected growth in wind and solar energy demand; slower-than-expected recovery in product prices such as solar components, 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.