In Q3, the new energy sector saw a dramatic decrease in construction projects compared to the previous quarter, while the lithium battery and photovoltaic sectors have stabilized their revenue and profit at the bottom, with demand side remaining stable and supply side contracting. Although many links still face the reality of supply-demand imbalance, the gross margins of photovoltaic, lithium battery, and wind power are at historical lows, but the dawn of hope has emerged.
According to the Securities Times app, CSC Securities released a research report stating that in Q3, the new energy sector saw a dramatic decrease in construction projects compared to the previous quarter, while the lithium battery and photovoltaic sectors have stabilized their revenue and profit at the bottom, with demand side remaining stable and supply side contracting. Although many links still face the reality of supply-demand imbalance, the gross margins of photovoltaic, lithium battery, and wind power are at historical lows, but the dawn of hope has emerged.
Looking ahead, demand for electric vehicles remains strong, and the industry is naturally undergoing consolidation. By Q2 2025, it is expected to return to supply-demand balance; the wind power industry may see positive changes in policies due to strong demand by 2025; the bottom of the photovoltaic industry is essentially confirmed, and supply-side policies may reverse the supply-demand situation; incremental certainty in domestic power equipment is strong, with continued strong overseas market demand; strong demand for energy storage in the Middle East, North America, Latin America, Australia, etc., is expected to trade volume for profit.
Main viewpoints of Zhongxin Jiandao are as follows:
Observations on the supply side: The new energy industry has seen a cliff-like decline in new supply, as the industry's continuous willingness to expand production has waned, indicating that the industry is entering a new cycle. At the same time, the growth rates of fixed assets in sectors such as electric power equipment (ultra high pressure), electric power equipment (offshore), Contemporary Amperex Technology, global households' energy storage, wind power, etc., remain at low levels, and industries such as photovoltaic and lithium batteries will see a significant decline in fixed assets after 2025.
Observations on the demand side: In terms of the year-on-year growth rate of contract liabilities for various sectors, the contract liabilities of the electric power equipment, large energy storage, global households' energy storage, and wind power sectors have achieved high growth, indicating high order saturation in the industry's high prosperity trend. The contract liabilities of the photovoltaic, lithium battery (excluding Contemporary Amperex Technology), and European household energy storage sectors have declined year-on-year, mainly due to price decreases in the industry chain leading to a contraction in unit product value.
The cash flow in the new energy sector in Q3 has all shown some improvement compared to the previous quarter, and in year-on-year terms, apart from photovoltaic, lithium batteries (excluding Contemporary Amperex Technology), Landwind, and electric power equipment-ultra high pressure sectors, the operating cash flow of the sector in 24Q3 has all shown different degrees of year-on-year growth. Among them, the operating cash flow of the photovoltaic, lithium battery (excluding Contemporary Amperex Technology), and Landwind sectors declined by 32%, 30%, and 26% year-on-year, respectively. The operating cash flow of the large energy storage sector in Q3 turned positive from negative year-on-year.
Investment advice: With the expansion of supply in all aspects, the gross margin level of the new energy sector is at a historical low, the dawn is just beginning, focusing on companies that are leading in cost advantages in all aspects.
