Minsheng Securities: The overall performance of the electronic information sector is under pressure, focusing on investment opportunities from the dual perspectives of supply and demand.

Minsheng Securities issued a research report stating that due to oversupply causing a decrease in the price of lithium battery materials, the profitability of the new energy vehicle industry is under pressure, and performance is in a downward period, with some segments expected to bottom out in profit. In the new energy generation sector, the photovoltaic industry is under pressure due to oversupply, while the auxiliary materials sector still shows profitability. The main engine manufacturers in the wind power industry are seeing profitability pick up, and the performance of the marine cable sector is relatively good. The revenue of the electrical equipment sector has slightly increased year-on-year, with the net profit staying the same year-on-year; the performance of the industrial control sector is steadily improving. Overall, the performance of the new energy sector is under pressure, and attention should be paid to investment opportunities from the perspective of effective demand and supply. The overall performance of the new energy sector is under pressure, and attention should be paid to investment opportunities from the perspective of effective demand and supply. Minsheng Securities has compiled data from 276 listed companies, with a total revenue of 1.6714 trillion yuan for the entire 24H1 sector, a year-on-year decrease of 11.26%, and a net profit attributable to the parent company of 85.6 billion yuan, a year-on-year decrease of 51.99%. 24H1 marks the first year-on-year decrease in total revenue for the new energy sector; in this context, Minsheng Securities has reassessed and screened investment opportunities for the entire new energy sector from the perspective of effective demand and supply. Scenario one: good demand expectations focus on effective demand, two paths assess total demand with internal and external resonance (power grid, wind power), and structural demand with excess returns (large storage, inverters); Scenario two: limited demand expectations focus on effective supply, two paths assess industry clearance and production line upgrades (photovoltaic, lithium batteries). New energy vehicle sector: Performance is in a downward period, and some segments are expected to bottom out in profit. A total of 89 listed companies in the new energy vehicle sector were included in the statistics. Due to oversupply causing a decrease in the price of lithium battery materials, the industry's profitability is under pressure. In 24H1, the total revenue was 706.832 billion yuan, a year-on-year decrease of 11.62%; and the net profit attributable to the parent company was 46.12 billion yuan, a year-on-year decrease of 33.90%. The overall performance decline was mainly due to factors such as impairment provision for raw materials and price drops. New energy generation sector: 1) Photovoltaic: Oversupply in the main chain is putting pressure on profitability, while the auxiliary materials sector still shows profitability. The photovoltaic sector achieved a total revenue of 551.355 billion yuan in 24H1, a year-on-year decrease of 18.30%; and a net profit attributable to the parent company of 3.216 billion yuan, a year-on-year decrease of 95.49%. The significant decrease in profit was mainly due to the main chain companies being in a loss-making state, with integrated component companies such as Tonghe and Jinko Solar making marginal profits, while CSI Solar Co., Ltd. maintained certain profitability in the US light storage market; inverter companies generally have good profitability, and they are expected to benefit from the recovery of demand in Europe and the US and the increase in volume in emerging markets. 2) Wind power: The main engine manufacturers are seeing profitability improve, and the performance of the marine cable sector is relatively good. The wind power industry achieved a total revenue of 183.742 billion yuan in 24H1, a year-on-year increase of 0.85%; and a net profit attributable to the parent company of 9.162 billion yuan, a year-on-year decrease of 21.24%. In terms of industry breakdown, the previously criticized high degree of homogeneity in the tower, pile, and anchor segment is gradually showing differentiation in strategic and business structure choices; the performance of the marine cable segment is relatively good; main engine companies represented by Goldwind are beginning to demonstrate a logic of profit recovery; and the component segment reflects a certain price pressure. 3) Energy storage: In the first half of 2024, the energy storage sector achieved total revenue of 278.8 billion yuan, a year-on-year decrease of 8%; and a net profit attributable to the parent company of 32.5 billion yuan, a year-on-year decrease of 2%. In Q2 of 2024, the energy storage sector achieved total revenue of 151.8 billion yuan, a year-on-year decrease of 6%; and a net profit attributable to the parent company of 18 billion yuan, a year-on-year increase of 1%. Electric power equipment sector: Revenue slightly increased year-on-year, while the net profit attributable to the parent company stayed the same year-on-year. The electric power equipment sector achieved a total revenue of 207.3 billion yuan in 24H1, a year-on-year increase of 5%; and a net profit of 15.9 billion yuan, a year-on-year decrease of 21% (excluding the impact of the TBEA Co., Ltd. silicon materials, the net profit attributable to the parent company in 24H1 remained flat). Industrial control sector: Performance is steadily improving. The industrial control sector achieved a total revenue of 32.634 billion yuan in 24H1, a year-on-year increase of 16.84%; and a net profit attributable to the parent company of 3.536 billion yuan, a year-on-year increase of 4.65%; In the low-voltage electrical sector, the total revenue for 24H1 was 53.354 billion yuan, a year-on-year increase of 3.59%, and the net profit attributable to the parent company was 2.621 billion yuan, a year-on-year increase of 8.33%. Risk warning: Policy fails to meet expectations, increased industry competition leads to a greater-than-expected decline in prices, etc.