Sinolink: Changes in the direction of the US presidential election and approaching interest rate cuts resonate, driving the recovery of the new energy sector.

Sinolink released a research report stating that the direction of the US election has changed, and the attitude towards the energy industry may gradually become an area of smaller differences and contradictions in the governing ideologies of the two parties. Combined with the Fed's expected interest rate cut nearing implementation, the development of new energy projects will be a direct beneficiary of the interest rate cut. The resonance of these two major factors is expected to drive a significant recovery in sentiment and expectations in the electric vehicle sector, especially in the offshore related industrial chain. It is recommended to increase the allocation of relevant targets. In addition, several key companies in the power grid sector have reported results that meet or exceed expectations, dispelling concerns about Q2 performance in the market. As a result, the sector has seen a counter-trend rise in the past month. Solar & Energy Storage: The change in the direction of the US election, along with the Federal Reserve's interest rate cut expectations nearing implementation, is expected to drive the sentiment and expectations of the electric vehicle sector, especially in the offshore related industrial chain. It is recommended to increase relevant target allocations. Power Grid: Several key companies have reported results that meet or exceed expectations, dispelling concerns about Q2 performance in the market. Looking ahead to September to December, in terms of offshore developments, power transformers, high-voltage switches, and smart meters are expected to enter a phase of concentrated delivery in the third and fourth quarters. Domestically, ultra-high-voltage and power transmission projects are seeing intensive tenders, with DC projects being delivered one after the other. There is also improvement potential in external new energy and industrial demand. The opportunity for exceeding expectations domestically and overseas is reiterated. Wind Power: The China General Nuclear Power Corporation platform issued a tender notice for the "Yangjiang Fanshi offshore wind power project's first 500kV submarine cable and laying," with the first batch of equipment scheduled for delivery on April 1, 2025. The Guangdong offshore wind power project is progressing with positive signals, and the installation of offshore wind power during the latter part of the 14th Five-Year Plan is expected to accelerate. This tender project will use a 500kV ultra-high voltage-level submarine cable and requires bidders to have at least one 220kV or higher submarine cable supply performance. As China's offshore wind power projects advance to deeper waters, the value and threshold of equipment such as submarine cables are expected to further increase. Hydrogen Energy and Fuel Cells: The Energy Law Amendment Bill has been submitted for a second review, introducing provisions for the development and utilization of hydrogen energy for the first time, indicating the importance of hydrogen energy at the central level. Subsequent policymaking is underway, and the gradual adoption of ammonia is being promoted. Foshan is driving the application of replacing natural gas combustion with ammonia, with a subsidy of 1,000 yuan per ton of "gas replacement with ammonia." Other provinces and cities are expected to gradually follow suit, driving the demand growth of synthetic ammonia in the domestic industrial sector. Key industry events this week: Solar, Storage, Wind: Trump unexpectedly expressed support for CECEP Solar Energy in the US presidential debate; additional tariffs imposed by the US on several industries with China had little impact on solar energy; CGN released a tender notice for the "Yangjiang Fanshi offshore wind power project's first 500kV submarine cable and laying"; Wuxi Autowell Technology Co., Ltd. signed a 9 billion yuan order for a single crystal furnace with an overseas customer. Power Grid: Southern Power Grid Company will increase the prepayment ratio for small and medium-sized enterprises; the first domestic pilot project for incremental distribution business of the first smart distribution network system has been successfully evaluated; China XD Electric Chairman Zhao Qi resigned due to job changes; Henan Pinggao Electric General Manager Zhu Qiqi resigned, and Zhang Guoyue took over. Hydrogen Energy and Fuel Cells: The Energy Law Amendment Bill has been submitted for a second review, adding provisions for the development and utilization of hydrogen energy; the first MW-scale AEM hydrogen production station project in China has initiated an EPC bidding process; four hydrogen energy technologies have been included in the 2024 first batch of promotion catalog, promoting the development of hydrogen fuel cell vehicles and ships; Henan Province's "old-for-new" policy will provide an additional subsidy of 150,000 yuan per hydrogen fuel cell vehicle. Risk warning: Risks of policy adjustments and lower-than-expected execution effectiveness; risks of more intense competition in the industry chain prices than expected.