Soochow: Explore the overseas large-scale energy storage market and focus on high-quality energy storage leaders.

Soochow released a research report stating that the prices of energy storage systems in Europe and the United States are on a downward trend. The price for new signed orders in 24H2 has dropped to below 0.2 US dollars/wh. After adjustments, the competition in the Asia, Africa, and Latin American markets is fierce, with new signed order prices mainly ranging from 0.8-1 US dollars/wh. In terms of profitability, the energy storage systems in Europe and the United States peaked in 24 years and declined in 25 years, but the high barriers and good market structure still allow for overall profitability to be maintained at 0.3 US dollars/wh or higher. Meanwhile, the Asia, Africa, and Latin American regions are expected to have profits of 0.15 US dollars/wh, which are much better than in China. Soochow's main viewpoints include: - Renewable energy integration+light storage parity stimulate demand for large storage overseas; combined with high returns on large storage, viable business models, and a surge in demand from 24-26 years. - Europe and other renewable energy sources account for 40% of electricity generation, urgently needing energy storage to stabilize grid fluctuations; and the high level of marketization in the European and American electricity markets, along with capacity electricity prices and initial investment tax subsidies, result in an IRR of 10% or higher. Viewing electricity costs, the price of light storage in September 24 dropped by over 50% from its peak, with a 30%/2h storage ratio, the electricity cost for light storage is 0.25-0.35 US dollars/kWh, which is approaching parity. Therefore, demand in Europe and emerging markets is expected to explode starting from 24, and it is predicted that growth will double from 24 to 26 years, with the US speeding up grid approvals and returning to doubling growth. Soochow predicts that installations for large overseas storage from 24-26 years will be 53/87/130GWh, a year-on-year increase of 108%/65%/50%, surpassing 400GWh by 2030. In terms of shipments, the demand for large overseas storage from 24-26 will be 150/215/284GWh, an increase of 103%/43%/32%. The technical routes of energy storage systems are diverse, with overseas distributed and large series as the main options. The trend towards long-term integration of technology is evident, with integrated technology and support technology at the core. Energy storage systems are divided into centralized, large series, intelligent series, distributed, high-voltage cascade, and distributed energy blocks. Large storage in China mainly focuses on centralized systems, while overseas Tesla's distributed systems dominate. However, Contemporary Amperex Technology has an advantage in large series cost-effectiveness, and its market share is rapidly increasing. Integration of energy storage systems is a trend. On the DC side, integrated battery clusters, fire protection systems, temperature control systems, and distribution/bus bars make up the electrical cabinets, focusing on electrochemistry and integrated technology. On the AC side, PCS, EMS, and transformers are mainly used to connect batteries and the grid, with the performance requirements of fast response, strong carrying capacity, and protective functions, emphasizing the power electronics and grid support technologies. Battery and PCS manufacturers each have their strengths, but the core lies in integrated and support technologies, and focusing solely on battery cores or PCS limits competitiveness. Additionally, although battery cores are standardized products, there are significant differences in long-term safety, which may affect the competitive landscape. Overseas large storage profits may have room for decline but are still far higher than in China. In 24, new orders have landed intensively, with Tesla, CATL, and Sungrow still leading. The prices of energy storage systems in Europe and the United States are on a downward trend, with new signed order prices in 24H2 dropping to below 0.2 US dollars/wh, and fierce competition in the Asia, Africa, and Latin American markets, with new signed order prices ranging from 0.8-1 US dollars/wh. In terms of profitability, energy storage systems in Europe and the United States peaked in 24 and declined in 25, but with high barriers and a good market structure, overall profitability can still be maintained at 0.3 US dollars/wh or higher, while the Asia, Africa, and Latin American regions are expected to have profits of 0.15 US dollars/wh, which are much better than in China. In terms of competition, Tesla and Sungrow lead the systems, with both having a high market share in the US, and European, Australian markets having many awarded orders, combined with Sungrow's large projects in the Middle East, which are expected to further increase market share; in terms of batteries, CATL's overseas market share in 25 is expected to be between 50-60%, supplying only to Tesla, while Sungrow and Fluence are the main suppliers. From 23 onwards, second-tier integrators and battery companies have gradually gained market share, especially in the Asia, Africa, and Latin American regions, with intense competition, but the leading companies have a clear advantage, limiting the impact. In terms of industry elasticity, profits for integrators and PCS manufacturers in 25 have a higher elasticity of 30-50%, while battery companies have a elasticity of 20-30%. Investment recommendations: The main overseas market for large storage is experiencing a rebound in growth in the US, with increasing growth in Europe, Asia, Africa, and other markets, many reserve projects, which can support sustained high growth from 24-26 years. The overseas large storage barriers are relatively high, the competitive landscape is good, and the leading companies have strong overseas capabilities. Sungrow Power Supply (300274.SZ) and Contemporary Amperex Technology (300750.SZ) are recommended as top picks, followed by CSI Solar Co., Ltd. (688472.SH), Eve Energy Co., Ltd. (300014.SZ), BYD Company Limited (002594.SZ), Shenzhen Sinexcel Electric (300693.SZ), Shenzhen Hopewind Electric (603063.SH), with attention to Sineng Electric (300827.SZ), Shenzhen Envicool Technology (002837.SZ), Eaglerise Electric & Electronic (002922.SZ), Kehua Data Co., Ltd. (002335.SZ). Risk warning: Intensified competition, policies changing unexpectedly, renewable energy installations falling short of expectations, insufficient supply of raw materials, and other factors.