Soochow: Australia, Europe lead new growth, diversified layout, leading the recovery of the head.

Soochow released a research report stating that the power equipment industry is considering subsidies in Australia + transition of new and old policies, the survival necessity of post-disaster reconstruction in Ukraine, and the surge in household storage demand stimulated by the UK's hundred billion pound subsidy. The demand for household storage is strong in Eastern Europe and other European countries, with low penetration rates of light storage in Asian, African, and Latin American markets, creating a large growth space for household storage. The trend of end customers preferring all-in-one machines is becoming more apparent, with significantly increased rates of self-provision of battery packs bringing significant increments. At the same time, industrial and large-scale storage are gradually gaining momentum, becoming new driving forces for continued growth in the future. Soochow's main points are as follows: Reviewing the outbreak areas of global household storage, the driving factors for the outbreak are: 1) Falling prices of light storage, achieving price parity globally; 2) Power shortages or rising electricity prices driving demand for basic necessities; 3) Subsidies and other policies catalyzing growth. Australia/UK/Ukraine/Netherlands and other countries' policies are driving the explosion of household storage, and the industry can expect continued growth. 1) Australia: High household light rates + low storage rates, subsidy-driven demand explosion. Australia's household light penetration rate/stock light storage ratio are 39%/10%, the Australian government launched a 23 billion Australian dollar subsidy plan in the first half of 2025 to promote household storage development, increased to 72 billion Australian dollars in December, adjusting the subsidy scope. The transition of old and new policies stimulates the explosion of household storage in Australia. At the same time, VPP has become an important incentive for household storage. The bank predicts that the installed capacity of household storage will exceed 5gwh by 2026 and is projected to reach 8gwh by 2027; 2) Europe: Ukraine/UK/Netherlands are important growth markets, and Germany's demand is expected to recover. Germany is a traditional high household storage installation country, with multiple policies promoting household storage to participate in auxiliary services through VPP. Demand is expected to recover. Starting from 2026, the UK mandated new buildings to have solar panels, while launching the "Warm Homes Plan" to provide 150 billion to promote the development of solar storage heat pumps, expected to drive the addition of 3 million households with solar panels, bringing an estimated 24gwh incremental space for household storage. With severe damage to electricity facilities in Ukraine and severe nationwide power outages, policy subsidies and the survival necessity post-disaster have driven high growth in household storage. The bank predicts that installed capacity could exceed 2gwh by 2026, and if post-disaster reconstruction continues, the incremental space could reach 34gwh. With high household light penetration in the Netherlands and a stock storage ratio of less than 10%, the cancellation of net metering policies is forcing existing users to increase their storage capacity, which is expected to bring about 20gwh+ of incremental space. Poland, Hungary, and other Eastern European countries have introduced policies to support the development of household storage. By 2026, the bank predicts that Europe's household storage installed capacity could reach 14gwh, a 37% increase, with a compound annual growth rate maintained at 10-20% between 2027 and 2030; 3) United States: Household ITC subsidies are being phased out, while rising electricity prices and VPP applications can drive medium-to-long-term growth. Household ITC subsidies are scheduled to end by the end of 2025, and it is expected that household storage installations in the United States will reach 3.8gwh by the end of 2026, a 60%+ increase, followed by a decline in 2027. With the significant increase in electricity consumption by data centers in the United States, residential electricity prices may rise, coupled with TPO models and VPP aggregation for peak shaving, it is expected that household storage in the United States may gradually return to steady growth in the medium-to-long term. Considering the policies driving the explosion of household storage in Australia/UK/Ukraine/Netherlands and the potential gradual recovery of demand in traditional household storage powerhouses such as Germany and the United States, the industry can expect continued growth. The bank predicts that global household storage installed capacity will reach 34gwh by 2026, a 30% increase, with a compound annual growth rate of 20% between 2027 and 2030. The trend of all-in-one machines is evident, with self-provision rates for battery packs gradually increasing, and industrial and large-scale storage becoming new growth drivers. The core competitive factors for household storage lie in branding and channels, with companies such as Deye, Jiangsu Goodwe Power Supply Technology Co., Ltd., Jinlang, and Ailo ranking among the top. The trend of all-in-one machines is evident in the industry, with various household storage manufacturers increasingly expanding their battery pack layouts, which are important sources of income and performance increments. Meanwhile, industrial and large-scale storage industries are experiencing explosive demand, with global demand expected to grow by over 60%. Each industrial and large-scale storage business benefits from high shipment expectations, becoming new growth drivers. Investment recommendations: Recommended stocks include Ningbo Deye Technology, Jiangsu Goodwe Power Supply Technology Co., Ltd., Ginlong Technologies, SolaX Power Network Technology, Pylon Technologies, Hoymiles Power Electronics Inc., Yuneng Technology. It is advisable to keep an eye on Shenzhen SOFARSOLAR and others. Risk warning: risks include policy dependence and cyclical fluctuations, risks associated with overdrawn demand and inventory cycles, intensified competition and price wars, supply chain and cost control risks, etc.