Huaan: Solar remains in the bottoming-out phase; wind power overseas expansion trend continues.

Huaan released a research report stating that on the demand side of solar, current demand is expected to remain at a low level; on the supply side, the details of policy implementation remain to be observed; on pricing, prices across the main solar industry chain are expected to hover overall near the cost line with modest fluctuations. Fundamentals are expected to remain at a bottom in 2026, but looking ahead, new technologies are expected to become an important direction for accelerating industry consolidation. The main catalysts for the wind power sector going forward lie in: construction and tendering of important offshore wind projects in 2026, especially deep-sea projects; landing of overseas orders and overseas tendering in 2026; the 15th Five-Year Plan and subsequent deep-sea planning. Huaan's main views are as follows: Solar: Demand under pressure combined with continued supply-side consolidation; the industry remains in the bottoming-out phase In 2026H1, domestic solar demand came under some pressure. From January to July 2026, China's newly added solar installations totaled 86.15GW, down 61% year on year. The bank believes this was mainly affected by policies such as the 2025 "Document No. 136," with earlier rush installations having pulled forward demand, leading to a marked year-on-year decline in installations in the first half of 2026. Overseas, from January to July, cumulative cell export value rose significantly year on year, while cumulative module export value also posted a certain percentage year-on-year increase. On the supply side, in 2026H1, prices across the industry chain generally trended downward with fluctuations. Affected by supply-demand mismatch in the market, polysilicon, wafer, and cell prices fell back after reaching a stage high in March. Improvement in industry supply and demand still requires further capacity consolidation. On profitability, in 2026Q2, the operating revenue of major solar companies was about RMB150.5 billion, down 8% year on year, mainly due to slow industry consolidation combined with weak demand, which pressured product prices. The polysilicon and wafer segments still face loss pressure, and subsequent attention should be paid to the pace of capacity release and the progress of anti-involution policies. Overall, the bank believes the solar industry is still in the bottoming-out phase, demand-side recovery still needs time, and the pace of supply-side consolidation determines the speed of profit repair. Going forward, focus should be on the pace of improvement in the industry's supply-demand structure and progress in the industrialization of new technologies. Wind power: Installations decline year on year under a high base; continue to watch offshore wind and overseas expansion pace From January to July 2026, nationwide newly added grid-connected wind power installed capacity was 47.1GW, down 12.3% year on year. In 2026H1, newly added grid-connected onshore wind installed capacity was 37.78GW, down 22.7% year on year; newly added grid-connected offshore wind installed capacity was 0.84GW, down 66.3% year on year. The bank believes the decline in wind installations was mainly due to the high base from the 2025 rush installation wave. On performance, in 2026Q2, the operating revenue of major wind power companies was RMB145.4 billion, up 12% year on year, among which revenue in the submarine cable segment rose 29% year on year, mainly because companies actively expanded submarine cable business and new application areas; complete machines and wind power components achieved revenue growth benefiting from domestic onshore wind demand and progress in overseas orders; the tower and pile segment declined somewhat due to last year's high base. Gross margin performance varied across segments of the wind power industry, with some segments improving, but overall profit repair remained relatively limited. Overall, the bank believes subsequent growth in the wind power industry will mainly come from the landing of domestic offshore wind projects and expansion in overseas markets. It is recommended to focus on the pace of deep-sea wind power construction, the release of overseas orders, and the overseas expansion progress of companies in the complete machine, tower and pile, and submarine cable segments. Risk warning Industry demand falling short of expectations; capacity consolidation falling short of expectations; new technology iteration risk.