China Galaxy Securities: The structural differentiation of the electronics sector in the first half of the year focuses on new technology and non-US exports

The Zhitong Finance App learned that China Galaxy Securities released a research report saying that in the first half of 2025, the excess revenue in the new power sector was brief, but in the second half of the year, the wind power industry chain increased sharply, the resonance of power grids at home and abroad, and the explosion in AIDC demand will be the core driving force. The bank suggests focusing on three major directions: 1) AIDC, BC, and new copper paste technologies to accelerate industrialization; 2) going overseas to enjoy global dividend targets; 3) the inflection point of the supply and demand improvement cycle is approaching.

The main views of China Galaxy Securities are as follows:

2025H1 replay

Demand for optical storage is slowing down, oversupply is still the same. Grid wind power resonates at home and abroad, and AIDC has risen. As of June 18, the Shanghai and Shenzhen 300 Index -1.52%; the GEM Index -4.06%; and the Telecom Index -3.31%. Excess earnings were only brief, mainly driven by core individual stocks in the energy storage sector.

2025H2 outlook

Document No. 136 accelerates the full entry of new energy sources into the market. However, the global trend of energy safety and independence and green electrification is clear. Demand in emerging markets for optical storage is still a bright spot. 25H2 wind power construction is accelerating, demand for AIDC construction is strong, and short-term disturbances will not change the industry trend.

The volume of the wind power industry chain is rising rapidly, and going overseas boosts profit recovery

European wind power continues to advance. Seabreeze has been installed since 26 years ago. The whole engine that goes overseas looks at emerging markets, and parts look at Europe. Domestic land wind prices have returned to rationality, and winning the bid at the lowest price may become history. OEMs' profits are expected to continue to recover in 25 years, and large megawatt parts may experience a slight increase in prices. In 2025, the volume of the industrial chain will rise sharply, and parts will be more flexible.

Demand for power grids at home and abroad resonates, and AI leads the wave

From January to April 2025, the national grid invested 140.80 billion yuan, +14.6% year-on-year. Meanwhile, the distribution of electricity overseas boosted growth space, with total transformer exports of 17.83 billion yuan in January-April, +38.2% over the same period last year. Economic recovery and the rapid development of AI, compounded by the need for new energy grids and grid renewal and transformation, the bank believes that investment in power grids is still booming, that UHV and cross-regional transmission of electricity from the main grid are investment priorities. The AIDC industry chain is booming, and it continues to be optimistic about changes in power supply and distribution and liquid cooling.

In the era of affordable energy storage, the world is blooming more

Domestic document No. 136 is no longer mandatory. Energy storage is under pressure in the short term. In the long run, the energy storage industry is shifting from being driven by strong policies to being driven by market profits, and is optimistic about the potential for domestic sole storage and commercial storage. Overseas, they are optimistic about the rapid growth of European and American savings, industrial and commercial savings, and the potential for household savings in emerging markets.

Photovoltaics is growing steadily globally, focusing on new BC and copper paste technologies

Demand for photovoltaics entering the full market of new energy sources is under pressure in the short term, and prices in the industrial chain continue to fall. Waiting for supply-side reforms, domestic 2026HL will hit bottom and rebound under optimistic expectations. Emerging markets are developing rapidly, and global PV installations are growing steadily. I am optimistic about the continuous improvement of BC and copper paste technology.

Investment advice

1) AIDC, BC and new copper paste technologies accelerate industrialization. It is recommended to focus on Megmeet, Jinpan Technology, Igor, Ketai Power, Zhengtai Electric, Liangxin Co., Ltd., Longji Green Energy, Aixu Co., Ltd., Jingke Energy, Jingao Technology, Juhe Materials, etc. 2) Go overseas to enjoy global dividends. It is recommended to pay attention to Daikin Heavy Industries, Dongfang Cable, Mingyang Intelligence, Deye Co., Ltd., Sunshine Power, Siyuan Electric, Huaming Equipment, Samsung Medical, etc. 3) The inflection point of the supply and demand improvement cycle is approaching. It is recommended to focus on Goldwind Technology, Sany Heavy Energy, Jinlei Co., Ltd., GCL Technology, Goodway, Shenghong Co., Ltd., CITIC Expo, etc.