Summary of Key Points
On July 10th, the energy storage sector saw a sudden surge, with multiple stocks hitting their daily price limits. Recently, several companies in the energy storage industry chain have released their half-yearly performance forecasts for 2026, and most of them have reported significant increases in profits (positive earnings expectations). The reasons for the growth vary among these companies: some rely on supplies for ultra-high voltage projects, others on the surge in overseas energy storage demand, and still others on the high sales volumes and prices of raw materials such as lithium salts. The upstream sectors of lithium salts and cathode materials have also shifted from losses to profits. Analysts believe that global energy storage demand will continue to grow, and industry performance is expected to improve further.
Why Did the Energy Storage Sector Suddenly Boom?
On July 10th, the energy storage sector experienced a sharp rise, with stocks such as Kelu Electronics and Dalian Electric Ceramics hitting their daily price limits, while Youyou Green Energy and Xinhongye also saw substantial gains. The most direct reason behind this was the pile-up of positive earnings news: several energy storage-related companies had announced their half-yearly profit forecasts in advance, showing much higher profits compared to the same period last year. Investors, seeing these companies' improved profitability, bought into related stocks, leading to an overall increase in the sector.
Companies with Positive Earnings Expectations Have Different Strategies for Profit Growth
The growth patterns of different companies vary. Here are a few examples:
- Dalian Electric Ceramics: Benefiting from Ultra-High Voltage Projects
The company expects a net profit of 140-180 million yuan for the first half of the year, a year-on-year increase of 200%-300%. This is due to completing supplies for key ultra-high voltage projects such as the "Aba-Chengdu" and "Gansu-Zhejiang" routes. The products sold are of higher quality and value, resulting in higher gross margins and an improved profit structure.
- Deye Shares: Surging Overseas Energy Storage Demand
The company expects a net profit of 2.668-2.728 billion yuan, a year-on-year increase of 75%-79%. This is driven by increased demand for energy storage equipment from households and businesses in Europe, the Middle East, and Southeast Asia, leading to higher sales volumes and profits.
- Yanhu Shares: Increased Profitability from Lithium Salts and Potassium Chloride
The company expects a net profit of 6-6.3 billion yuan, a year-on-year increase of 131%-142%. This is due to increased sales volumes and prices of potassium chloride (a fertilizer raw material), as well as the production of 40,000 tons of lithium salts. The production and sales of lithium carbonate (a material for lithium batteries) have also increased, contributing to the profit growth.
- EV Energy Lithium: Stable Profit Growth
The company expects a net profit of 3.13-3.371 billion yuan, a year-on-year increase of 95%-110%. The non-recurring gains have also increased by 110%-125%, indicating that the company's main business (lithium batteries) is indeed becoming more profitable.
How Did the Upstream Material Sectors Turn from Losses to Profits?
The upstream sectors of the energy storage industry chain (lithium salts and cathode materials), which had previously experienced losses, have now turned profitable:
- Shengxin Lithium Energy: Higher Sales Volumes and Prices for Lithium Salts
The company expects a profit of 1-12 billion yuan for the first half of the year, compared to a loss last year. This is due to increased production and prices of lithium salts, as well as the expansion of its production capacity in Indonesia, allowing it to sell more products.
- Rongbai Technology: Overseas Growth for Ternary Cathode Materials
The company expects a net profit of 100-120 million yuan, compared to a loss last year. This is because the profitability of ternary cathode materials (a key component for lithium batteries) has improved, and overseas orders have increased, leading to higher sales volumes and profits.
What Do Analysts Think? Will the Energy Storage Sector Continue to Boom?
Huaxi Securities believes that as global energy storage demand grows, the demand for lithium batteries will continue to rise. Currently, there is a shortage of supply, which may lead to further increases in product prices and profits across all sectors. With the arrival of peak usage seasons (such as the second half of the year), demand for lithium batteries is expected to increase, leading to higher sales volumes and prices, and thus better performance for related companies. In short, the industry is likely to continue to thrive, offering many investment opportunities.
Overall, the recent rise in the energy storage sector is not accidental but is supported by strong financial performance. The industry's future demand is also promising. Individuals can pay attention to the long-term trends in this field, but when investing in stocks, caution is advised.