The logic of energy substitution continues to strengthen, green electricity is once again active, and the new Zhonggang stock hits 4 limit-ups in 5 days

(Source: Caixin)

Middle East geopolitical conflicts pushing up oil prices, accelerating the global energy transition process, with some heavily impacted economies reducing their reliance on traditional energy sources, and the import demand for new energy products significantly increasing.

On April 7th, the green power sector was once again active. As of the time of writing, the constituent stock Xinzhonggang (605162.SH) hit the daily limit for four out of five days. Previously, Huatung Co., Ltd. (002840.SZ), Shengquan Group (605589.SH), Teda Co., Ltd. (000652.SZ), and Dongfang New Energy (002310.SZ) all hit the daily limit, with Xinjiang Tianye (600075.SH), Nuode Co., Ltd. (600110.SH), and Kailer Co., Ltd. (301070.SZ) following the upward trend.

On the news front, Middle East geopolitical conflicts pushing up oil prices are accelerating the global energy transition process. Some heavily impacted economies are reducing their dependence on traditional energy sources, and the import demand for new energy products has risen sharply. Against the backdrop of energy supply shocks, China’s exports of new energy-related products once experienced rapid growth. Currently, major Asian economies are highly dependent on Middle Eastern energy, and China’s share of exports in the new energy sector is expected to further increase, with the substitution logic continuing to strengthen.

In terms of policies, the “14th Five-Year Plan” explicitly proposes that the cumulative grid-connected capacity of offshore wind power should reach over 100 million kilowatts. Many provinces and cities nationwide are including new energy storage as a key task. Meanwhile, mechanisms such as the assessment of green electricity consumption ratios are gradually being improved under policy support.

CICC Securities pointed out that, amid rising oil price centers and high volatility, investment opportunities in new energy are becoming more prominent. Since mid-March, Brent crude oil prices have continued to fluctuate above $100. Under the background of ongoing uncertainties in the US-Iran conflict, the importance of energy structure transformation is even more evident. On one hand, power generation from photovoltaic and wind power is less affected by geopolitical conflicts and fossil fuel prices. On the other hand, increasing penetration of new energy vehicles can help reduce dependence on oil, while energy storage systems can smooth out the volatility of new energy and improve absorption capacity. In recent years, the global political and energy structure systems are undergoing changes, with the frequency and intensity of geopolitical frictions increasing. Under this context, the demand for global energy security is likely to continue strengthening, and various tracks within the new energy sector are expected to benefit continuously. By 2026, all segments of the new energy sector—including photovoltaics, wind power, batteries, and energy storage—are expected to perform well, and the industry currently still offers high cost-performance ratios.