The new energy sector retreated, with Chint Electric dropping over 6%. The "Low-Cost Dual Champions in New Energy" Battery ETF and the Solar ETF from Huatai Wealth (ticker: (159796) and (516290)) both declined! Pay attention to the substitution effects driven by soaring energy prices.

On March 16, the A-share market experienced volatility and a pullback, with the battery ETF Hui Tianfu (159796), which leads in its category and has the lowest fee rate, slightly down by 0.48%. The photovoltaic ETF Hui Tianfu (516290), also with the lowest fee rate, fell over 2%, despite a net inflow of 10 million yuan from funds on the previous trading day against the trend.

Most of the constituent stocks in the Hui Tianfu (516290) photovoltaic ETF index declined, with Chint Electric dropping over 6%, TBEA, TCL Technology, and Deye Holdings falling over 3%, and Longi Green Energy, Sungrow, and others also retreating.

As of 3:00 PM, the constituent stocks are for display purposes only and do not constitute investment advice.

Currently, geopolitical disturbances continue, and oil prices remain high. Industrial Securities suggests two strategic approaches: one is sectors whose prices can link to oil prices and benefit from rising oil, and the other is sectors with independent prosperity and less affected by oil price increases. Among these, Industrial Securities points out that under high oil prices, the economic viability of new energy and other energy sources becomes more prominent, driven by increased energy substitution demand. (Source: 2026311 “Oil Prices from a Geopolitical Perspective: Longer until Higher”)

[The substitution effect of soaring energy prices, focusing on energy storage, photovoltaics, batteries, and other broad energy infrastructure]

Dongwu Securities states that energy security + AI power shortages accelerate energy infrastructure development. After the 2022 geopolitical conflicts, global energy costs increased, especially intensifying energy cost pressures in European countries. For long-term energy security, countries are increasing capital expenditure on energy projects. The US increased power investments in 2022-2023, with the fastest growth since the 2008 subprime crisis; China also increased capital spending on broad energy sectors from 2022 to 2024, with the combined capital expenditure share of petrochemical, power, utilities, and coal companies reaching about 40% in 2024. Meanwhile, rapid AI iteration accelerates electricity consumption. According to IEA’s “Energy and Artificial Intelligence,” global data center electricity use is expected to double, reaching about 945 TWh by 2030, accounting for roughly 3% of total global electricity consumption. From 2024 to 2030, data center electricity demand is projected to grow about 15% annually, more than four times the growth of all other industries’ electricity consumption.

Accelerated energy infrastructure investment in Europe and the US benefits broad energy sectors such as energy storage, wind power, photovoltaics, lithium batteries, and power grids. To ensure future energy security, Europe and the US are increasing investments: the UK has canceled 33 wind power component import tariffs from April 1, reducing tariffs on core parts like blades and cables from 6% and 2% to 0, aiming to release 22 billion pounds of investment and accelerate North Sea offshore wind installations. Germany’s Federal Ministry for Economic Affairs drafted the “Renewable Energy Act” (EEG 2027), proposing to stop fixed feed-in tariffs for new small photovoltaic installations of 25kW or less. The “Nine Countries of the North Sea” alliance, Iceland, the EU, and NATO jointly signed the “Hamburg Declaration,” aiming to build 300 GW of offshore wind projects by 2050 (including 100 GW cross-border projects). Due to China’s technological advantages in photovoltaics, wind, and lithium batteries, we believe overseas broad energy development could boost sectors like energy storage, wind, solar, lithium batteries, and power grids. (Source: Dongwu Securities 20260316 “Four Strategies to Hedge Oil Price Rise”)

[Batteries: Major Opportunities for Residential and Commercial Storage Amid Global Power Shortages]!

Huaxi Securities points out that in Q1 2026, residential and commercial storage production remains strong, with continued growth in prosperity. On one hand, some regions have introduced clear energy storage policies, further boosting demand; on the other hand, emerging markets generally face high electricity prices, weak grid infrastructure, and unstable power supply, with commercial and residential storage expected to see explosive growth due to electricity cost optimization and replacing diesel generators.

Large-scale storage sees demand resonance from multiple points domestically and internationally. On one side, power market reforms drive domestic independent storage demand. Under clear revenue models and expanded bidding scales, the growth rate of new large storage capacity in China could reach 47% in 2026. On the other side, overseas large storage demand is flourishing. ① US: Explosive demand from AI data centers + grid upgrades, with expected growth of 40% in new large storage capacity in 2026, indicating high industry prosperity; ② Middle East & North Africa: Under energy transition, emerging markets like the Middle East are expected to see rapid growth in storage demand, with current estimates of about 40 GWh of new projects by 2026; ③ Europe: High renewable penetration, with large storage expected to quickly follow residential storage growth. According to SPE statistics, the new large storage capacity in Europe for 2024/2025 is 8.8 GWh/16.3 GWh, up 79.6%/85.2%, and is expected to continue rapid growth in 2026. (Source: Huaxi Securities 20260315 “Offshore Wind/Storage Prosperity Cycle Rising, Focus on Marginal Improvement in Lithium Industry”)

【Photovoltaics: Focus on HJT Expansion and Device Investment Opportunities】

Huaxi Securities notes that as demand in the photovoltaic industry remains stable, market focus will gradually shift to structural opportunities driven by technological iteration. Companies with early advantages in new technology routes and core competitiveness are expected to realize performance benefits first. Focus on HJT expansion as a main line to seize device-side investment opportunities. HJT (Heterojunction Technology) has become an important technical direction for overseas PV expansion. It features shorter production processes suitable for high-labor-cost regions abroad, reducing overall operational costs. Additionally, HJT’s metallization process uses silver-coated copper paste, effectively alleviating silver price pressures. Coupled with breakthroughs and commercialization efforts in space photovoltaic technology, this further expands growth prospects for overseas PV industries.

In the context of government-enterprise cooperation to “counter internal competition” and rapid technological iteration, the PV sector is expected to see fundamental recovery. Coupled with hotspots like space photovoltaics, sentiment may turn positive. We are optimistic about signs of reversal in the PV sector, and recommend focusing on Hui Tianfu (516290), the lowest fee photovoltaic ETF. For those without securities accounts, consider the linked funds (A: 024059, C: 024060), which support 24/7 subscription!

Notably, Hui Tianfu (516290) photovoltaic ETF has a management fee of only 0.15% and a custody fee of 0.05%, making it one of the lowest-cost PV-themed ETFs, only one-third of the mainstream market rates—“management fee 0.5%, custody fee 0.1%.”

Currently, the battery ETF Hui Tianfu (159796) is leading in size and has the lowest fee tier. Among ETFs tracking the CSI Battery Theme Index, Hui Tianfu (159796) has a significantly larger scale than peers! Additionally, its management fee is only 0.15% per year, the lowest among similar products, aiming to provide investors with a good investment experience! For off-market investors, linked funds (A: 012862; C: 012863) are available to seize the “second spring” opportunity in the battery sector.

Risk reminder: Funds carry risks; investments should be cautious. Past performance does not predict future results, and the performance of other funds managed by the fund manager does not guarantee future performance. The fund manager manages and operates the fund assets in good faith, with honesty and diligence, but does not guarantee profits or minimum returns. Investors should carefully read the “Fund Contract,” “Prospectus,” and other legal documents for detailed product information. Hui Tianfu (516290) photovoltaic ETF is a high-risk product (R4), suitable for investors with a risk profile of aggressive (C4) or above after risk assessment. The product’s risk matching rules are detailed on Hui Tianfu’s official website. The underlying index does not fully represent the entire stock market. The average return of the index’s constituent stocks may deviate from the overall market. Investors should be aware of risks related to index-based investing, concentration risk from large weights in certain stocks, ETF operation risks, and specific risks associated with targeted investments. When purchasing through distributors, the risk rating rules of the distributor shall prevail. This product is issued and managed by Hui Tianfu Fund Management Co., Ltd., and the distributors do not bear investment, payment, or risk management responsibilities. When subscribing or redeeming ETF units, authorized brokers may charge a commission up to 0.50%, including related fees from stock exchanges and registries. For other funds, please refer to the respective prospectuses and product summaries.