The battery sector is surging against the trend, with energy substitution and production recovery driving the industry’s prosperity to improve.

March 20, the Energy Storage battery ETF (561910), with an energy storage content of over 60%, surged at the open. As of 10:07, it was up more than 2%. Among constituent stocks, Sungrow Electric rose more than 11%, while First Sail New Energy, Penghui Energy, and Faraday Technology all rose more than 7%. Against the backdrop of overall market turbulence, why has the energy storage sector strengthened against the trend? The main driving force comes from a dual resonance of “AI + energy,” compounded by catalysts from the traditional peak season in March, as industry sentiment accelerates upward.

The AI computing power boom has led to a surge in power demand, making the data center “power consumption” effect more prominent; Europe’s benchmark natural gas price surged from 31.96 euros/MWh to 59.57 euros/MWh within the past six trading days, up 86.4%. The high cost of fossil energy is forcing consumers to accelerate the shift toward alternative solutions of “solar photovoltaics + energy storage.” As a key infrastructure for shaving peak demand, filling valleys, and ensuring energy security, energy storage’s value is increasingly evident.

Overseas markets are booming. European residential energy storage subsidies (including in Hungary, the UK, etc.) continue to roll out, along with high gas prices stimulating demand. China’s energy storage companies recorded nearly 284GWh of overseas orders in 2025, with Europe ranking first at 61.82GWh. March is a traditional peak season for stocking, and the industry chain’s production and scheduling data shows an improvement quarter-over-quarter, with improved sentiment flowing through to the midstream manufacturing segment.

On the domestic front, the 2026 Government Work Report for the first time explicitly positions new-type energy storage as an “emerging pillar industry.” Nine provinces have implemented standalone energy storage capacity and time-of-use electricity pricing policies, clarifying profit models. According to CESA data: in January to February, newly added domestic new-type energy storage capacity was 9.51GW/24.18GWh, with a year-on-year capacity increase of 472%, confirming a high-growth trend.

With the fourfold positive catalysts of “AI power gap + geopolitical energy crisis + policy-driven force + traditional peak season stocking” in resonance, the energy storage sector’s fundamentals have already been confirmed to have entered an upward fast track. Production and scheduling are full across the upstream and downstream of the industrial chain, and there is extremely high certainty in earnings delivery.

From a valuation perspective, the current battery sector offers a relatively high margin of safety and investment value for money. Data shows that the CSI Batteries Thematic Index’s price-to-earnings ratio (PE-TTM) is currently about 32.63x. Historical percentile points indicate that this valuation level has been lower than 67% of the time over the past decade.

The energy storage content of the battery ETF (561910) tracked by the CSI Batteries Thematic Index is close to 60%. It includes industry leaders such as Sungrow Power Supply, CATL, EVE Energy, Gotion High-Tech, Sineng Intelligent, and Tianqi Lithium Materials. It covers upstream and downstream segments of the battery industry chain, including batteries for new energy vehicles, energy storage, and consumer electronics. Battery ETF (561910) Link A: 016019; Link C: 016020.

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