What are the new energy stocks in Taiwan? Investment opportunities under the rise of the green energy industry

Why Taiwan’s New Energy Stocks Are Worth Watching

Taiwan’s energy transition is at a critical stage. According to data from the Ministry of Economic Affairs’ Energy Bureau, renewable energy accounted for only 8.27% of Taiwan’s power system in 2022, far below the over 40% level in advanced European countries, and even less than neighboring Asian countries. This apparent disadvantage actually signifies a huge growth potential opening up.

More notably, Taiwan imports 97.3% of its energy consumption, with an energy self-sufficiency rate of only 2.7%. Against the backdrop of escalating international energy prices and rising geopolitical risks, developing local renewable energy has become a national strategic necessity. The government has explicitly set targets for 2025: 20GW of solar photovoltaic installations and 5.6GW of offshore wind power, striving to increase renewable energy’s share of electricity generation to 15.1%.

Industry Policy Boosts, New Energy Stocks Enter a Windfall

Taipower has launched the “Strengthening Grid Resilience Construction Plan” with a scale of NT$564.5 billion, encompassing transformer and grid equipment upgrades across the entire industry chain. Simultaneously, infrastructure for electric vehicles—such as charging stations—continues to see rising demand.

The recently passed U.S. Inflation Reduction Act allocated US$369 billion for energy transition, with an expected 69% increase in solar capacity over 10 years. This directly benefits major Taiwanese solar manufacturers. In short, which new energy stocks are worth paying attention to depends on who can seize these structural opportunities.

Growth Logic of Four Major New Energy Stocks

Delta Electronics (2308) is an invisible champion in energy transformation. While more known for its electronic products, Delta’s energy storage systems are crucial in renewable energy—solar and wind output fluctuations require storage to stabilize grid supply. Among the top 20 global automakers, 75% are its clients. As EV penetration increases, automotive electronics become a new revenue engine. In the first half of 2023, revenue hit a new high for the same period, up 8% year-over-year, mainly driven by the EV division.

Sungrow Power Supply Co. (6806) focuses on solar and wind power development, offering one-stop services from site survey to operation and maintenance. Although 2022 performance was volatile, a clear turnaround occurred in 2023. Benefiting from revenue recognition from Taipower’s offshore wind phase II project, April revenue surged to NT$774 million. Over the next two years, phased revenue recognition from projects is expected to expand profitability.

Hwa Chong (1519) is a long-term supplier to Taipower’s grid, with two major growth points: first, its grid upgrade plans directly benefit sales of transformers and related products; second, Hwa Chong controls nearly 20% of Taiwan’s EV charging station market, with first-half revenue up 35% year-over-year to a new high. Although the stock has already risen 242% and faces potential correction risk, the long-term logic remains valid.

Motech Industries (5483), as a major Taiwanese solar manufacturer, saw its solar business revenue surpass NT$10 billion in 2022, up 34.5% year-over-year to NT$102.5 billion. New U.S. policies are expected to open larger markets for it. Although currently affected by falling upstream raw material prices, this presents an opportunity window for strategic布局.

The Double-Edged Nature of Investing in New Energy Stocks

Attractions: Renewable energy aligns with ESG investment trends, supported by government subsidies and tax incentives; with global carbon neutrality trends, growth potential is huge; this sector has low correlation with traditional industries, effectively diversifying investment portfolio risks.

Risks: Many renewable energy companies are in expansion phases, with less stable dividend performance, and stock price volatility is significantly higher than traditional industries; industry competition is intensifying, making stock selection more challenging; as an emerging sector, it lacks options and other hedging tools, limiting risk management methods.

The Proper Approach to Investing in New Energy Stocks

What new energy stocks are available, and how to participate is key. Investing in this sector requires mental preparation: first, be ready for long-term investment rather than short-term gains; second, control the size of individual positions, especially for early-stage green energy startups, with strict risk management; third, closely monitor policy changes and raw material price fluctuations, adjusting holdings at critical points.

Taiwan’s new energy industry is in a historic opportunity period. On the supply side, policy support and capital investment are strong; on the demand side, global energy transition and local energy security needs are converging, creating a dual drive for valuation and growth. For patient and insightful investors, now is a great time to understand and布局 this track.