德业股份（605117）欧盟加码工商业储能装机落地，公司充分受益

Ningbo Deye Technology (605117.SS)Beneficiary of EU’s Commitment on C&I Energy Storage Deployment CITI’S TAKEOn 26 June 2026, the European Commission entered into the first-everEU tripartite agreementon energy storage, aiming to boost annual energy storage installations by at least 20% from 12GW in 2025, corresponding toapproximately 45GW to be installed in 2026-28. In particular, theagreement aims to boost battery installations in the C&I sector from9GWh in 2026 to 24GWh in 2028, indicating an annual installation of5GWh in 2027-28, doubling from that in 2025 of 2.3GWh. We reiterateBuy rating on Deye, expecting it to benefit from C&I battery storage (BESS)demand growth in Europe, as the company has an increasing sales mix ofESS inverters to C&I sectors (up from 19.4% in 2024 to 28.0% in 1Q26), of China Solar Sector Air MaAC+852-2501-7450air.ma@citi.com ever EU tripartite agreement on energy storage together with a number of EU energyministers, storage developers and manufacturers, renewable energy developers, pierre.lau@citi.com EU’s ambitious 2030 target– According to the agreement, it is estimated that compared with around 55GW of energy storage installed as of the beginning of 2026, See Appendix A-1 for Analyst Certification, Important Disclosures and Research Analyst Affiliations according to the European Commission. 22 EU Member States have committed to an indicative pace of annual storagedeployment at the EU level of approximately 30GW over the next two years. Implications for Deye– We expect Deye to benefit from EU’s energy storage commitment. Deye had approximately 42% revenuemix from Europe in 1Q26, including 40%+ from inverters and 50%+ from battery pack sales. Deye’s revenue mix of C&I ESS Bull/Bear: Ningbo Deye Technology Ningbo Deye TechnologyValuation Our target price for Deye of Rmb142.857/share is based on a DCF model, which we believe is a suitable valuation methodology as we expect sustainable growth in energy storage demand from emerging markets, from current low penetration levels. Ourmodel incorporates our forecasts for cash flows up to 2035E and assumes a terminal growth rate of 3.0%. We apply a WACC of8.4%, derived from a risk-free rate of 1.6%, a market risk premium of 8.9%, and an equity beta of 0.9x. Our target price equates Risks and C&I energy storage demand in emerging markets; (ii) fiercer-than-expected price competition among inverter peers; and(iii) higher-than-expected trade tariffs against Chinese inverter products in overseas markets. If you are visually impaired and would like to speak to a Citi representative regarding the detailsof the graphics in this document, please call USA 1-888-500-5008 (TTY: 711), from outside theUS +1-210-677-3788 Appendix A-1 ANALYST CERTIFICATIONThe research analysts primarily responsible for the preparation and content of this research report are either (i) designated by “AC” in the author block or (ii) listed in bold alongside content which is attributable to that analyst. If multiple ACanalysts are designated in the author block, each analyst is certifying with respect to the entire research report other than(a) content attributable to another AC certifying analyst listed in bold alongside the content and (b) views expressed solelywith respect to a specific issuer which are attributable to another AC certifying analyst identified in the price charts orrating history tables for that issuer shown below. Each of these analysts certify, with respect to the sections of the reportfor which they are responsible: (1) that the views expressed therein accurately reflect their personal views about each IMPORTANT DISCLOSURES activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates (the “Firm”).Compensation is not linked to specific transactions or recommendations. Like all Firm employees, analysts receivecompensation that is impacted by overall Firm profitability which includes investment banking, sales and trading, andprincipal trading revenues. One factor in equity research analyst compensation is arranging corporate access events between in such financial instruments (and any underlying instruments) and may act as principal in connection with transactions insuch instruments. The Firm is a regular issuer of traded financial instruments linked to securities that may have beenrecommended in the Product. The Firm regularly trades in the securities of the issuer(s) discussed in the Product. The Firm may Unless stated otherwise neither the Research Analyst nor any member of their team has viewed the material operations of theCompanies for which an investment view has been provided within the past 12 months. Research product ("the Product"), please contact Citi Research, 388 Greenwich Street, 6th Floor, New York, NY, 10013,Attention: Legal/Compliance [E6WYB6412478]. In addition, the same important disclosures, with the exception of theValuation and Risk assessments and h