Taiwan Energy Stocks Rise: Investment Opportunities in Green Energy Leaders

Taiwan’s energy stocks are迎来 unprecedented development opportunities. Against the backdrop of global net-zero carbon emissions and energy transition, Taiwan is accelerating the promotion of new energy strategies, creating significant space for listed companies involved in solar, wind, energy storage, and electric vehicle ecosystems.

As an investor, should you now pay attention to this wave of energy stocks? The answer may be clearer than you think.

The Reality and Ambition of Taiwan’s Energy Transition

Data speaks for itself. According to the latest statistics from the Ministry of Economic Affairs’ Energy Bureau, in 2022, coal and natural gas still accounted for 80.88% of Taiwan’s total power generation, with renewable energy contributing only 8.27%. This gap is明显 compared to advanced European countries—UK and Germany reaching 43% and 44%, respectively—and even neighboring China in Asia has 32%.

But what does this precisely mean? Huge potential.

The government has明确提出 the “2025 Non-Nuclear Homeland” goal, which means that the 8.24% share of nuclear energy must be replaced by other energy sources. By then, the proportion of renewable energy in the power system needs to rise to about 15.1%—which几乎 means doubling renewable energy installed capacity within just three years.

Another不可忽视的背景 is that Taiwan imports 97.3% of its energy consumption, with only 2.7% produced domestically. In an era of international turbulence and frequent energy price fluctuations, developing domestic new energy is no longer just an environmental issue but also a matter of energy security.

Four Major Energy Stocks Worth Watching

Delta Electronics (2308)

Many people only know Delta Electronics for electronics and batteries, but overlook its技术 moat in energy storage. This is actually关键—solar and wind power output are inherently unstable, requiring energy storage systems for调节, otherwise large-scale green power推广难度大. Delta’s energy storage solutions正好卡在 this critical point.

Plus, Delta’s automotive electronics products have already gained规模, with 75% of the top 20 global automakers as clients. As EV penetration increases and certification barriers rise, this业务的成长空间相当可观.

The performance in the first half of 2023证实了 this: June revenue reached NT$34.825 billion, up 8% year-on-year, hitting a record high for the same period, mainly driven by the EV sector. Revenue over the past three years shows an accelerating growth trend, so investors are advised to decisively抄底.

Senwei Energy (6806)

Focused on solar, wind, and new energy investment and development, Senwei Energy experienced a brief调整期 after completing its IPO in November 2022. The full-year revenue in 2022 was NT$4.301 billion, roughly flat compared to the previous year. But since 2023, the situation has明显改善.

The关键在于台电 offshore wind power Phase II project revenue开始确认. In April, monthly revenue hit NT$774 million, setting a new high. Revenue from this project will be逐步确认 over the next two years, meaning the company’s业绩有望大幅增长. For patient investors, now布局有望在 subsequent performance兑现时获得收益.

Hua Cheng (1519)

Hua Cheng is a长期合作伙伴 of Taiwan Power Company (Taipower) for grid projects and also the leader in Taiwan’s EV charging station industry, with nearly 20% market share.

In September 2022, Taipower announced a ten-year “Enhancement of Grid Resilience Construction Plan,” with a total investment of NT$564.5 billion for全面升级. As a主要供应商, Hua Cheng无疑是最大受益者. Meanwhile, demand for EV charging stations持续走高—June revenue NT$1.403 billion, up 50% year-on-year; first half revenue NT$4.643 billion, up 35%.

However, note that Hua Cheng’s stock price has already surged over 240% since the beginning of the year, and短期确实有回调压力. Investors might consider waiting for a更优惠的价格再介入.

United Renewable Energy (5483)

The US passed the Inflation Reduction Act last year, investing US$369 billion to support energy transition, the largest investment in US history for energy and climate. Industry forecasts suggest this law will推动美国太阳能装机量增加69% over the next decade.

As a major Taiwanese solar manufacturer, United Renewable Energy directly benefits. In 2022, solar business revenue reached NT$10.25 billion, up 34.5%,突破百亿大关 for the first time. Currently, the industry faces upstream raw material price declines,短期营收承压, but this is precisely an opportunity to布局. Once upstream prices stabilize, entering then will offer a better risk-reward ratio.

The Double-Edged Sword of Investing in Energy Stocks

The emerging energy sector has both attractive growth potential and risks that不能忽视:

Attractions

• ESG themes are increasingly favored by institutions; energy stocks aligned with sustainability are more likely to be included in funds
• Global demand for new energy continues to grow, Taiwanese companies are poised to share this dividend
• Government policies are明确支持, including subsidies and tax incentives
• Low correlation with traditional industries, effectively diversifying investment portfolios

Cautions

• Stock price volatility is significantly higher than traditional blue chips, heavily influenced by政策和能源价格
• Many companies are still in expansion phases, with performance fluctuations and unstable dividends
• Industry competition has entered a白热化 stage, making stock selection challenging
• Lack of hedging tools like options, limited risk management options

Investment Recommendations

The long-term logic for Taiwanese energy stocks is sound—government goals are明确, companies have strong技术, and global demand is robust. But in the短期, pay attention to几点:

First, fully认识风险. Companies focused solely on green energy are generally relatively新成立, with performance fluctuations inevitable. Control your buying pace and position size; avoid all-in.

Second, set a long-term mindset. New energy is a century-long计划, not suitable for短线炒作. After selecting leading companies, give them time for业绩兑现.

Third, patiently等待机会. Some high-quality companies’ short-term stock prices已反映部分预期, so waiting for a better entry point is advisable. Energy stocks不怕晚到, but怕买在高位还抄不到底.

Taiwan’s energy transition has just begun—moving from 8% renewable share to the目标的15.1%, this road is still long. Whether you can乘上这班车 depends not on how快 you react, but on how准 your选择 and whether you can守得住.