Goldman Sachs raises target prices for China solar cell equipment stocks: Maxwell upgraded to Buy, SZSC to Neutral

Overview

This report focuses on order momentum and valuation re-rating for Chinese solar cell equipment companies under high-efficiency cell new application scenarios. Goldman Sachs believes that recent trial orders and expansion plans disclosed by several Chinese module and equipment companies have improved order visibility and earnings prospects for leading equipment makers. Although related stocks had already risen from early January to mid-March on expectations of a new TAM and then pulled back on order-execution concerns, the report argues that the post-pullback risk/reward has become more attractive.

Core views

The core view is: first, high-efficiency solar cell technologies related to new applications are transferable and are not limited to LEO satellites, but may also be used in scenarios such as smart locks, EV glass roofs, and BIPV facades, so the assumption of 18GW of incremental orders in 2026E-2027E is still considered reasonable; second, Maxwell benefits most directly from its leadership in HJT technology and has greater order and profit leverage, so it is upgraded to Buy; third, SZSC also benefits from PSC orders and overseas orders, but PSC competition is more intense and adoption is farther out, making the risk/reward more balanced, so it is upgraded to Neutral; fourth, valuation shifts from a single-core-business multiple to a SOTP EV/EBITDA framework to capture the option value of new application businesses.

Analysis framework

The report combines order flow, capex forecasts, earnings revisions, EV/EBITDA multiples, and SOTP valuation. Based on expansion plans disclosed by equipment and module companies, Goldman Sachs incorporates annual trial orders of 7GW of HJT and 2GW of PSC in 2026E-2027E, and annual PSC orders of 4GW in 2028E-2030E. It then assesses the impact of these orders on revenue, gross margin, SG&A efficiency, and EBITDA for Maxwell and SZSC, and derives target EV/EBITDA multiples by weighting core business and new application business segment multiples.

Methodology notes

• Valuation methodsSOTP EV/EBITDA

  Values core business and new application business separately using different EV/EBITDA multiples, then combines them.

  Maxwell's core business is assigned 15X and its new application business 85X, resulting in a 25X target 2027E EV/EBITDA. SZSC's core business is assigned 7X and its new application business 45X, resulting in a 12X target 2027E EV/EBITDA.

• Order forecastMapping solar capex to order flow

  Uses solar cell capex and equipment order flow to forecast revenue recognition for equipment makers.

  The report notes that newly signed orders usually move in line with solar cell capex trends and are reflected in contract liabilities and inventories; order revenue recognition generally lags by 3 to 5 quarters.

• Scenario analysisSensitivity analysis for new application orders

  Assesses the upside and downside impact of different new application order sizes on target prices.

  If Maxwell and SZSC secure more new application orders, their target prices could rise by 76% and 73%, respectively, versus current targets. If orders disappoint or the technology roadmap shifts, valuations could revert to core-business levels, implying 52% and 47% downside, respectively.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Suzhou Maxwell (300751.SZ)

  One of the core covered companies in the report; upgraded to Buy.

  Strengths

  Global HJT market share above 70% and screen-printing equipment share above 80% over the long term; new application and overseas HJT orders may boost order value, gross margin, and SG&A efficiency.

  Weaknesses

  Still faces pressure on its core business from declining Chinese solar capex and anti-involution conditions.

  Comparison

  Compared with SZSC, Maxwell has a more prominent leadership position in new-application-related HJT technology, so Goldman Sachs assigns it a higher 85X new application business multiple and a Buy rating.

  Risks

  New application demand coming in below expectations, order cancellations, tighter export controls, and slower-than-expected semiconductor equipment business development.

• SZSC

  One of the core covered companies in the report; upgraded to Neutral.

  Strengths

  Global Topcon equipment share above 50% and PSC share around 40%; overseas orders and PSC trial orders help improve order visibility and earnings prospects.

  Weaknesses

  PSC competition is more intense, new application adoption is further out, and order visibility is lower than Maxwell's.

  Comparison

  Compared with Maxwell, SZSC has a more cautious rating; its new application business multiple is 45X, and although the target price is raised, it still implies downside.

  Risks

  PSC adoption slower than expected, intensifying competition, orders missing market expectations, and valuation reverting to core-business levels.

• China solar equipment industry

  The industry backdrop and the main theme of valuation re-rating covered by the report.

  Strengths

  High-efficiency cell technologies can be transferred to satellites, EV glass roofs, BIPV, and other new applications, and trial orders may improve order flow and margins.

  Weaknesses

  Traditional domestic solar capex remains pressured by the downcycle and anti-involution policies.

  Comparison

  Leading equipment makers face lower execution risk than lower-tier customer orders in the previous downcycle because of better customer quality, smaller size, and stronger technological barriers.

  Risks

  Order delays or cancellations, longer customer acceptance cycles, receivables and inventory impairments, and technology-roadmap shifts.

Key data

• Maxwell rating changeSell to BuyThe 12-month target price was raised from Rmb63 to Rmb263, implying 22% upside to the revised target.
• SZSC rating changeSell to NeutralThe 12-month target price was raised from Rmb51.8 to Rmb100, implying 11% downside to the revised target.
• Solar capex forecast revision2026E-2027E up 11%; 2028E-2030E up 3%Reflects annual trial orders of 7GW HJT and 2GW PSC in 2026E-2027E, and annual PSC orders of 4GW in 2028E-2030E.
• Incremental order assumption18GW in total for 2026E-2027EThe report believes this is higher than recent MW-level LEO satellite demand, but transferability of the technology and lower execution risk support the assumption.
• EBITDA forecast upgradesAverage increase of 129% for Maxwell; 54% for SZSCCovers 2026E-2030E and reflects higher revenue, better gross margin, and a richer order mix.
• Target EV/EBITDAMaxwell 25X; SZSC 12XPrior multiples were 15X and 7X, respectively.
• New application business multiplesMaxwell 85X; SZSC 45XUsed to value the new application businesses in the SOTP framework.
• Orders already priced inMaxwell 4GW/year; SZSC 2GW/yearThe market is estimated to have already priced in 2026E-2027E new application orders; Maxwell is below Goldman Sachs' 7GW/year forecast, while SZSC is in line with Goldman Sachs' 2GW/year forecast.
• Maxwell market shareHJT above 70%; screen-printing equipment above 80%The report cites this as a key reason why the risk/reward profile improves in new application scenarios.
• SZSC market shareTopcon above 50%; PSC around 40%The report believes SZSC has a solid technological position, but PSC competition and adoption timing add more uncertainty.

Impact & implications

The investment implication is that valuation drivers for solar equipment stocks are shifting partly away from the traditional domestic PV capex cycle toward new application orders for high-efficiency cells, overseas orders, and technology-roadmap selection. Maxwell receives the more constructive rating because of its HJT leadership and clearer order leverage. Although SZSC's target price is also raised substantially, its risk/reward remains more balanced because PSC competition is stronger and commercialization may not accelerate until 2028E or later. For investors, order-award progress, adoption of new application technologies, and overseas policy restrictions will be key stock-price sensitivity variables.

Risks

• Weaker-than-expected demand for new applications could reduce enthusiasm for trial-order capex and lead to order cancellations or delays.
• Announced expansion plans could be canceled or delayed, which the report says may trigger downward earnings revisions after 5 to 7 quarters.
• Orders may still be canceled after settlement; if canceled before production, the impact on earnings could show up after 3 to 5 quarters, while cancellations after production could lead to inventory impairments.
• Equipment acceptance cycles may lengthen, increasing days sales outstanding for equipment makers and, in the worst case, causing credit impairment.
• Tighter solar equipment export controls could weaken Maxwell's overseas orders and margin expansion.
• More intense PSC competition or slower-than-expected new application adoption could pressure SZSC's orders and valuation.
• If the new application technology roadmap shifts toward areas outside the equipment makers' focus, valuations may revert to core-business levels.

What to watch

• Whether Maxwell can secure close to or more than 7GW/year of HJT new application orders in 2026E-2027E.
• The visibility and execution pace of SZSC's PSC orders in 2026E-2027E and beyond 2028E.
• Progress in the adoption of HJT and PSC technologies in LEO satellites, EV glass roofs, BIPV facades, and other new applications.
• Whether overseas solar equipment orders, deliveries, and gross margins support Goldman Sachs' earnings upgrades for Maxwell and SZSC.
• Pressure on core-business multiples and orders from the decline in Chinese solar capex and anti-involution policies.
• Whether order cancellations, delays, customer acceptance, and receivables cycles worsen.
• The impact of export controls and overseas localization policies on Chinese equipment makers' export orders.