Taiwan Energy Stocks Recommendation: Seize New Opportunities in Green Energy Investment

Why Focus on Taiwan’s New Energy Concept Stocks Now?

The wave of global energy transition is sweeping through every economy, and Taiwan is no exception. As international emphasis on sustainable development grows, the new energy sector—represented by solar, wind, energy storage, and electric vehicles—has become a new focus in capital markets. For Taiwanese investors, this is not only a follow-the-trend opportunity but also an urgent reality—Taiwan’s energy security pressures are accelerating the industry’s transformation.

Taiwan and the World: A Huge Gap in Energy Structure

According to the latest data from the International Energy Agency, in 2022, renewable energy accounted for nearly 30% of the global power system, a 1.5% increase from the previous year. But looking behind the numbers reveals Taiwan’s somewhat awkward position.

Globally, major economies have renewable energy shares of 43% in the UK, 44% in Germany, 31% in Australia, and even 22% in Japan, while Taiwan only has 8%. This figure reflects not only developmental stages but also—the core logic behind Taiwan’s energy stocks recommendation: enormous growth potential.

In 2022, Taiwan’s total electricity generation was 288.2 billion kWh, with coal and natural gas accounting for 80.88%, and renewable energy only 8.27%. More concerning is that energy imports account for 97.3% of total energy consumption, with domestic energy only 2.7%. In the current geopolitical risk environment, this ratio is clearly unsustainable.

Policy-Driven: The 2025 Energy Gamble

The Taiwanese government has made clear commitments. According to the Ministry of Economic Affairs’ Energy Bureau plan, the goal is to achieve a non-nuclear homeland by 2025, with renewable energy accounting for 15.1% of the country’s power generation. What does this mean? It indicates that within the next three years, Taiwan’s renewable energy sector has at least doubled in size.

More specific targets include: 20 GW of solar photovoltaic capacity and 5.6 GW of offshore wind capacity. To support these goals, Taipower announced in September 2022 a 10-year grid reinforcement plan with an investment scale of NT$564.5 billion. This is not just a paper commitment but real capital investment.

Recommended Energy Stocks: Four Companies to Watch

In this context, which companies have the most potential?

Delta Electronics (2308): Empowering Green Energy for a Tech Giant

When mentioning Delta Electronics, many first think of electronics products. Few realize that the company’s technological advantages are unleashing huge potential in the new energy sector.

What are the core challenges of solar and wind power? Power output instability. Compared to coal or gas generation, these clean energies require robust energy storage systems for regulation. Delta Electronics is an expert in this field, with energy storage and power management solutions already standard in renewable projects.

Another growth driver comes from automotive electronics. Delta has become a supplier for 75% of the top 20 global automakers. As EV penetration increases, this business segment’s growth potential is significant.

Data speaks: In June 2023, Delta’s consolidated revenue reached NT$34.825 billion, up 8% year-over-year, hitting a record high for the same period. Revenue over the past three years shows an accelerating trend—2020: NT$28.26 billion, 2021: NT$31.47 billion, 2022: NT$38.44 billion. This is not explosive growth but steady acceleration.

Sungrow Power Supply Co. (6806): A Full Industry Chain of Green Energy

Founded in November 2022, Sungrow initially showed modest performance (2022 revenue NT$4.301 billion, slightly down from the previous year), but starting in 2023, its momentum has sharply shifted.

The turning point came from recognition of engineering revenue from the second phase of Taipower’s offshore wind project. In April, monthly revenue hit NT$774 million, setting a new monthly high. More importantly, this project revenue will be gradually recognized over the next two years, significantly improving the company’s profitability visibility.

From solar PV and wind power development to turnkey power plant solutions and O&M, Sungrow offers integrated services. Under this model, the company’s growth is closely tied to the government’s energy targets.

Hua Cheng (1519): Dual Drivers of Grid Upgrades and EV Charging

Hua Cheng is a long-term partner of Taipower, supplying various power equipment for the grid. When Taipower invests NT$564.5 billion in grid reinforcement, Hua Cheng is bound to be a direct beneficiary.

But that’s only half the story. The other half comes from EV charging stations. Hua Cheng currently controls nearly 20% of Taiwan’s charging station market, leading the industry. As EV penetration continues to rise, demand for charging infrastructure is surging.

Performance already reflects this trend: June revenue NT$1.403 billion, up 50.15% year-over-year; first-half revenue NT$4.643 billion, up 34.96%. However, note that Hua Cheng’s stock price has risen 242.56% since the beginning of the year, with short-term correction pressures.

China Steel (5483): Direct Beneficiary of US Legislation

In August 2022, the U.S. Senate passed the Inflation Reduction Act, allocating US$369 billion to support energy transition. This is the largest climate and energy investment in U.S. history. According to the Solar Energy Industries Association, the bill is expected to increase U.S. solar capacity by 69% over the next decade.

As a major Taiwanese solar manufacturer, China Steel naturally benefits from this policy boost. In 2022, solar energy revenue exceeded NT$10 billion, reaching NT$10.25 billion, up 34.5%.

But the pressure in 2023 cannot be ignored—prices for polysilicon, wafers, and batteries are all declining across the industry chain. Short-term revenue may face pressure, but this is also a good time to accumulate chips.

The Reality of New Energy Stocks: Opportunities and Traps

Investing in new energy concept stocks requires a clear understanding of their characteristics. The advantages of this sector are obvious: benefiting from ESG investment trends, government policies, huge growth potential, and low correlation with other industries.

But the disadvantages are equally apparent and cannot be ignored: high stock price volatility, unstable performance and dividends, difficulty in choosing companies, and lack of hedging tools. Especially for companies focused solely on green energy, with shorter establishment periods, performance tends to be more volatile.

Investment Recommendations

For investors interested in Taiwanese energy stocks, here are some core suggestions:

First, recognize this as a long-term investment. New energy is not a century-long plan, but at least a decade. Short-term thinking can easily lead to losses in this field.

Second, manage risks carefully. Even companies with good prospects should be bought according to your risk tolerance and in controlled amounts.

Third, closely monitor policy developments. Taiwan’s 2025 energy goals, government subsidies, and corporate order confirmations will directly impact stock prices.

Fourth, review your holdings regularly. During energy structure transformation, technological progress and competitive landscape can change rapidly. Adjust your portfolio periodically—not out of greed, but rationality.

The investment opportunities in Taiwan’s new energy concept stocks are opening up. Seizing this opportunity requires not only enthusiasm but also patience and discipline.