(Yicai) April 8 -- Businesses in China’s new energy sector are well-placed to weather the impact of the so-called reciprocal tariffs imposed by US President Donald Trump, according to an industry veteran.

From lithium batteries to photovoltaics and power storage equipment, Chinese companies have both technological and cost advantages, the person said. Moreover, due to targeted restrictions, these firms are already used to dealing with obstacles in foreign markets, particularly in the United States, they added.

Battery companies, for example, generate only about 5 percent to 10 percent of their revenue in the US, and for solar firms it is about 17 percent, the source said. But for most other businesses in the sector, the share is much lower, and wind power companies have next to no business in the US.

Shares of battery maker Sunwoda [SHE: 300207] closed up 1.6 percent at CNY16.96 (USD2.32) in Shenzhen today, after slumping 20 percent yesterday. The company said that after making a comprehensive and prudent assessment, the impact of the tariffs on its business will be relatively limited. 

Although Sunwoda’s overseas revenue in the first half of last year was CNY9.7 billion (USD1.32 billion), accounting for 40 percent of the total, some parts were not delivered directly to the US, and its orders are widely distributed to make the firm less dependent on any single market.

In addition, some listed new energy companies have been buying back shares to bolster market confidence. For example, battery giant Contemporary Amperex Technology said it intends to spend CNY4 billion repurchasing its own shares.

CATL’s stock [SHE: 300750] rose 1.8 percent to close at CNY219.05 (USD30) today, after sinking 11.5 percent yesterday.

There will be significant short-term upheaval in the stock market, the industry veteran told Yicai, saying “we should monitor it and respond promptly, but there’s no need to overemphasize the impact.”

In the medium-to-long term, stock prices are primarily driven by a company’s fundamentals, and the impact of any single sanction is relatively small, they added.

Lithium battery producer Eve [SHE: 300014] plummeted 13.9 percent yesterday, but ended 2.9 percent higher today at CNY40.54 (USD5.53) a share. The firm said that the US accounts for less than 4 percent of its sales, and higher US tariffs will not have a cost impact on the delivery of existing contracts.

In the long run, businesses will boost their overseas capacity and meet the needs of foreign customers through technology licensing and services, Eve added.

Editor: Tom Litting