Summary of Key Points from the Conference Call on China Power Equipment Industry Overview - The conference call focused on the China power equipment sector, particularly the outlook for grid capital expenditure (capex) during the 15th Five-Year Plan (FYP) [2][4][5]. Core Companies Discussed 1. **Nari Technology** - Top pick for 1H26 due to a valuation gap of ~30% compared to peers and improving earnings momentum [2][4]. - Expected earnings growth to accelerate from <10% (2023-2025) to mid-teens % (2026-2028) [4]. - Current valuation at 21x 2026E P/E, which is attractive compared to peers [4]. - Elevated expenses are a concern, but disciplined cost control and potential share incentive schemes may enhance earnings [4]. 2. **Sieyuan Electric** - Strong earnings growth forecasted at ~40% for the current year, driven by capacity expansion and new orders [2][4]. - Expected earnings CAGR of ~30% from 2026E-2028E at a <30x 2027E P/E [4]. - New capacity in high-voltage transformers and ESS orders are key growth drivers [4]. 3. **Huaming Equipment** - Less immediate upside compared to Nari and Sieyuan, with a >30x 2026E P/E and <20% earnings CAGR during the 15th FYP [5]. - Approximately one-third of revenue is tied to China's industrial demand, which is currently weak [5]. 4. **Xuji Electric** - Positive outlook due to expected benefits from UHV deployment and distribution grid development [41][46]. - Price target raised to Rmb33 from Rmb31.50, reflecting higher grid capex assumptions [36][42]. Key Insights from the Expert Call - Investment focus areas include UHV, secondary equipment, and distribution capex [4][5]. - UHV capex is projected to increase from Rmb380 billion during the 14th FYP to over Rmb500 billion during the 15th FYP [4]. - Strong demand for relay protection, power dispatch automation, and related systems is anticipated [5]. - Transmission and distribution fees are expected to remain stable to support State Grid's capital growth [5]. Financial Projections and Valuations - **Nari Technology**: Price target raised to Rmb30 from Rmb28.50, reflecting a 1% earnings trim for 2026E but a 2-6% increase for 2027E-2028E [16]. - **Sieyuan Electric**: Price target increased to Rmb215 from Rmb180, with earnings lifted by 10-13% for 2026E-2027E [15]. - **Huaming Equipment**: Price target remains at Rmb33, with earnings tweaked by -3% to +1% for 2025E-2028E [22][30]. - **Xuji Electric**: Price target raised to Rmb33, reflecting a ~19x 2027E P/E [42][46]. Performance Metrics - The average share price increase for covered power equipment companies is ~20% YTD, compared to SHCOMP's ~5% [2]. - Sieyuan Electric's earnings growth is expected to be robust, driven by new capacity and project wins in the US market [4]. Risks and Considerations - Potential risks include slower-than-expected domestic revenue growth, lower overseas demand, and fluctuations in exchange rates and freight costs [32][48]. This summary encapsulates the key points discussed during the conference call, providing insights into the current state and future outlook of the China power equipment industry.

Core Viewpoint - The implementation of the new "Management Measures for the Recognition of Enterprise Technology Centers" aims to enhance the technological innovation capabilities of enterprises and strengthen their role as the main body of technological innovation, promoting the deep integration of technological and industrial innovation [2] Group 1: Policy Changes - The new management measures reduce the frequency of recognition for enterprise technology centers from annually to every two years, and significantly raise the criteria for recognition, such as increasing annual R&D expenditure from no less than 15 million to no less than 30 million yuan [2] - The original value of instruments and equipment required for recognition has been increased from no less than 20 million to no less than 30 million yuan, emphasizing a comprehensive evaluation of innovation investment, conditions, results transformation, and talent [2] Group 2: Industry Support and Development - The provincial government supports leading enterprises like Super Fusion and Zhongchuang Zhiling to enhance their industrial technological innovation capabilities and encourages the formation of innovation alliances among major enterprises [3] - By the end of 2025, the province aims to cultivate 102 national-level and 1,436 provincial-level enterprise technology centers, with a focus on sectors such as equipment manufacturing, chemicals and new materials, electronic information, and biomedicine [3] Group 3: Resource Aggregation - The province has gathered over 200,000 research and development personnel through national and provincial enterprise technology centers, accounting for approximately 16% of total enterprise employees, and holds over 40,000 valid invention patents [4] - More than 3,400 international, national, and industry standards have been developed in the last three years, and over 500 laboratories and testing institutions have received national or international certification [4] Group 4: Innovation Outcomes - Enterprises are successfully transitioning innovations from laboratories to industrial applications, with Zhongchuang Zhiling developing the first fully autonomous intelligent mining equipment in China, achieving over 40% market share [5] - Multi Fluor has iterated its lithium hexafluorophosphate technology to the 3.5 generation, maintaining a purity level of 99.999%, while Zhonggang Luonai has developed efficient waste incineration power generation equipment, breaking foreign technology monopolies [5] - The provincial development and reform commission plans to optimize recognition standards for enterprise technology centers and enhance support for those with strong innovation capabilities and demonstrable results [5]

Investment Rating - The report maintains a "Recommended" rating for key companies in the electric equipment and new energy sector, including Ningde Times, Kodali, and others [6][7]. Core Insights - The electric equipment and new energy sector experienced a decline of 5.10% in the past week, underperforming the Shanghai Composite Index. The lithium battery index saw the smallest drop at 1.03%, while the nuclear power index faced the largest decline at 8.96% [1]. - A significant development is the mass production of aviation-grade solid-state batteries by XWANDA, which includes two product lines with energy densities of 320Wh/kg and 380Wh/kg, aimed at various applications including eVTOLs [2][15]. - The National Development and Reform Commission and the National Energy Administration have announced a new capacity compensation mechanism for power generation, expanding the scope to include various energy sources and enhancing market-oriented reforms [3][37]. Summary by Sections New Energy Vehicles - XWANDA has achieved mass production of aviation-grade solid-state batteries, with Gen1 targeting lightweight drones and Gen2 designed for eVTOLs, featuring a 10-minute fast charge and a range of 320km [2][15]. - The company plans to introduce a Gen3 battery with over 400Wh/kg energy density by 2026 and a 500Wh/kg all-solid-state battery by 2027 [15][19]. New Energy Generation - The new capacity compensation mechanism aims to create a more market-oriented and unified system, allowing various energy sources to participate in capacity compensation [3][38]. - The mechanism will assess the "reliable capacity" based on actual peak output rather than installed capacity, enhancing the scientific evaluation of capacity value [38][39]. Electric Equipment and Automation - Hunan Province plans to invest 45.2 billion yuan in 2026 to accelerate the construction of 24 key energy projects, including the "Xinjiang Electricity into Hunan" project [4]. - The China Electric Power Research Institute has successfully scaled up the application of high-performance transformer protection technology in national grid projects [4]. Commercial Aerospace - SpaceX is seeking to deploy a constellation of up to 1 million satellites to create an orbital AI data center, supporting large-scale AI applications globally [5]. Company Earnings Forecasts - Key companies such as Ningde Times and Kodali are projected to have increasing earnings per share (EPS) from 2024 to 2026, with recommended ratings indicating strong future performance [6].

Investment Rating - The report maintains a "Recommended" rating for key companies in the electric equipment and new energy sector, including Ningde Times, Kodali, and others [6][7]. Core Insights - The electric equipment and new energy sector experienced a decline of 5.10% in the past week, underperforming the Shanghai Composite Index. The lithium battery index saw the smallest drop at 1.03%, while the nuclear power index faced the largest decline at 8.96% [1]. - A significant development is the mass production of aviation-grade solid-state batteries by XWANDA, which includes two product lines with energy densities of 320Wh/kg and 380Wh/kg, targeting various applications including eVTOLs [2][15]. - The National Development and Reform Commission and the National Energy Administration have announced a new capacity compensation mechanism for power generation, aiming to create a more market-oriented and unified system [3][37]. Summary by Sections New Energy Vehicles - XWANDA has achieved mass production of aviation-grade solid-state batteries, with Gen1 (320Wh/kg) for lightweight drones and Gen2 (380Wh/kg) for eVTOLs, featuring fast charging and high safety standards [2][15][19]. - The company plans to introduce Gen3 batteries with over 400Wh/kg energy density by 2026 and 500Wh/kg full solid-state batteries by 2027 [15][21]. New Energy Generation - The new capacity compensation mechanism expands the scope to include coal and gas power, as well as independent storage resources, promoting a more scientific and market-driven approach [3][38]. - The mechanism aims to unify compensation standards based on actual peak output capabilities rather than installed capacity, enhancing the reliability of power supply [38][39]. Electric Equipment and Industrial Control - Hunan Province plans to invest 45.2 billion yuan in 2026 to accelerate the construction of 24 key energy projects, including high-voltage transmission projects [4]. - The China Electric Power Research Institute has successfully scaled up the application of high-performance transformer protection technology in major power projects [4]. Commercial Aerospace - SpaceX is seeking to deploy a constellation of up to 1 million satellites to create an orbital AI data center, indicating a significant advancement in commercial aerospace [5]. Market Performance - The report highlights key companies to watch, including Ningde Times, Kodali, and others, as they navigate the current market dynamics [12].

Group 1: Industry Overview - The Chinese power equipment sector has shown strong performance since the beginning of 2026, with an average stock price increase of approximately 20%, significantly outperforming the Shanghai Composite Index's 5% rise during the same period [1] - The robust performance is supported by unexpected capital expenditure in the power grid and sustained strong export demand, indicating a new golden development cycle for the power equipment industry [1] Group 2: Investment Outlook - The "14th Five-Year Plan" outlines a clear investment blueprint for the power grid, with a significant increase in investment in ultra-high voltage (UHV) projects, expected to rise from 380 billion yuan to over 500 billion yuan during the "15th Five-Year Plan" [2] - The investment structure will focus on three core areas: UHV projects, secondary equipment, and distribution network construction, with a projected annual growth rate of 8%-10% in grid investment during the first two years of the "15th Five-Year Plan" [2] Group 3: Key Companies - Morgan Stanley has given an "overweight" rating to four leading power equipment companies, ranking them based on business layout, growth potential, and valuation advantages: NARI Technology/Siyuan Electric > Huaming Equipment > XJ Electric [3] Group 4: NARI Technology - NARI Technology, a core enterprise under the State Grid, is expected to benefit significantly from the acceleration of grid automation and digital transformation, with a projected average net profit growth rate rising from below 10% to mid-double digits from 2023-2025 to 2026-2028 [4] - The current valuation of NARI Technology is attractive, with a projected P/E ratio of 21 times for 2026, offering a 30% discount compared to peers [4] Group 5: Siyuan Electric - Siyuan Electric, a leading private power equipment company, is expected to maintain a high profit growth rate of 40% in 2026, driven by capacity expansion in high-voltage transformers and the launch of a new energy storage factory [5][6] - The company is expanding its overseas market presence, with plans for new factories in Saudi Arabia and potential expansions in Mexico and Hungary [6] Group 6: Huaming Equipment - Huaming Equipment is the absolute leader in the transformer tap changer market, with over 60% market share, and is expected to achieve a net profit compound growth rate of about 20% during the "15th Five-Year Plan" [7] - The company has a stable profit foundation due to high entry barriers in the industry, although its stock price may have less upward elasticity compared to NARI Technology and Siyuan Electric [7] Group 7: XJ Electric - XJ Electric, a key supplier in the power equipment sector, is expected to benefit from overall increases in China's grid investment and improvements in average selling price and gross margin from new generation electric meters [8] - The company's net profit growth rate is projected to reach 28% in 2026, with a P/E ratio of 19.7 times, indicating a relatively low valuation within the industry [8]

Group 1 - The article discusses the emergence of a new power system that integrates safety, green energy, and efficiency, while optimizing the electricity market and establishing a reliable capacity compensation mechanism [5][6]. - It highlights the importance of categorizing and improving coal, gas, pumped storage, and new energy storage capacity pricing [5]. - The article lists various companies involved in the power equipment sector, indicating a diverse range of players in the market [6].

hyzqdatemark 2026 年 01 月 30 日 证券研究报告 电力设备 行业点评报告 证券分析师 查浩 SAC：S1350524060004 zhahao@huayuanstock.com 刘晓宁 SAC：S1350523120003 liuxiaoning@huayuanstock.com 戴映炘 SAC：S1350524080002 daiyingxin@huayuanstock.com 豆鹏超 doupengchao@huayuanstock.com 板块表现： 电网投资持续位居高位 储能装机高景气 投资评级： 看好（维持） ——电力设备 2025 年业绩前瞻 投资要点： 风险提示：产品毛利率水平低于预期；项目跨期交付风险；竞争格局恶化风险 资料来源：Wind，华源证券研究所。注：除已出业绩预告的公司（华明装备）外，其余公司 2025 年归母净利润预测均来自华源证券研究所 请务必仔细阅读正文之后的评级说明和重要声明 第 2页/ 共 3页 请务必仔细阅读正文之后的评级说明和重要声明 电网设备："十五五"国网投资有望再上台阶。按照 Wind 口径，2025 年前 11 个 月电网投资完成额 56 ...

Core Viewpoint - The article highlights the journey of Li Zhiyuan, the founder of Jinpan Technology, as he prepares for the company's third IPO, showcasing his strategic vision and the company's growth in the power equipment sector [2][9][10]. Company Background - Jinpan Technology, founded in 1993 by Li Zhiyuan in Haikou, initially focused on manufacturing dry-type transformers, which are essential for stable power transmission [4]. - The company expanded its operations to include a full range of power distribution equipment and has established production bases in multiple cities, becoming a key player in the domestic power equipment industry [5]. Business Development - In 2021, Jinpan Technology successfully listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board, marking a significant milestone as the first company from Hainan to do so [6]. - The company has transitioned from traditional manufacturing to smart manufacturing, focusing on digitalization and energy storage solutions to meet the growing demand for renewable energy [6][8]. Financial Performance - In 2024, Jinpan Technology reported a revenue of 6.901 billion yuan, a year-on-year increase of 3.5%, and a net profit of 574 million yuan, up 13.82% [12]. - The company's overseas sales reached 1.981 billion yuan, a significant increase of 68.26%, compensating for a slowdown in domestic sales [12]. Strategic Initiatives - Jinpan Technology is preparing for its third IPO in Hong Kong, which is expected to enhance its international presence and attract more overseas investment [9][15]. - The company emphasizes the importance of digital transformation and innovation, with a focus on artificial intelligence and new energy technologies [15][20]. Market Position - Jinpan Technology has established a strong market presence, with its products sold in 87 countries across six continents, and holds a leading market share in several segments, including dry-type transformers and data center power equipment [12][19]. - The company faces competition from established players in the domestic market but aims to leverage its global layout and digital manufacturing capabilities to maintain its competitive edge [20][21]. Future Outlook - The company is well-positioned to capitalize on the growing demand for clean energy and digital infrastructure, with expectations of significant growth in the energy storage and data center sectors [18][20]. - Jinpan Technology's commitment to long-term strategies and continuous R&D investment is expected to strengthen its market position and drive future growth [20][22].

Investment Rating - The report maintains an "Overweight" rating for the power equipment and new energy industry, indicating that the industry index is expected to outperform the market index by more than 10% in the next six months [2][72]. Core Insights - The power equipment industry is entering a new development phase, driven by significant investments in smart grids, renewable energy integration, and digital transformation technologies such as big data and artificial intelligence [6][21]. - The "14th Five-Year Plan" anticipates a fixed asset investment of 4 trillion yuan by the State Grid Corporation, a 40% increase from the previous plan, aimed at enhancing the new power system's supply chain and achieving carbon peak goals [6][63]. - Global investment in power grids is projected to grow significantly, with an estimated annual investment of $330 billion in 2023, requiring a compound annual growth rate of 9.4% to reach $620 billion by 2030, presenting new opportunities for domestic power equipment companies [6][66]. Summary by Sections 1. New Development Phase of the Power Equipment Industry - The construction of power grids is crucial for the development of the power industry, encompassing substations and power line construction, with a focus on efficient, energy-saving, and environmentally friendly equipment [6][21]. - The transition to a new power system in China emphasizes renewable energy, with significant investments planned for smart grid infrastructure and digitalization [6][63]. 2. Global Power Industry Opportunities - The "14th Five-Year Plan" marks a new rapid construction phase for ultra-high voltage (UHV) projects, driven by the need for clean energy transmission from western and northern regions to load centers in the east and south [6][45]. - The global power grid investment landscape shows a substantial growth potential, particularly in emerging markets, with a pressing need for modernization and upgrades to accommodate renewable energy sources [6][60]. 3. Investment Strategies and Key Companies - The report suggests focusing on leading companies in technology and scale that are likely to benefit from the global energy transition, including Guodian NARI (600406), XJ Electric (000400), and others [6][66].

Core Insights - The "14th Five-Year Plan" includes a significant investment of 4 trillion yuan in ultra-high voltage (UHV) infrastructure, which is expected to drive the A-share UHV sector to new heights, with the sector index rising from around 2700 points at the beginning of the year to over 5000 points, outperforming the broader market [1][2] - The investment plan represents a 40% increase compared to the previous five-year plan, focusing on UHV direct current transmission channels and smart distribution networks, indicating a golden era for the UHV industry [2][3] Investment and Market Dynamics - Leading stocks in the UHV sector, such as XJ Electric, Pinggao Group, and China XD Electric, have seen price increases exceeding 35%, with an overall rise of over 60% in the past year [2] - The National Grid's investment plan aims to enhance cross-regional transmission capacity by over 30% before 2030, addressing structural imbalances in energy resource distribution across China [4][8] Technological Advancements - Continuous technological innovations are enhancing the efficiency and reliability of UHV systems, exemplified by the ±800 kV flexible direct current project, which improves grid stability and adaptability to renewable energy fluctuations [6][19] - The global energy transition is creating historical opportunities for UHV technology to expand internationally, particularly in Europe, where energy security concerns are driving demand for UHV infrastructure [8][9] Industry Structure and Key Players - The UHV industry exhibits a "dumbbell" structure, with core equipment and materials at the upstream and grid construction and operation at the downstream, creating a capital and technology-intensive ecosystem [13] - Major companies like State Grid, Southern Grid, and key equipment manufacturers are expanding their international market presence, with annual investments in UHV projects along the Belt and Road Initiative expected to reach approximately 400 billion yuan [12][34] Financial Performance and Growth Projections - Companies like Guodian NARI and Pinggao Electric are showing robust financial growth, with Guodian NARI reporting a revenue increase of 18.45% year-on-year in the first three quarters of 2025 [35][37] - The UHV sector is projected to benefit from a historical high in national grid investment, expected to reach 608.3 billion yuan in 2024, with a year-on-year growth of 15.3% [28][31] Future Outlook - The UHV sector is poised for significant growth driven by the "14th Five-Year Plan" investments and the ongoing development of international markets, particularly in regions like Southeast Asia and Europe [41] - The establishment of a new power system is expected to further integrate flexible direct current and mixed AC/DC distribution networks, promoting efficient, intelligent, and green energy solutions [33][41]