Summary of Conference Call Records Company and Industry Involved - **Company**: 南瑞科技 (NARI Technology) - **Industry**: Power Grid and Energy Storage Key Points and Arguments NARI Technology and Power Grid Capital Expenditure - UBS is optimistic about NARI Technology due to the expected upward cycle in power grid capital expenditure from 2026 to 2030, with a projected compound annual growth rate (CAGR) of 7%, exceeding market expectations [1] - UBS's utility team considers the 7% CAGR a conservative baseline, suggesting that the actual CAGR could reach 11% due to accelerated construction of backbone and distribution networks [1][2] - Historically, NARI Technology's growth rate has been approximately double that of the national grid capital expenditure growth rate, and UBS believes this trend will continue during the current upward cycle [2] BYD and Export Growth - UBS reaffirms BYD's position in the "Best Investment Portfolio" due to strong export growth and the potential for its energy storage business [2] - Despite weak domestic sales in January, BYD's exports increased by over 50% year-on-year, nearly matching domestic sales [2] Energy Storage and Capacity Pricing Mechanism - The National Development and Reform Commission (NDRC) introduced a capacity pricing mechanism for independent energy storage projects, significantly enhancing their economic viability [3] - Under this framework, energy storage projects included in provincial project lists can receive capacity price compensation based on local coal power capacity prices, expected to be around 165 yuan/kW/year by 2026 [3] - This mechanism acknowledges the system reliability and capacity value of energy storage, improving the internal rate of return (IRR) for storage projects from approximately 3% to 8%, surpassing the 7% investment threshold for most state-owned enterprises [3] Industrial Green Microgrid Development - The Ministry of Industry and Information Technology (MIIT) and other departments released guidelines for the construction and application of industrial green microgrids from 2026 to 2030, clarifying applicable technologies and deployment models [4] - The guidelines position microgrids as active participants in the power system, capable of providing peak shaving, demand response, and ancillary services, transitioning from pilot concepts to scalable, policy-supported solutions [4] Green Power Direct Connection Policy - The National Energy Administration (NEA) has prioritized multi-user green power "direct connection" as a policy focus for 2026, targeting applications in data centers, semiconductor manufacturing, aluminum industry, and zero-carbon industrial parks [5] - This initiative enhances the traceability of green power, supporting exporters' Scope 2 emissions disclosures and potentially alleviating pressures from carbon border adjustment mechanisms (CBAM) [5] - From a system perspective, "direct connection" and microgrid architecture can help alleviate local grid congestion by shifting some incremental load growth behind the meter, complementing rather than replacing broader grid investments [5]