Investment Rating - Industry Rating: Recommended [5] Core Insights - The report maintains a positive outlook on the North American electricity shortage industry chain, highlighting the sustained high demand for power equipment due to both domestic and international AIDC construction and increasing overseas grid construction needs [3][31]. - The report emphasizes the clear long-term growth logic for household and commercial energy storage in Europe, driven by rising electricity prices and government subsidies, with a projected 55.7% CAGR for new installations by 2029 [1][13]. - The report identifies key beneficiaries in the power equipment sector, particularly companies with strong channel resources and technological advantages, such as SiYuan Electric and HuaMing Equipment, which are expected to benefit from ongoing demand in the transformer and gas turbine supply chains [3][31]. Summary by Sections 1. New Energy - The report notes that the significant rise in Dutch TTF natural gas futures prices will directly impact European wholesale electricity prices, enhancing the economic viability of household and commercial energy storage [1][13]. - It predicts that distributed energy storage will play a crucial role in alleviating electricity shortages, supported by clear subsidy policies from multiple European countries [1][13]. 2. Power Equipment & AIDC - The report highlights the ongoing high demand for power equipment driven by AIDC construction and overseas grid expansion, with a focus on companies that have established overseas operations and high gross margins [3][31]. - It points out the strong fundamentals and order visibility in the transformer and gas turbine sectors, identifying key beneficiaries such as SiYuan Electric and Dongfang Electric [3][31]. 3. New Energy Vehicles - The report discusses BYD's launch of its second-generation blade battery, which significantly improves fast-charging capabilities, addressing a critical pain point in the electric vehicle market [4][39]. - It emphasizes the importance of advancements in battery materials and technologies to enhance fast-charging performance and overall consumer experience [39]. 4. Wind Power - The report indicates that domestic and overseas wind power projects are progressing, with a focus on the growth potential of offshore wind projects and the increasing demand for related equipment [26][30]. - It identifies key players in the wind power sector that are expected to benefit from the tightening supply of components and the growing international market [30]. 5. Energy Storage - The report highlights the increasing demand for large-scale energy storage solutions, particularly in the U.S. and Europe, driven by the need for grid stability and the integration of renewable energy sources [22][23]. - It notes that the global large-scale energy storage installation capacity is expected to exceed 400 GWh by 2026, with significant growth opportunities for leading energy storage integrators [23].

Core Viewpoint - China Galaxy Securities predicts that during the "14th Five-Year Plan" period, the investment scale in the power grid may reach around 1 trillion yuan annually, with significant growth expected in the investment from State Grid and Southern Grid in 2026 [1] Group 1: Investment Outlook - The total fixed asset investment by State Grid is expected to reach 4 trillion yuan during the "14th Five-Year Plan," a 40% increase compared to the previous plan, while Southern Grid's investment is projected to be around 1 trillion yuan [1] - The anticipated investment amounts for State Grid and Southern Grid in 2026 are 700 billion yuan and 189 billion yuan, respectively, representing year-on-year growth of 7.6% and 8.0% [1] Group 2: High Voltage and Main Network - By the end of 2025, State Grid plans to complete 42 high-voltage projects, with expectations for further approvals and construction of additional projects in 2026 [2] - The demand for core equipment in the power system is increasing, with a projected tender amount for State Grid's transmission and transformation equipment reaching 91.88 billion yuan in 2025, a year-on-year increase of 25.3% [2] Group 3: Distribution Network and Metering - The distribution network is expected to see significant growth, with a total tender amount of 124.57 billion yuan in 2025, driven by the demand for smart upgrades [3] - The new standards for metering equipment are expected to lead to a recovery in prices, with 2026 anticipated to be a year of simultaneous volume and price increases [3] Group 4: Global Trends and AI Demand - North America is facing a significant electricity shortfall, with AI data center (AIDC) demand projected to increase electricity consumption from 176 TWh in 2023 to between 325-580 TWh by 2028 [4] - Global electricity and grid investment is expected to reach new highs, with projections of $1.5 trillion in 2024 and over $3.3 trillion by 2035, reflecting a compound annual growth rate (CAGR) of 8% from 2025 to 2035 [4] Group 5: Export Opportunities - The overseas supply of power equipment is expected to face shortages, with delivery times for transformers and high-voltage cables in Europe and the U.S. nearly doubling [5] - In the first 11 months of 2025, exports of transformers, meters, and other electrical equipment showed significant growth, indicating a continued upward trend in 2026 [6]

Investment Rating - The report suggests a positive investment outlook for the power supply, liquid cooling, and supporting electrical equipment sectors within the data center industry [3]. Core Insights - The report highlights the increasing value and redundancy in power supply configurations for data centers, particularly with the rise of AI computing demands [3]. - It emphasizes the transition from traditional data centers to AI Data Centers (AIDC), which require higher power densities and specialized cooling solutions [8]. - The liquid cooling market is expected to grow significantly, with cold plate cooling becoming mainstream and immersion cooling waiting for further development [33]. Summary by Sections 1. Power Supply: Growth Direction from Inside to Outside the Cabinet - The report notes that the value of power supply systems is increasing due to the unique power consumption characteristics of data centers, with a projected market size of approximately 150 billion yuan for HVDC systems by 2027 [3]. - The average rack density for AI servers is expected to increase significantly, leading to higher demand for server power supplies, with a projected market size of 373 billion yuan by 2027 [3][31]. 2. Liquid Cooling: Gradual Adoption of Cold Plate and Immersion Cooling - Cold plate liquid cooling is projected to account for 40% of the market by 2027, with a market size of 221 billion yuan, while immersion cooling is expected to reach 89.8 billion yuan [45]. - The report discusses the advantages of cold plate cooling, including lower costs and better compatibility with existing systems, while immersion cooling faces challenges related to liquid properties and system compatibility [36][37]. 3. Supporting Electrical Equipment: Transformers, Busbars, and Power Quality Devices - The demand for busbars is expected to rise as they can support high current loads required by AI-powered cabinets, with significant growth potential in the market [3]. - The report highlights the increasing acceptance of SiC-based power quality products in the data center sector, indicating a shift towards more efficient and compact solutions [3]. 4. Market Forecasts - The report provides detailed forecasts for the growth of the data center market, including the number of standard racks and total power capacity, projecting a total power capacity of 68.7 GW by 2027 [31][45]. - It also outlines the expected market sizes for various power supply solutions, including UPS and HVDC systems, with significant growth anticipated in the coming years [31].