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].