Summary of NARI Technology (600406.SS) 2Q25 Conference Call Company Overview - **Company**: NARI Technology (600406.SS) - **Industry**: Power Equipment and Grid Automation Key Financial Results - **2Q25 Revenue**: Rmb 15,348 million, +24% YoY - **Gross Profit**: Rmb 4,260 million, +8% YoY - **EBIT**: Rmb 2,636 million, +12% YoY - **Net Profit**: Rmb 3,137 million, +7% YoY - **Gross Margin (GPM)**: 28%, down 4 percentage points (pp) YoY - **Operating Margin (OPM)**: 17%, down 2 pp YoY - **Net Margin (NPM)**: 15%, down 2 pp YoY - **1H25 Revenue**: Rmb 28,243 million, +24% YoY - **1H25 GPM**: 28%, down 2.6 pp YoY Segment Performance - **Grid Automation Segment**: - Revenue: Rmb 12,225 million, +28% YoY in 1H25 - GPM: 30.3%, down 3 pp YoY - **Grid Digitalization Segment**: - Revenue: Rmb 3,900 million, +4% YoY in 1H25 - GPM: 23.4%, down 3 pp YoY - **Power Generation Segment**: - Revenue: Rmb 6,541 million, +30% YoY in 1H25 - GPM: 21.6%, down 2 pp YoY - **Industrial Internet Segment**: - Revenue: Rmb 1,245 million, +3% YoY in 1H25 - GPM: 20.0%, down 3 pp YoY - **Overseas Business**: - Revenue: Rmb 1,987 million, +139% YoY in 1H25 - Newly signed overseas contracts grew 200% YoY Expense Management - **SG&A Expense**: 13% of total revenue in 1H25, down from 14.9% in 1H24 - **Cash Flow from Operations**: Rmb 2,809 million in 1H25, representing 95% of net profit Investment Thesis - NARI Technology is positioned as a leading player in the power equipment sector in China, with significant market shares in various segments (34%-70%). - Expected to benefit from China's power grid modernization, with projected revenue and net profit CAGR of 10% and 12% respectively from 2025 to 2030. - Anticipated catalysts include State Grid's work plans and the upcoming 15th Five-Year Energy/Grid Plan in 2026. Valuation and Risks - **12-Month Target Price**: Rmb 30.2, based on a P/E ratio of 25X for 2026E - **Key Risks**: - Lower-than-expected fiscal support from the State Grid - Delays in UHV project approvals Conclusion - Despite pressure on GPM, NARI Technology shows strong revenue growth and effective expense management, maintaining a positive outlook for future performance and investment potential. The company is rated as a "Buy" with significant upside potential.

Group 1 - The core viewpoint highlights the dual driving forces of "domestic chips + liquid cooling technology" in restructuring computing infrastructure, with Huawei's Ascend 910C achieving large-scale deployment and breaking overseas monopolies [1][2] - The Deepseek-V3.1 model is adapted to the new generation of domestic chips, accelerating the "chip-model" ecological closed loop [2] - The AIDC cabinet power ranges from 20-100kW, with liquid cooling becoming a rigid demand due to its high efficiency and low consumption, leading to an accelerated penetration rate [2] Group 2 - Multiple factors are catalyzing an explosive opportunity in the IDC and computing leasing sectors, with domestic computing gaining multiple benefits and investment value becoming prominent [2] - Policy-driven requirements for state-owned data centers mandate over 50% procurement of domestic chips, alongside the release of industrial chain demand from the 6 billion yuan Inner Mongolia project by Volcano Engine [2] - The halt of H20 production by Nvidia stimulates domestic alternatives, and the upcoming China Computing Conference on August 22 may further clarify policy support, promoting the domestic transformation of the sector [2] Group 3 - The power generation sector is expected to see simultaneous growth in volume and profit, with overseas expansion opening additional growth opportunities [3] - Recommended companies include Keta Power and Weichai Heavy Machinery, with a focus on the gradually increasing penetration of the HVDC segment, recommending Keda Data, Hewei Electric, and Tonghe Technology [3] - The report maintains a "recommended" rating for the power equipment sector, highlighting the benefits from power increases and liquid cooling segments, with recommendations for Invek, Shenling Environment, and Oulu Tong [3]

Group 1 - On August 25, 28 out of 31 primary industries in the Shenwan index received net financing inflows, with the electronics industry leading at a net inflow of 11.329 billion [1] - Other industries with significant net financing inflows included telecommunications, non-ferrous metals, power equipment, computers, non-bank financials, automobiles, and machinery, each exceeding 1 billion in net inflows [1] Group 2 - A total of 2,147 individual stocks received net financing inflows on August 25, with 86 stocks having inflows exceeding 100 million [1] - Among these, 16 stocks had net inflows over 300 million, with Shenghong Technology leading at 1.578 billion [1] - Other notable stocks with significant net inflows included Northern Rare Earth, Sungrow Power Supply, Industrial Fulian, New Yisheng, Haiguang Information, Dongfang Wealth, and Cambricon, each exceeding 600 million in net inflows [1]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **High Voltage Direct Current (HVDC)** technology, which is critical for the energy transition and efficient power transmission over long distances [2][6][9] - The global demand for HVDC systems is surging due to rising renewable energy deployment and the need for cross-border electricity interconnections [2][9] Core Insights - **Rising Transmission Capex**: Global transmission capital expenditure (capex) is expected to grow at a **CAGR of ~15%+ from FY23-30**, driven by increasing power demand and renewable energy projects [6][9] - **Price Increases**: Prices for transformers and switchgears in the US have increased by **70% and 60% respectively since 2021**, with lead times for HV transformers extending from **~1 year in 2021 to over 3 years now** [6][9] - **Market Dynamics**: The Western HVDC market is dominated by three major players: **Hitachi, GE Vernova, and Siemens Energy**, which control **90% of the European market share** [6][9] - **Supply Constraints**: There is a significant supply constraint for HVDC equipment, with lead times for key components like converter valves reaching **~10 years** [6][9] Growth Opportunities - **Asian Players**: Companies in Asia, such as **LS Electric, Hyosung Heavy, Nari Tech, and Xuji**, are well-positioned to capture market share due to their capacity expansion and local technology development [2][9] - **European Market Growth**: The European HVDC market is projected to grow at a **CAGR of over 40%**, increasing from **47GW in 2024 to 116GW in 2030** [6][9] - **Offshore Wind Projects**: European offshore wind projects are expected to be a significant growth driver for HVDC technology, with **~82% of offshore wind capacity in Germany** anticipated to be connected via HVDC systems [41][43] Competitive Landscape - **Oligopoly in Europe**: The HVDC market in Europe is characterized by high barriers to entry, with established players dominating the landscape [53] - **Chinese Market**: In China, state-owned enterprises like **Nari, Xuji, and XD** lead the market, with Nari holding a **~50% market share** in converter valves [56] - **Korean Developments**: Korean companies are increasingly engaging in the HVDC market, with LS Electric and Hyosung Heavy making significant advancements in localizing HVDC technology [61] Additional Insights - **Technological Advancements**: HVDC technology is becoming more favorable due to its cost-effectiveness over long distances and its ability to enhance grid stability [34][41] - **Investment in Infrastructure**: The construction of HVDC facilities is essential for managing grid congestion and integrating renewable energy sources into the power system [38][41] Conclusion - The HVDC technology sector presents significant investment opportunities, particularly for Asian companies looking to expand their market presence amid rising global demand and supply constraints in the Western market [2][9][41]

Group 1 - The core viewpoint of the article highlights the rapid growth and international expansion of Tian Sheng Electric Co., Ltd., a high-tech enterprise established in 2011, which has successfully penetrated markets in 90 countries and regions, including Singapore, the UK, Africa, and Southeast Asia [3][5] - The company has achieved a significant transformation towards intelligent and green manufacturing, focusing on products such as smart switch cabinets, new energy charging piles, and power IoT systems, which are widely used in major power grid projects [5][7] - The financial support from Zhongyuan Bank's Pingdingshan branch has been crucial in facilitating Tian Sheng Electric's growth, providing comprehensive credit support of 25 million yuan and enhancing business cooperation [5][7] Group 2 - Zhongyuan Bank's Pingdingshan branch has actively engaged in supporting local innovative enterprises, aligning with the regional development strategy and focusing on key industries such as nylon new materials and high-end equipment manufacturing [7] - In 2023, the bank has issued over 800 million yuan in loans to private enterprises in key industries, including 190 million yuan in credit support for over 120 innovative private enterprises and 70 technology-based small and micro enterprises [7] - As of the second quarter of 2025, the technology loan balance of Zhongyuan Bank's Pingdingshan branch reached 5.21 billion yuan, an increase of 1.11 billion yuan since the beginning of the year, indicating a strong commitment to integrating finance with technology [7]

Group 1 - On August 11, among the 31 first-level industries, 24 industries received net financing inflows, with the electronics industry leading at a net inflow of 1.724 billion [1] - Other industries with significant net financing inflows included non-ferrous metals (1.598 billion), electric equipment (1.597 billion), machinery (1.526 billion), defense and military (1.336 billion), banking (1.238 billion), and chemicals (0.827 billion) [1] Group 2 - A total of 2,088 individual stocks received net financing inflows on August 11, with 208 stocks having inflows exceeding 30 million [1] - Among these, 39 stocks had net inflows exceeding 100 million, with Zhongji Xuchuang leading at 471 million [1] - Other notable stocks with high net inflows included Dazhu Laser (447 million), Ningde Times (409 million), Shenghong Technology (350 million), Xinyisheng (325 million), Salt Lake Co. (308 million), China Shipbuilding (253 million), Shenghe Resources (214 million), and Northern Rare Earth (212 million) [1]

Core Viewpoint - Powell Industries, Inc. (POWL) is positioned as a key player in the nuclear build-out and power capacity expansion driven by AI data centers, despite a recent revenue miss impacting short-term sentiment [1][5][6]. Group 1: Company Performance - Powell Industries reported strong earnings per share (EPS) but missed revenue expectations, leading to a sell-off in the stock [5][6]. - The recent performance of nuclear-adjacent companies like OKLO, Inc. and Centrus Energy Corp. highlights the ongoing investor interest in the energy sector [2]. Group 2: Market Sentiment and Strategy - The near-term sentiment has shifted negatively due to the revenue miss, causing a compression of multiples and a reaction from fast money investors [6][7]. - The company plans to leverage the post-earnings drop to establish a bullish options position, taking advantage of elevated put pricing while maintaining upside potential [9]. Group 3: Structural Drivers - The fundamental drivers for Powell Industries remain intact, including the increasing power needs of data centers, grid modernization, and the momentum in nuclear energy [8]. - Powell's role in supplying essential equipment for power distribution continues to be critical, unaffected by the fluctuations of a single quarter [8]. Group 4: Macro Context - The investment aligns with broader themes of Reindustrialization, Embodied AI, and Energy, emphasizing the need for robust power supply for factories, robots, and AI data centers [10].

Summary of Key Points from the Expert Call on High Voltage Power Equipment Industry Overview - **Industry**: High Voltage Power Equipment - **Key Drivers**: Demand driven by renewable energy installations, data centers, and potential growth in transmission capital expenditures (capex) Core Insights 1. **Price Increases**: - Price hikes for high voltage power equipment have accelerated, with certain types experiencing over 10% year-over-year increases since June 2025, attributed to tariffs and rising demand from renewables [2][4][5] - General price increases were noted at 3-5% in the first half of 2025, with transformers seeing the largest hikes [4][5] 2. **Strong Demand**: - Demand for high voltage power equipment remains robust year-to-date (YTD), primarily driven by new connections for renewable energy projects, accounting for over 70% of total demand [2][5] - The expert anticipates continued strong demand through 2026/27 due to the push for renewable energy and data center installations [2][5] 3. **Future Demand Dynamics**: - While demand from renewables may plateau, it is expected that new connections for gas-fired and nuclear power plants, along with data centers, will fill the gap [5][6] - The replacement cycle for existing equipment is expected to gain momentum in the coming years, although currently, replacement demand is less than 30% [2][5] 4. **Transmission Capex Growth**: - A forecasted 10% growth in transmission capex for 2025, with potential for stronger growth in subsequent years, contingent on resolving permitting issues [6] - The expert highlighted that regulatory hurdles remain a significant barrier to long-distance transmission network growth [6] 5. **Trade Tariff Impact**: - The impact of trade tariffs on pricing is seen as limited, with operators willing to pay higher prices to secure essential equipment for grid connections [6] - Equipment manufacturers are adjusting prices or negotiating with customers to pass on increased costs due to tariffs [6] 6. **Supply Constraints**: - There has been no noticeable increase in supply for high voltage power equipment YTD, particularly for transformers, primarily due to a lack of skilled labor [6] - Local manufacturers face challenges in ramping up capacity, and there is reluctance among regulated utilities to procure from Chinese manufacturers due to national security concerns [6] Additional Insights - **Market Sentiment**: The expert's views align with a bullish outlook on the demand/supply imbalance for high voltage power equipment in the US, supporting the positive ratings on companies like Hyundai Electric, Hyosung Heavy, and Sieyuan Electric [2][4] - **Long-term Trends**: The expert noted that lead times for high voltage equipment remain extended, indicating ongoing supply chain challenges [5] Conclusion - The high voltage power equipment industry is poised for growth driven by renewable energy and data center demands, despite challenges in supply and regulatory hurdles. The pricing environment is influenced by tariffs, but demand remains strong, suggesting a favorable outlook for key players in the market.

Company Overview - Briggs & Stratton is the world's largest producer of engines for lawn and garden, and a leading designer, manufacturer, and marketer of turf care and job site power equipment, lithium-ion batteries, standby generators, and energy storage systems [1][4] - The company operates in over 100 countries across six continents, providing innovative products and diverse power solutions [4] Leadership Appointment - Adam Aringer has been appointed as the senior vice president and chief financial officer, effective August 4, 2025 [1] - Aringer will oversee global finance operations, including financial planning and analysis, reporting and controls, and regulatory compliance [2] - He has over a decade of financial leadership experience, previously serving as vice president of financial planning and analysis at Johnson Controls, a $23 billion global manufacturer [3] Strategic Vision - CEO Kristina Cerniglia expressed enthusiasm for Aringer's appointment, highlighting his financial expertise, strategic vision, and commitment to operational discipline as critical for the company's long-term growth strategy [3] - Aringer's leadership is expected to drive sustained success for Briggs & Stratton [3]

Core Viewpoint - The Industrial and Commercial Bank of China (ICBC) Hebei Branch is actively promoting green development through green finance, aiming to support the economic and social development of Hebei Province and contribute to the construction of a beautiful Hebei [1][7]. Group 1: Green Loan Initiatives - As of June 30, 2025, the green loan balance of ICBC Hebei Branch reached 174 billion yuan, an increase of 30.3 billion yuan from the beginning of the year, with a growth rate 12 percentage points higher than the overall loan growth [1]. - In Xiong'an, the green loan balance reached 33.3 billion yuan, leading the industry and demonstrating the branch's commitment to green finance [2][3]. Group 2: Innovative Financial Products - The branch has introduced various innovative financial products, including the "Xiong'an Development Loan" and "Meteorological Assistance Loan," to support green projects and enhance agricultural resilience against natural disasters [4][3]. - ICBC Hebei Branch has provided a total of 16.9 billion yuan in loans for green building projects, including zero-carbon buildings and ecological restoration projects [3][4]. Group 3: Support for Renewable Energy Projects - The branch has established a "Carbon Peak and Carbon Neutrality" special loan and low-carbon transition fund, financing 16.3 billion yuan for 32 environmentally friendly enterprises [4]. - As a joint lead underwriter for green bonds, the branch successfully completed the issuance of 450 million yuan in green perpetual bonds, with all funds allocated to clean energy projects [4]. Group 4: Commitment to Sustainable Practices - ICBC Hebei Branch is implementing ten special actions to reduce its operational carbon footprint, including energy efficiency improvements and promoting green office practices [6]. - The establishment of the first green low-carbon bank outlet in Xiong'an reflects the branch's commitment to sustainable banking practices and community engagement [6].