Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's performance in the first half of 2025 met market expectations, with revenue of 11.33 billion and a year-on-year increase of 8.9%, while net profit attributable to shareholders reached 600 million, up 30.1% year-on-year [9] - The growth foundation is built on UHV (Ultra High Voltage) and power transmission and transformation, with transformer profitability continuously improving [9] - The company is actively expanding its overseas market, achieving a 64% year-on-year increase in overseas revenue to 2.171 billion [9] - High R&D investment is maintained, with inventory growth attributed to a backlog of finished products [9] Summary by Sections Financial Performance - Total revenue for 2023 is projected at 21.204 billion, with a year-on-year growth of 13.02% [1] - Net profit attributable to shareholders for 2023 is estimated at 897.17 million, reflecting a 44.92% increase year-on-year [1] - The latest diluted EPS for 2023 is expected to be 0.18 yuan per share [1] Revenue and Profit Forecast - Revenue is forecasted to grow to 24.476 billion in 2025, with a year-on-year increase of 9.85% [1] - Net profit attributable to shareholders is projected to reach 1.497 billion in 2025, representing a 42.04% increase year-on-year [1] - The P/E ratio for 2025 is estimated at 22.97 [1] Market Position and Growth Drivers - The company has a solid order backlog in the UHV sector, with multiple projects expected to start bidding in the second half of the year [9] - The company is also focusing on the distribution network and international expansion as key growth drivers [9] - The gross margin for the first half of 2025 was reported at 21.6%, an increase of 2.7 percentage points year-on-year [9]

Core Viewpoint - Jinpan Technology (688676.SH) is increasing its investment in research and development for new products and technologies related to data center power modules, focusing on advanced technology products such as solid-state transformers, JST high-voltage direct current systems, and supercapacitor cabinets [1] Group 1 - The company has a dedicated R&D team that is actively working on cutting-edge technology products [1] - Ongoing R&D efforts include ultra-high power uninterruptible power supplies (UPS) and high-voltage direct current modules (HVDC) [1] - The company will disclose progress in accordance with information disclosure rules and will provide updates through relevant announcements [1]

Summary of Conference Call Notes Industry Overview - The discussion primarily revolves around the **data center industry** and the evolution of power supply solutions, particularly focusing on **UPS (Uninterruptible Power Supply)** and **HVDC (High Voltage Direct Current)** systems. Key Points and Arguments Current Trends in Data Centers - Data centers are increasingly moving towards larger power capacities, transitioning from several megawatts to tens or even hundreds of megawatts, which necessitates improvements in efficiency and size of power supply equipment [2][3] - The current dominant solution remains UPS due to its reliability, despite the potential benefits of direct current systems [1] Efficiency Improvements - The introduction of **Silicon Carbide (SiC)** technology in UPS systems can enhance efficiency to **97.5%**, although inherent structural limitations exist that cap efficiency gains [1] - Transitioning to HVDC systems is expected to lower both **CAPEX (Capital Expenditure)** and **OPEX (Operational Expenditure)**, making it a viable alternative to UPS [3] Market Developments - Companies like **Alibaba**, **Tencent**, and **ByteDance** are beginning to adopt HVDC systems to improve energy efficiency in their data centers [4] - The technology behind HVDC is closely related to that of **DC charging stations**, indicating a shared foundation in electrical engineering [4] Cost Comparisons - A comparison of system construction costs shows a decreasing trend from **$3 million** for UPS to **$2 million** for HVDC, and further down to **$1.3 million** for Panama power solutions [6] Technical Challenges - The adoption of HVDC faces challenges such as the need for high voltage management experience and concerns regarding reliability due to its status as a newer technology [9] - The current voltage levels of HVDC systems are comparable to traditional AC systems, which limits power density improvements [5] Future Projections - The market for power supply solutions in data centers is projected to reach **$100 billion** by 2030, with HVDC systems expected to gain market share as their unit prices increase [19] - The demand for server power supplies is anticipated to grow, with projections estimating a market size of **$150 billion** by 2030 [27] Competitive Landscape - **Delta Electronics** is identified as a leading player in the server power supply market, with significant market share alongside competitors like **Lite-On** and **MeiG** [22] - Domestic companies such as **Mikrotron** and **Zhongheng** are positioned to benefit from the shift towards HVDC systems in China [39] Emerging Technologies - The introduction of **solid-state transformers (SST)** is highlighted as a potential future solution for data centers, offering advantages in efficiency and space utilization [14][17] - The integration of **supercapacitors** is expected to become standard in future data center designs, providing stability during power fluctuations [29] Recommendations - Companies to watch include **Liangxin**, **Jianghai**, and **Weilan Lixin**, which are positioned to benefit from the growth in HVDC and supercapacitor markets [44] Additional Important Content - The discussion emphasizes the importance of adapting to the evolving needs of data centers, particularly in terms of power supply efficiency and reliability [25] - The role of GPU advancements in driving changes in power supply architecture is noted, indicating a close relationship between hardware developments and power supply innovations [38]

Investment Rating - The investment rating for the AIDC power equipment and grid industry is "Outperform the Market" (maintained rating) [1] Core Viewpoints - The demand for AIDC power equipment is expected to grow significantly due to the increasing capital expenditure by major cloud service providers, with a projected annual growth rate of 20% from 2025 to 2030 [5][13] - The market space for various AIDC power equipment segments, including dry-type transformers, medium and low voltage switchgear, UPS, HVDC, and solid-state transformers, is estimated to reach significant values by 2030 [12][13] - The industry is witnessing a shift towards domestic companies gaining competitive advantages in the data center sector, with a potential overall value chain transfer to Chinese enterprises [5] AIDC Power Equipment Summary - Recent capital expenditures by North America's four major cloud service providers reached $95 billion in Q2, a year-on-year increase of 66% [5] - The projected global AI computing load from 2025 to 2030 is expected to be 9.7, 15.9, 20.2, 22.3, 23.4, and 24.6 GW respectively, with corresponding AIDC power equipment demand estimated at 29, 48, 60, 67, 70, and 74 GW [5][13] - The market space for dry-type transformers, medium and low voltage switchgear, UPS, HVDC, and solid-state transformers is expected to reach 85, 341, 41, 380, and 239 billion yuan respectively by 2030 [12][13] - Recent performance in the AIDC power equipment sector shows significant increases, with high-voltage direct current (HVDC) rising by 19.7%, server power supplies by 11.3%, and lead-acid batteries by 8.5% [5] - Key companies in the AIDC power equipment sector include Jinpan Technology, Mingyang Electric, Hezhong Electric, and others [5] Grid Industry Summary - In June 2025, the total investment in national power engineering reached 105.7 billion yuan, a year-on-year increase of 22.5% [31] - The total investment in national grid engineering for the first half of 2025 was 291.1 billion yuan, reflecting a year-on-year increase of 14.6% [32] - The recent bidding for the State Grid's fourth batch of substation equipment amounted to approximately 12.77 billion yuan, with a cumulative estimated bidding amount for the year reaching 66.84 billion yuan, a year-on-year increase of 20.5% [58] - The grid equipment sector has also seen significant stock performance, with cable components and other equipment rising by 6.8% recently [5] - Key focus areas for the grid industry include high-voltage orders, virtual power plants, and international expansion opportunities [5]

Group 1: Product Applications and Advantages - The company's Automatic Transfer Switch Equipment (ATSE) products are primarily used in high-safety and stability-demanding fields such as rail transit, data centers, hospitals, and venues [2] - Solid-state circuit breakers are widely applicable in DC distribution scenarios, including photovoltaic storage, data communication, power grids, and marine applications [2] - Solid-state circuit breakers can cut off fault currents in hundreds of microseconds without generating arcs, significantly reducing the risk of damage to power sources and loads, thus enhancing distribution safety and reliability [2] Group 2: Development and Market Strategy - The company's solid-state transformer is currently in the application scheme verification and market research phase, with the phase-shifting transformer in the prototype development stage [3] - Solid-state transformers offer efficient power conversion and control, with potential applications in renewable energy integration, grid disturbance response, data centers, electric vehicle charging, electrified shipping, and aerospace [3] - The company is actively seeking opportunities for external development, focusing on vertical expansion in related industries such as mechanical and electrical, industrial automation control, and power instruments [3] Group 3: International Expansion - The company is expanding its overseas business, particularly in Southeast Asia and Russia, focusing on smart distribution products, transformers, and charging stations [3] - A subsidiary has been established in Singapore, achieving a small number of overseas project implementations [3]

Group 1 - The company, New Special Electric (301120), is a domestic professional provider of variable frequency power supply system solutions [1] - The company has a long-term focus on technological research and product innovation in the field of power electronics [1] - The company is currently conducting technical research and development on solid-state transformers, which is in the R&D stage [1]

Investment Rating - The investment rating for the AIDC power equipment and grid industry is "Outperform the Market" (maintained) [1] Core Viewpoints - The global AI computing load is expected to grow significantly, with new AI computing loads projected at 9.7/15.9/20.2/22.3/23.4/24.6 GW from 2025 to 2030, leading to a corresponding increase in demand for AIDC power equipment [5][13] - The domestic data center industry is expected to see substantial capital expenditure growth, with major cloud providers anticipated to ramp up investments, particularly in AI infrastructure [18][24] - The industry is characterized by a long power transmission chain, with established global players like Eaton and Schneider Electric dominating, while domestic companies are gaining competitive advantages in various segments [5][13] AIDC Power Equipment Summary - The demand for AIDC power equipment is projected to reach 29/48/60/67/70/74 GW from 2025 to 2030, with an average annual growth rate of 20% [5][13] - The market space for dry-type transformers, medium and low voltage switchgear, UPS, HVDC, and solid-state transformers is expected to reach 85/341/41/380/239 billion yuan by 2030 [5][12] - Recent performance in the AIDC power equipment sector has shown significant gains, particularly in transformers and switchgear, with notable stock performances from companies like TBEA and XWDA [5][28] Grid Industry Summary - National power engineering investment reached 1,057 billion yuan in June 2025, a year-on-year increase of 22.5% [32] - The grid engineering investment for the same period was 871 billion yuan, reflecting a year-on-year growth of 4.1% [33] - The bidding results for the State Grid's transformer equipment showed a total bid amount of 211.89 billion yuan, a year-on-year increase of 38.1% [61] - The focus for the grid industry includes high voltage orders and the development of new business models such as virtual power plants and green electricity direct supply [5][55]

Investment Rating - The investment rating for the AIDC power equipment and grid industry is "Outperform the Market" (maintained) [1] Core Viewpoints - The global AI computing load is expected to grow significantly, with new AI computing loads projected at 9.7/15.9/20.2/22.3/23.4/24.6 GW from 2025 to 2030. This translates to a demand for AIDC power equipment of 29/48/60/67/70/74 GW, with an average annual growth rate of 20% [5][13] - The market potential for dry-type transformers, medium and low voltage switchgear, UPS, HVDC, and solid-state transformers is estimated to reach 85/341/41/380/239 billion yuan by 2030 [5][12] - The domestic data center industry is expected to see increased capital expenditure from major cloud providers, with 2025 anticipated to be a pivotal year for AIDC construction [5][18] Summary by Sections AIDC Power Equipment - The AIDC power equipment sector has shown a diverse range of products, with major global players like Vertiv, Eaton, and Schneider Electric having established strong product lines and solutions [5] - Domestic companies are gaining competitive advantages in various segments, with leading firms gradually building their solution-providing capabilities [5] - The recent performance of the AIDC power equipment sector has been mixed, with notable declines in backup diesel power sources and lead-acid batteries [5][24] Grid Industry - The grid sector has seen significant investment growth, with national grid engineering investment reaching 632 billion yuan in May 2025, a year-on-year increase of 33.3% [31][32] - The bidding results for high-voltage equipment have shown a strong performance, with a total bid amount of 211.89 billion yuan in July 2025, reflecting a year-on-year increase of 38.1% [64] - The grid industry is expected to benefit from the maturation of new business models such as electricity trading and virtual power plants, with a focus on high-voltage orders and deliveries in the second half of 2025 [5][58]

Summary of the Conference Call for New Special Electric Industry Overview - The global solid-state transformer (SST) market is currently valued at approximately 1.4 billion RMB, primarily applied in demonstration projects for DC distribution networks and microgrids. It is expected to reach nearly 24 billion RMB by 2030, with a compound annual growth rate (CAGR) exceeding 60% over the next six years, driven significantly by data center applications [2][6]. Company Insights - New Special Electric, established in 1985, holds a dominant position in the high-voltage variable frequency market with a market share exceeding 25%. The company is actively developing solid-state transformer products, with prototypes expected to be launched in the second half of this year [2][7][8]. - The company primarily manufactures transformers for medium to large industrial motor drives, serving industries such as metallurgy, power, and petrochemicals. It is also expanding into emerging applications like energy storage and sodium-ion batteries [2][9]. Financial Performance - Despite facing challenges such as rising raw material costs and increased industry competition, the company's product gross margin remains above the industry average, reflecting its technical strength and industry barriers [4][12]. - The company anticipates a decline in revenue for 2024, resulting in a projected loss of approximately 50 million RMB. However, net profits are expected to recover to 50 million RMB, 100 million RMB, and 180 million RMB from 2025 to 2027, not accounting for the potential growth from large-scale solid-state transformer deployment [4][16]. Technological Advantages - Solid-state transformers offer significant advantages over traditional technologies, including a 63% reduction in footprint and a 2-3% increase in power supply efficiency. They integrate multiple functions such as electrical isolation, voltage conversion, and harmonic suppression, making them suitable for renewable energy integration [5][18]. Market Development - The solid-state transformer market is projected to grow rapidly, with expectations of reaching 4.8 billion RMB by 2028 and nearly 24 billion RMB by 2030. This growth positions it as one of the fastest-growing sectors in the industry [6][18]. - Currently, the technology is in the prototype and testing phase, with no large-scale commercial applications yet. However, leading companies, particularly overseas, are actively exploring this field [3][18]. Corporate Governance - The company has a concentrated ownership structure, with the chairman and his wife holding a combined 56.75% of the shares. An employee stock ownership plan was launched in April 2025 to enhance team vitality and ensure long-term stable development [10][11]. Future Outlook - New Special Electric is focusing on solid-state transformers and traditional phase-shifting rectifiers, with ongoing efforts to expand its customer base and market presence. The company is optimistic about its future prospects in both HVDC and solid-state transformer markets [19].

Investment Rating - The report does not provide a specific investment rating for the company [5]. Core Insights - The company is a pioneer in the domestic production of variable frequency transformers and has a significant market share in high-voltage variable frequency transformers, with over 25% in 2020 [8][18]. - The demand for variable frequency transformers is expected to recover due to multiple factors, including equipment upgrades, energy substitution, and energy-saving initiatives [2][45]. - The company is focusing on high-voltage variable frequency transformers, which have higher technical barriers and stronger customization attributes compared to low-voltage variants [2][64]. - The company is actively expanding into the solid-state transformer market, which is anticipated to see large-scale applications post the 14th Five-Year Plan [2][44]. - The company has initiated an employee stock ownership plan to cover core members, aiming to enhance the alignment of interests between employees and shareholders [36][38]. Summary by Sections Company Overview - Established in 1985, the company has over 40 years of experience in transformer manufacturing and has successfully developed high-insulation-grade variable frequency transformers since 2004, breaking foreign monopolies [8][15]. - The company has a concentrated ownership structure, with the chairman and his spouse holding 56.75% of the shares [8][12]. Market Trends - The global data center IT load is expected to grow at a CAGR of 24% from 2023 to 2028, with AI loads increasing 20 times over five years [2]. - The company is well-positioned to benefit from the ongoing upgrades in power supply systems for data centers, particularly with the adoption of HVDC technology [2][45]. Financial Projections - The company is projected to achieve a net profit of 51 million yuan in 2025, with a year-on-year growth of 104.2% [3]. - Revenue is expected to recover significantly in 2025, following a challenging 2023-2024 period due to macroeconomic factors [2][4]. Product and Technology Development - The company maintains a high level of R&D investment, with R&D expenses consistently above 4% of revenue since 2019 [18]. - The company is expanding its product line to include high-efficiency oil-immersed transformers and solid-state transformers, targeting new markets such as renewable energy and data centers [44][45]. Competitive Landscape - The high-voltage variable frequency transformer market is characterized by high technical barriers and concentrated competition, with the company maintaining strong relationships with major clients like ABB and Siemens [18][58]. - The domestic market for variable frequency transformers still has significant room for growth, with a current domestic market penetration of only 26% for high-voltage variants [60].