Core Viewpoint - The National Grid's "14th Five-Year Plan" investment is set to reach 4 trillion yuan, marking a 40% increase from the previous plan, focusing on green transformation and new power system construction [2][3]. Group 1: Investment and Development Plans - The National Grid aims to enhance its investment efforts to support domestic demand and stabilize growth, with a focus on aligning with national strategies and promoting social investment [3]. - By 2030, the "West-to-East Power Transmission" capacity is expected to exceed 420 million kilowatts, with an additional inter-provincial power exchange capacity of around 40 million kilowatts, supporting a 30% share of renewable energy generation [3]. Group 2: Power Supply Expectations - During the "14th Five-Year Plan," the clean energy installed capacity, represented by wind and solar power, is expected to continue growing, transitioning the power supply structure from fossil fuels to reliable renewable energy support [4]. - The power system is evolving from the traditional "source-grid-load" model to a "source-grid-load-storage" model, incorporating various new technologies [4]. Group 3: AI and Power Supply - The power supply is critical for AI development, with the U.S. facing a power shortage due to AI data centers, while China is projected to have three times the power generation capacity of the U.S. by 2026, supporting high-energy AI data centers [4]. - The increase in power supply is seen as a challenge that is often underestimated [4]. Group 4: Investment Opportunities - Analysts suggest focusing on the transformer sector, particularly in the context of technological innovation and demand growth, with specific recommendations for companies like Siyi Electric and Huaming Equipment [5]. - Solid-state transformers (SST) are on the verge of commercial explosion, with prototype validation expected in 2026 and commercial rollout anticipated in 2027, involving companies such as Sifang Co. and China XD Electric [5]. - The anticipated increase in investment during the "14th Five-Year Plan" presents opportunities in the ultra-high voltage sector and new standard electric meters, with companies like Pinggao Electric and XJ Electric highlighted for their potential [5].

Core Viewpoint - The report from Guojin Securities indicates that the domestic power grid equipment market is expected to exceed 2 trillion yuan by 2026, with a year-on-year growth of 15%, driven by significant changes in industry dynamics, particularly in domestic and international markets [1][2]. Market Size and Growth - The estimated total market size for domestic power grid equipment enterprises in 2026 is over 2 trillion yuan, with a year-on-year increase of 15% [2]. - Breakdown of market segments includes: - Domestic grid (approximately 823 billion yuan, yoy +9%) [2]. - External grid (approximately 580 billion yuan, yoy +19%) [2]. - International market (approximately 665 billion yuan, yoy +20%) [2]. Industry Dynamics - The industry is entering a new phase characterized by stable growth and structural differentiation, with a focus on international expansion and main grid development as key drivers [2]. - The report highlights ten segments to track and assess market conditions, indicating a global upcycle in power equipment [2]. Segment Analysis - Main grid (high growth maintained): In 2026, the bidding for transmission and transformation equipment is expected to reach 91.9 billion yuan, a year-on-year increase of 26% [3]. - Ultra-high voltage (bottoming out): Approval for new projects is expected to accelerate post-Q4 2025, with five new direct current lines anticipated in 2026 [3]. - Distribution network (upward turning point): Material bidding from January to November showed a year-on-year decrease of 4%, but prices for the second batch of regional joint procurement equipment have increased by 10% to 30% [3]. - Smart meters (downward trend slowing): Bidding for smart meters in 2025 is approximately 15 billion yuan, a year-on-year decrease of 40%, but new standards in 2026 are expected to lead to price increases [3]. - Digitalization of the grid (bottoming out): Bidding for digital equipment in 2025 is expected to reach 4.2 billion yuan, a year-on-year increase of 70% [3]. - Export opportunities for transformers and switchgear remain strong, with significant year-on-year growth in exports [3]. Investment Recommendations - Focus on the transformer segment, which is expected to benefit from technological innovation and increased demand [4]. - Solid-state transformers (SST) are highlighted as a disruptive technology with significant commercial potential, expected to see validation in 2026 and commercialization in 2027 [5]. - Attention is drawn to the anticipated recovery in domestic investments under the "14th Five-Year Plan," particularly in ultra-high voltage policies and new smart meter standards [5].

Investment Rating - The report indicates a positive investment outlook for the power equipment sector, highlighting a structural differentiation in the market with a focus on the main grid and overseas expansion [2][3]. Core Insights - The domestic market for power grid equipment is projected to exceed 2 trillion yuan in 2025, with a year-on-year growth of 15%. The market is segmented into three main areas: internal grid (approximately 823 billion yuan, +9% YoY), external grid (approximately 580 billion yuan, +19% YoY), and overseas markets (approximately 665 billion yuan, +20% YoY) [2][18]. - The report emphasizes the importance of transformers, particularly in the context of the North American market, where there is a significant supply-demand mismatch. The expected supply gap for power transformers in the U.S. by 2025 is projected to be 30% [3][25]. - Solid-state transformers (SST) are highlighted as a disruptive technology with a potential commercial breakthrough expected around 2027, driven by their efficiency and adaptability to high-density computing environments [4][12]. Summary by Sections Investment Framework - The power equipment sector is categorized into six main business types, including smart systems, high-voltage equipment, medium and low-voltage equipment, metering devices, materials, and low-voltage electrical appliances [13][14]. - The report outlines a structural differentiation in the market, with a focus on the main grid and overseas expansion as key growth areas [18][23]. Market Demand and Trends - The report forecasts that the internal market (State Grid and Southern Grid) will reach approximately 835 billion yuan in 2025, with a growth rate of 9% YoY. The demand for high-voltage transformers and related equipment is expected to remain strong due to ongoing infrastructure investments [22][25]. - The external market, particularly in renewable energy sectors, is anticipated to grow significantly, with wind power installations expected to increase by 51% YoY in 2025 [22][26]. Detailed Market Tracking - The report provides a detailed analysis of ten sub-markets, indicating that the main grid and overseas markets are expected to maintain high levels of activity. The State Grid's investment in transmission and transformation equipment is projected to grow by 26% YoY, with significant contributions from leading companies [24][25]. - The report also notes a recovery in the distribution network segment, with price adjustments expected to enhance profitability starting in 2026 [25][26].

Core Insights - The Central Economic Work Conference has introduced the "Energy Power Construction Planning Outline," marking a shift from a defensive energy security focus to a proactive energy power leadership strategy [2] - The conference emphasizes the acceleration of new energy systems, green electricity applications, and the importance of new production capacities while addressing issues of "involution" in industries such as wind, solar, and lithium batteries [2][3] Group 1: Energy Strategy and New Energy Focus - The conference's focus on "energy power" alongside manufacturing and technology indicates a significant upgrade in energy strategy [2] - Key areas of focus include fostering new growth drivers, deepening the integration of "AI+", and promoting a comprehensive green transition under the "dual carbon" policy [2] Group 2: Industry Impacts and Opportunities - The introduction of a national unified market construction regulation aims to address "involution" in industries, which has led to widespread losses in sectors like wind, solar, and lithium [3] - The wind power sector is expected to see an increase in new installations, with projections of 120 GW per year during the 14th Five-Year Plan, while solar power may experience a growth inflection point by 2026 [3] - Lithium battery production is anticipated to return to balance, with potential for volume and profit growth as demand increases [3] Group 3: AIDC and Infrastructure Development - The development of AI and the need for energy security are driving modernization in infrastructure, particularly in power supply and distribution systems [4] - The transition to high-voltage direct current (HVDC) systems is expected to accelerate, with significant growth in AI-related power equipment and storage solutions [4] Group 4: Innovation and Future Industries - The conference highlights the importance of innovation, particularly in areas such as embodied intelligence, hydrogen energy, and controllable nuclear fusion, as new economic growth points [5] - Embodied intelligence is projected to be a rapidly growing sector within the next five years, with significant market potential in humanoid robotics and smart driving [5] - The hydrogen energy sector is receiving strong policy support, with initiatives aimed at accelerating the commercialization of green hydrogen and related technologies [5]

Group 1 - The article emphasizes the importance of timely and professional information interpretation in investment decision-making [1] - It highlights the company's capability in providing thin film deposition technology support for new storage solutions, having secured significant orders from key clients in the advanced packaging sector [1] - The company is also noted for its advancements in solid-state transformers (SST) and energy storage, with high-end materials already supplied to SST clients, leading to small batch shipments in Europe [1]

Group 1 - The company has established three main business segments: "Smart Energy Use, Smart City, and Smart New Energy" [2] - Currently, the company has not developed transformer products and has no plans for solid-state transformer (SST) research and development [2] - The company will continue to focus on its core business and closely monitor market dynamics to seize development opportunities across the industry chain [2]

Summary of Conference Call Transcript Industry Overview - The report discusses the evolution of power supply architectures in data centers, focusing on High Voltage Direct Current (HVDC) systems and their adoption by major overseas companies such as Microsoft, Google, and Meta [1][10]. - The increasing demand for AI computing power is driving the need for more efficient power supply solutions in data centers, impacting both energy consumption and operational costs [1][10]. Key Points on Power Supply Architecture Evolution of Power Supply Systems 1. **First Generation**: Utilized Uninterruptible Power Supply (UPS) systems, converting AC from the grid to DC for server use, with a power capacity of 10-15 kW [2]. 2. **Second Generation**: Introduced an open pricing power supply model, integrating power sources directly into the system [2]. 3. **Third Generation**: Features a high-voltage direct current (HVDC) solution that separates power supply from IT cabinets, allowing for better scalability and efficiency [3][4]. Major Companies' Initiatives - **Microsoft**: Launched the Mount Diablo power architecture, separating power and server units, currently using a 50V DC supply [4]. - **Google**: Presented a two-phase power architecture at the OCP conference, with a transition plan to a direct DC supply of ±400V for data centers [5]. - **Meta**: Announced a three-step approach to high-power rack solutions, gradually moving towards HVDC systems [6][7]. - **NVIDIA**: Introduced an 800V power architecture capable of supporting over 600 kW, focusing on future-proofing against increasing power demands [9]. Domestic vs. Overseas Trends - Domestic HVDC systems in China are primarily at 240V, with a focus on compatibility with existing equipment, while overseas systems are moving towards 400V and 800V solutions [17][18]. - Chinese companies like Alibaba and Tencent are still utilizing 240V systems, with some planning for higher voltage systems in the future [19][20]. Supply Chain and Market Dynamics - The supply chain for 400V systems is mature, making it cost-effective, while 800V systems are newer and face higher costs and safety concerns [13][14]. - The transition to HVDC will be gradual, with existing systems needing to adapt to new power supply standards [10][22]. Investment Opportunities - Companies such as Zhongheng, Kehua, and others are positioned to benefit from the increasing penetration of HVDC systems in both domestic and international markets [22]. Additional Insights - The report highlights the importance of solid-state transformers (SST) in future power supply solutions, which can enhance efficiency and reduce size [15][16]. - The compatibility of existing servers with new power supply systems remains a critical factor in the transition to higher voltage solutions [22][23]. This summary encapsulates the key insights from the conference call, focusing on the evolution of power supply systems in data centers, the initiatives of major companies, and the implications for investment in the sector.

Investment Rating - The report maintains a "Positive" investment rating for the power supply industry [4]. Core Viewpoints - The rapid development of artificial intelligence (AI) is driving the demand for intelligent computing data centers (AIDC), which require enhanced power supply and distribution infrastructure [4][9]. - The performance of AI chips is significantly improving, leading to an expected increase in both volume and price for server power supplies [4]. - The power supply architecture is anticipated to evolve from UPS to HVDC systems, enhancing efficiency and reliability [4]. - Investment suggestions include focusing on companies involved in server power supply, HVDC technology, and backup power solutions [4]. Summary by Sections 1. AI Trends and Power Supply Demand - The construction of intelligent computing centers is expected to accelerate due to the AI wave, enhancing the efficiency of data centers [9]. - The power supply infrastructure is likely to undergo iterative upgrades to meet the growing demands of AI applications [19]. 2. AI Server Power Supply Upgrades - The global AI market reached approximately 1,187.9 billion yuan in 2023, with a projected compound annual growth rate (CAGR) of over 35% until 2030 [41]. - AI server power supply performance is expected to improve, leading to increased demand for high-power solutions [41][56]. - The transition from UPS to HVDC systems is anticipated to enhance efficiency and reliability in data centers [66][82]. 3. Investment Recommendations - Companies to watch include: 1. Server power supply manufacturers like Megmeet and Euron. 2. HVDC technology providers such as Zhongheng Electric and Hewei Electric. 3. Backup power solution providers like Yiwei Lithium Energy and Weilan Lithium Core [4].