Core Viewpoint - The launch of the Ningxia-Hunan ±800 kV UHVDC project marks a significant advancement in China's renewable energy transmission capabilities, with over 36 billion kWh of electricity expected to be delivered annually, meeting the needs of over 10 million households, and more than 50% of this power coming from renewable sources [1] Industry Overview - The UHV construction boom is driving high growth in the performance of related listed companies, with the industry entering a high prosperity cycle due to the increasing demand for renewable energy transmission [1][4] - China's UHV construction capabilities are globally leading, covering the entire spectrum from original technology to complete equipment, and from engineering design to operation and maintenance [1] Company Performance - Baoding Tianwei Baobian Electric Co., Ltd. reported a revenue of 2.995 billion yuan, a year-on-year increase of 60.89%, and a net profit of 75.37 million yuan, up 230.76% [2] - Henan Tongda Cable Co., Ltd. achieved a revenue of 3.618 billion yuan, a year-on-year increase of 37.28%, and a net profit of 61.87 million yuan, up 68.42%, with significant growth in new orders across various sectors [2] - Pinggao Group Co., Ltd. reported a revenue of 5.696 billion yuan, a year-on-year increase of 12.96%, and a net profit of 666 million yuan, up 24.59%, with a notable increase in market share [3] Future Outlook - The investment in the UHV sector is expected to continue increasing in the coming years, driving high prosperity in the high-end equipment, key materials, and construction segments of the industry [5]

Group 1 - The construction of the Yichang North Station in Hubei is progressing well, with the main structure completed and the project entering the final stages [1] - The Wuhan to Yichang section of the Yangtze River High-Speed Railway, spanning 313 kilometers, is the first project to commence in the entire Yangtze River High-Speed Railway network [1] - The completion of various high-speed rail projects will enhance connectivity between Wuhan, Xiangyang, and Yichang, achieving one-hour travel times among these cities [1] Group 2 - Major infrastructure projects, including the Yangtze River High-Speed Railway and the Yellow River Ancient Xian Water Conservancy Hub, are being actively developed to support national strategies [2][3] - The Hami-Chongqing ±800 kV UHVDC transmission project has been launched, facilitating the transfer of green electricity over 2,200 kilometers and creating significant investment and job opportunities [3] - The implementation of large-scale engineering projects is expected to stimulate economic growth, with infrastructure investment increasing by 4.6% year-on-year, outpacing overall investment growth [3] Group 3 - The domestic shield tunneling machines are gaining a significant market share, accounting for nearly 70% globally, showcasing advancements in construction technology [4] - The completion of major engineering projects under the 14th Five-Year Plan is anticipated by the end of the year, contributing to the modernization of China's infrastructure [5] - The successful operation of the Jinsha River Silver River Hydropower Station and other projects highlights the potential for new technologies and products in the engineering sector [5]

Investment Rating - The report maintains a "Buy" rating for the following companies: Guodian NARI (国电南瑞), Pinggao Electric (平高电气), China XD Electric (中国西电), and XJ Electric (许继电气) [8][9]. Core Insights - The approval of the Southeast Tibet to Guangdong-Hong Kong-Macao ultra-high voltage (UHV) transmission line marks an upward cycle for the UHV sector, with an expected investment of 53.168 billion yuan and a total transmission capacity of 10GW [1]. - The "Three North" photovoltaic desertification control plan aims to add 253GW of solar capacity by 2030, indicating sustained growth in renewable energy infrastructure [2]. - The acceleration of UHV project construction is evident, with multiple projects expected to be operational within the year, enhancing the overall market dynamics [3]. - The UHV market exhibits high barriers to entry and profitability, with significant value in components such as converters and transformers, indicating a concentrated competitive landscape [4]. Summary by Sections UHV Projects and Approvals - The National Development and Reform Commission approved the Southeast Tibet to Guangdong-Hong Kong-Macao UHV project, with a total length of 2681.3 kilometers and dynamic investment of 53.168 billion yuan [1]. - It is anticipated that 5-6 additional UHV direct current lines will be approved in 2025, with key equipment suppliers likely to benefit significantly from this trend [1]. Photovoltaic Development - The "Three North" photovoltaic desertification control plan has been approved, targeting the addition of 253GW of solar capacity by 2030 and the reclamation of 10.1 million acres of desertified land [2]. - The ongoing construction of large-scale wind and solar bases in desert areas is expected to drive long-term demand for UHV transmission [2]. Market Dynamics and Company Performance - The UHV market is characterized by high profit margins and a limited number of participants, with significant revenue potential for core equipment manufacturers [4]. - Guodian NARI is projected to generate net profits of 1.15-1.64 billion yuan from each UHV project, while Pinggao Electric and China XD Electric are also expected to see substantial profit increases due to the anticipated surge in UHV orders [5]. - The report highlights the strong growth potential for these companies, with expected net profit growth rates of 23.8% CAGR from 2025 to 2027 for XJ Electric [10].

Group 1 - The "Deep Sea No. 1" Phase II project has been fully put into operation, marking it as the largest offshore gas field in China, capable of supplying over 4.5 billion cubic meters of natural gas annually to the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan [1] - The "Deep Sea No. 1" gas field has a proven geological reserve of over 1500 billion cubic meters and operates at the deepest water depth and highest temperature and pressure conditions in China, with a maximum temperature of 138 degrees Celsius [1] - The Shaanbei to Anhui ±800 kV UHVDC transmission project has commenced the core equipment electrical installation phase, with a total length exceeding 1000 kilometers and expected to deliver over 36 billion kilowatt-hours of electricity annually to Anhui by mid-2026 [1] Group 2 - The construction of the Chongqing to Chengdu high-speed railway's main navigation hole bridge has entered the steel beam construction phase, with the bridge being a key node for the railway and expected to be fully operational by 2027 [2] - The Jin-Ha Highway expansion project in the Panjin section has achieved mainline connectivity, spanning 238 kilometers and set to become the first long-distance ten-lane highway in northern China upon completion [2] - The construction of the station building for the Xining to Chengdu railway in Sichuan has commenced, which is a significant part of China's "eight vertical and eight horizontal" high-speed rail network, aimed at promoting economic and social development along the route [2]

Core Viewpoint - The successful crossing of the Gansu to Zhejiang ±800 kV UHVDC project over the Ningxia to Hunan ±800 kV UHVDC project marks a significant progress in the "Long Electric into Zhejiang" project, laying a solid foundation for the rapid advancement of subsequent engineering works [1] Group 1 - The project is a key infrastructure initiative aimed at enhancing electricity transmission capabilities between regions [1] - The completion of this critical node indicates a major milestone in the construction of the UHVDC project [1] - The achievement is expected to facilitate the swift progression of future engineering tasks related to the project [1]

Investment Rating - The report maintains a positive outlook on the photovoltaic and energy storage sectors, highlighting favorable policy developments and production stability [2][6]. Core Insights - The report emphasizes the positive impact of Shandong Province's new market-oriented pricing mechanism for renewable energy, which is expected to stabilize demand expectations for the second half of the year [6]. - It notes the potential changes in the European inverter market and suggests monitoring companies that may benefit from these shifts [6]. - The report highlights the increasing activity in offshore wind projects in China and the UK, indicating a growing market for related companies [2][9]. - It discusses the robust performance of the electric vehicle sector, particularly focusing on the launch of new models and the anticipated demand growth [3][12]. Summary by Relevant Sections Photovoltaic & Energy Storage - Shandong Province has released a comprehensive market-oriented pricing scheme for renewable energy, which is expected to support demand recovery in the second half of the year [6]. - The report indicates that May's component production is expected to remain stable, which is better than anticipated, contributing to market demand recovery [2][6]. - The European inverter market may undergo changes, with potential beneficiaries identified among Chinese companies [6]. Wind Energy - The Zhejiang deep-sea wind turbine bidding process has commenced, with expectations for construction to start within the year, indicating a positive trend in domestic offshore wind energy [9]. - The UK government has initiated reforms to its offshore wind bidding process, which may accelerate project demand [9]. Electric Grid - The report highlights the commissioning of the ±800 kV ultra-high voltage direct current transmission project in Gansu to Shandong, which is expected to enhance the performance of related companies [8]. - The first batch of framework bids for distribution network equipment in Southern China is valued at 5.4 billion yuan, indicating sustained high investment levels [8]. New Energy Vehicles & Lithium Batteries - The report notes that CATL's Hong Kong IPO has passed the hearing, signaling an expansion of the new energy sector's capital market activities [3][15]. - The electric vehicle market is expected to maintain strong demand, supported by new vehicle launches and favorable policies [12][16]. Hydrogen and Fuel Cells - The report indicates a long-term decline in hydrogen prices, with cities that have low hydrogen costs likely to promote commercial vehicle adoption [10]. - China has surpassed Japan in hydrogen-related patents, establishing itself as a global leader in the hydrogen energy sector [10].