Investment Rating - The report maintains a "Positive" investment rating for the power equipment industry [4] Core Insights - The dual carbon strategy emphasizes the coexistence of highly clean power generation and highly electrified power consumption, with the grid serving as a crucial link between the two [4][7] - The development of ultra-high voltage (UHV) technology is essential for achieving carbon neutrality, but progress has been slower than expected [4][8] - The distribution network is critical for renewable energy consumption, yet investment during the 14th Five-Year Plan period has fallen short of expectations [4][39] Summary by Sections Ultra-High Voltage (UHV) - UHV is a key component of the dual carbon strategy, with a planned investment of 380 billion yuan for over 30,000 kilometers of lines and a capacity of 340 million kilovolt-amperes [8] - The actual progress of UHV projects has been below expectations, with only eight projects likely to be completed by 2025 [16][18] - The shift towards flexible direct current technology is noted, as it allows for higher proportions of renewable energy to be transmitted [22][24] Distribution Network - The distribution network's role has evolved significantly post-dual carbon strategy, requiring upgrades to accommodate distributed energy resources [39][40] - Despite a consensus on the need for increased investment in the distribution network, actual investment levels have been lower than anticipated during the 14th Five-Year Plan [47] - The rapid growth of distributed solar power has led to challenges in the capacity of the distribution network, necessitating further enhancements [50]

Core Viewpoint - The performance of Pinggao Electric (600312.SH), a leading company in the switch industry, has steadily improved against the backdrop of increased domestic power grid investment, with significant growth in revenue and net profit in 2024 and Q1 2025 [1][4][5]. Financial Performance - In 2024, Pinggao Electric achieved operating revenue of 12.402 billion yuan, a year-on-year increase of 11.96%, and a net profit of 1.023 billion yuan, up 25.43% [1][4]. - The net profit after deducting non-recurring gains and losses was 999 million yuan, reflecting a growth of 22.99% [1][4]. - In Q1 2025, the company reported operating revenue of 2.51 billion yuan, a year-on-year increase of 22.82%, with net profit and net profit after deductions reaching 358 million yuan and 356 million yuan, respectively, marking increases of 55.94% and 56.23% [1][5]. Shareholder Returns - Pinggao Electric has established a multi-dividend mechanism, planning to distribute a total of 392 million yuan in cash dividends in 2024, which accounts for 38.33% of the company's net profit for the year [6][7]. - Since its listing, the company has implemented cash dividends 21 times, totaling 3.442 billion yuan, with a dividend payout ratio of 45.54% [2][8]. Research and Development - In 2024, the total R&D investment of Pinggao Electric was 530 million yuan, accounting for 4.27% of operating revenue, an increase of 0.51 percentage points year-on-year [3][12]. - The company achieved breakthroughs in core technologies, with 16 achievements recognized, including 13 rated as internationally leading [12]. Business Segments - The main business of Pinggao Electric, covering the manufacturing of power distribution and control equipment, generated operating revenue of 12.308 billion yuan in 2024, a year-on-year increase of 12.27% [10]. - The high-voltage and distribution network segments achieved revenues of 7.698 billion yuan and 3.242 billion yuan, respectively, with growth rates of 25.06% and 11.43% [10]. - The production and sales rates for both segments exceeded 98% in 2024, indicating strong operational efficiency [10]. International Business - The international business segment faced challenges, with revenue dropping to 204 million yuan, a decrease of 71.79%, and a negative gross margin of -30.43% due to project delays and increased costs [11].