Sieyuan Electric (002028.SZ) Conference Call Summary Company Overview - **Company**: Sieyuan Electric - **Stock Code**: 002028.SZ - **Market Cap**: Rmb159,176 million (US$22,841 million) [6][9] Key Industry Insights - **Transformer Exports**: China's transformer exports rose 36% year-on-year to US$64.6 billion in 2025, driven by strong global demand [2][11] - **US Supply Gap**: The US faces a supply gap of about 30% that may persist until 2030, presenting opportunities for Sieyuan [2][11] - **State Grid Capex**: The State Grid's capex is projected to reach Rmb4 trillion in the 15th Five-Year Plan (2026-2030), which is about 40% higher than the previous plan [14][19] Financial Performance - **2025 Results**: Sieyuan's net profit for 2025 is expected to increase by 54.4% year-on-year to Rmb3,163 million, exceeding consensus estimates by 8% [21][25] - **Revenue Growth**: Revenue is projected to grow by 37.2% year-on-year to Rmb21.2 billion in 2025 [21][24] - **Earnings Forecast**: Net profit forecasts for 2025-2027 have been raised by 8-26% due to higher revenues and margins [25][26] Product and Market Strategy - **Product Mix Upgrade**: Sieyuan has started production of 750kV GIS, winning orders for over 30 units in 2025, with an average selling price (ASP) of Rmb20 million [3][12] - **Export Growth**: Revenue from exports is expected to continue growing, with a 90% year-on-year increase to Rmb5.9 billion in 2025, accounting for 28% of total revenue [2][11] Management and Corporate Strategy - **Management Track Record**: Established in 1993, Sieyuan has a strong focus on power grid equipment and is expected to benefit from the State Grid's capex plans [4][11] - **H-Share Listing**: The forthcoming Hong Kong listing is anticipated to enhance Sieyuan's global market recognition and facilitate export business development [22][24] Competitive Positioning - **Peer Comparison**: Sieyuan's 2025E revenue is approximately 95% of HD Hyundai Electric's, but significantly lower than Hitachi and Siemens Energy [11][12] - **Margin Analysis**: Sieyuan's operating profit and net profit margins are expected to be lower than those of HD Hyundai Electric due to differences in ASP and market exposure [12][13] Financial Ratios and Projections - **Earnings Projections**: - 2025E Net Profit: Rmb3,163 million - 2026E Net Profit: Rmb4,560 million - 2027E Net Profit: Rmb6,056 million [5][24] - **Valuation Metrics**: - Target Price: Rmb260 per share, up 53% from previous estimates [6][25] - Expected Total Return: 27.5% [6] Conclusion - **Investment Recommendation**: The company is rated as a "Buy" with expectations of significant growth driven by strong demand, management effectiveness, and favorable market conditions [1][25]

Group 1: Market Overview - The market is struggling to find upward momentum, primarily due to a decline in the tech sector, which has been a key support for the market [2][3] - There is a shift in sentiment from cautiously bullish to slightly bearish, indicating a potential for a larger pullback [3] Group 2: Eaton Corporation - Eaton Corporation is highlighted as a "picks and shovels" trade, benefiting from the infrastructure needed for AI data centers [6][18] - The stock is currently trading down approximately 4.2%, with a notable support level around $312 and resistance at $350 [8][12] - A bullish trade is considered, but it is categorized as a "wait and see" due to the stock closing below the 200-day moving average [15][17] Group 3: Quanta Services - Quanta Services is also positioned as a "picks and shovels" play, focusing on building out power grids for renewable energy [18][28] - The stock is in a long-term uptrend but has recently pulled back below the 50-day moving average, prompting a cautious approach [19][21] - A potential trade is being considered with a strike price of $400 for a long-term option, emphasizing the necessity of infrastructure development [28][29] Group 4: Southern Copper - Southern Copper is noted for its critical role in supplying copper, essential for data centers and electric vehicles [31][32] - The stock is in a long-term uptrend, with a recent pullback to the 10-day moving average, indicating a favorable entry point [32][34] - A long-term trade is suggested with a strike price of $120, allowing for a significant time frame to capitalize on the infrastructure buildout [39][40]