SIEYUAN(SZ:002028)2026-01-20 03:19Summary of Key Takeaways from Sieyuan and Huaming Conference Call Industry Overview - The conference focused on the AI Robotics and Power sector, specifically the companies Sieyuan and Huaming, highlighting their performance and outlook in the context of the domestic and overseas markets [1][2]. Core Insights 1. Domestic Revenue Resilience: - Sieyuan and Huaming expect stable domestic revenue growth driven by grid-led demand, with a projected 40% cumulative investment growth in the 15th Five-Year Plan compared to the 14th, translating to a 6% CAGR from 2025 to 2030 [1]. - Off-grid investment is anticipated to decline, particularly affecting Huaming, which expects a drop in off-grid revenue in 2026 [1][2]. 2. Overseas Market Dynamics: - Both companies benefit from better pricing structures in overseas markets due to higher entry barriers and tighter supply conditions, which support their product mix [1][5]. - Sieyuan's overseas strategy includes expanding into renewable energy sectors and enhancing market share among industrial customers [2]. 3. Margin Pressures: - Both companies face slight margin pressures due to rising raw material costs, particularly copper, which constitutes about 10% of tap changers' COGS and approximately 30% of transformer COGS [1][6]. - The impact of raw material price hikes is considered manageable through design optimization and material substitution rather than price increases [1][6]. 4. Capital Expenditure Plans: - Sieyuan has completed recent investments in new plants and production lines, focusing on ramping up production and improving yield and utilization [7]. - Future capital expenditures will primarily be for maintenance and efficiency upgrades, with potential capacity expansion in Saudi Arabia driven by local content requirements [7]. 5. Competitive Advantages: - Sieyuan maintains its competitive edge through early overseas expansion and cumulative execution capabilities, including local sales networks and service teams [8]. Additional Important Points 1. Pricing Stability: - Price increases are not expected in the domestic market due to competitive pressures, while overseas pricing remains higher due to supply constraints [3][5][13]. 2. Raw Material Management: - Huaming has secured a year’s supply of copper, mitigating short-term price fluctuations, and is exploring aluminum substitution for copper in transformers [14]. 3. Capacity Management: - Current growth can be achieved through incremental measures rather than new construction, with potential to increase capacity by 10-20% through extended working hours [15]. 4. Market Outlook: - The outlook for the 15th Five-Year Plan is slightly better than previous expectations, with grid investment seen as a key area for broader infrastructure and industrial investment [9][10]. 5. Geographic Diversification: - Huaming has expanded its reach to around 130 countries, with Europe being the largest market, driven by energy transition investments [11][12]. Risks and Methodology - Sieyuan's target price is based on a 2028E P/E of 25x, with risks including overseas execution challenges and potential margin declines [16]. - Huaming's target price is based on a 2028E P/E of 22x, with risks related to share gains and domestic revenue growth [17].