Sieyuan Electric (.SZ)_ Raise TP on higher data center demand and circuit breaker opportunity; maintain Buy

Summary of Sieyuan Electric Research Call Company Overview - Company: Sieyuan Electric (002028.SZ) - Market Cap: Rmb172.2 billion / $25.0 billion - Enterprise Value: Rmb167.1 billion / $24.3 billion - Current Price: Rmb219.4 - Target Price: Rmb223.9 (previously Rmb195.6) [12][14] Key Industry Insights - Power Demand: The US power demand CAGR has been revised from 2.6% to 3.2% through 2030, reflecting higher demand driven by cloud and AI services [2][8] - Data Center Demand: Increased constraints on grid power and a bottom-up analysis of incremental Behind-the-Meter (BTM) capacity are expected to meet the majority of the increase in data center power demand [2][8] Financial Projections - Earnings Revision: EPS for 2026-2030 has been revised up by 2-5% due to higher global power demand and Sieyuan's ample capacity to take on more orders [12][15] - Revenue Growth: Expected export revenue growth at a CAGR of 43% from 2025 to 2030, driven by global grid upgrades and market share gains in switchgear and power transformers [15] Product Opportunities - Circuit Breakers: Sieyuan is positioned to gain more orders for tank-type circuit breakers due to severe shortages in North America. The company can leverage its GIS-grade interrupter technology to reduce costs by approximately 30% per unit [10][15] - Transformer Capacity: Sieyuan's Phase II transformer capacity can produce 400 units of power transformers, operational since November 2025, with existing capacity to deliver additional orders within a year [11][15] Investment Thesis - Market Position: Sieyuan ranks among the top 1-3 in various product categories with the State Grid, with a strong commitment to quality and operational excellence [15] - US Revenue Contribution: Anticipated that US revenue will account for 26%-30% of overseas revenue from 2026 to 2028, contributing positively to overall margins [15] Risks - Execution Risks: Potential risks include overseas execution challenges, margin pressures, and a slowdown in data center construction pace [16] Conclusion - Recommendation: Maintain a Buy rating on Sieyuan Electric, with a target price of Rmb223.9, reflecting strong growth prospects and strategic positioning in the power equipment market [12][15]