CICC: Power equipment going overseas to continue high prosperity, US power grid facilities urgently need upgrading

Zhongjin released a research report stating that the total export value of major power equipment in January-February 2026 increased by 34% year-on-year, with year-on-year growth in all regions, and impressive growth rates in Asia, Africa, and Europe. Among them, the export amount of transformers is about 1.6 billion US dollars, a year-on-year increase of 39%, and the export of electric meters increased by 3% year-on-year. Continuous optimism about the global power investment cycle, with Chinese companies increasing their overseas presence, and profit elasticity expected to be released. Looking back at historical data on the operation of the US power grid, power outages caused by extreme weather in the US are not isolated incidents, and there is a trend towards winter power outages becoming normalized, which may push the US to accelerate investment in power grid infrastructure. The main viewpoints of Zhongjin are as follows: Investment in the two grids at the beginning of the year has accelerated, and the construction of ultra-high voltage has significantly increased its pace. 1) Ultra-high voltage: The current "Three Connections and One Straight" projects have entered the approval phase for construction and equipment tendering has not been carried out, and it is expected that a new round of tendering peaks for ultra-high voltage equipment will occur in the future, with core companies expected to benefit fully. Multiple projects are in the feasibility stage, and upcoming projects will support high prosperity levels during the "15th Five-Year Plan" period. 2) Main grid: The equipment tendering for national grid transmission and transformation equipment has been opened twice in 2026, with a significant year-on-year increase in the bidding volume for the second batch of main equipment, and it is expected that the demand for the main grid will continue to grow steadily this year. 3) Electric meters: The electric meter tendering has been opened twice in 2026, totaling nearly 49.2 million units, close to the level of the entire year in 2025, with special tendering unit prices being adjusted, and it is expected that this year's electric meter tendering will see a simultaneous increase in quantity and price. Continued prosperity in the overseas export of power equipment The total export value of major power equipment in January-February 2026 increased by 34% year-on-year, with year-on-year growth in all regions, and impressive growth rates in Asia, Africa, and Europe. Among them, the export amount of transformers is about 1.6 billion US dollars, a year-on-year increase of 39%, and the export of electric meters increased by 3% year-on-year. Continuous optimism about the global power investment cycle, with Chinese companies increasing their overseas presence, and profit elasticity expected to be released. Analysis and implications of large-scale power outages caused by winter storms in the US Looking back at the historical data of the operation of the US power grid, power outages caused by extreme weather in the US are not isolated incidents, and there is a trend towards winter power outages becoming normalized, which may push the US to accelerate investment in power grid infrastructure. Analyzing the performance of the US power grid during the "Von" storm period, examining the causes of accidents and the underlying long-term power supply-demand contradictions in the US, the related experiences may provide insights for China's "15th Five-Year Plan" for power planning and the construction of new power systems. Target recommendations Recommended: 1) Power equipment export: Sieyuan Electric (002028.SZ), Huaming Power Equipment (002270.SZ), Hainan Jinpan Smart Technology (688676.SH), Guangdong Mingyang Electric (301291.SZ), Ningbo Sanxing Medical Electric (601567.SH), WASION HOLDINGS (03393), etc.; 2) Ultra-high voltage and main grid: Beijing Sifang Automation (601126.SH), Henan Pinggao Electric (600312.SH), NARI Technology (600406.SH), Xj Electric Co., Ltd. (000400.SZ), China XD Electric (601179.SH); 3) Power market: Langxin Group (300682.SZ), State Power Rixin Technology (301162.SZ). Risk factors Unexpectedly low installation of new energy, lower than expected investment in the power grid, and the impact of macroeconomic policy environment.