Huatai Securities: The performance of power grid equipment in the third quarter showed a clear differentiation, and the logic of going abroad remains strong.

Huatai Securities research report stated that in terms of revenue in the third quarter, the performance of the non-ultra high voltage main grid > ultra high voltage main grid > distribution > electricity meter. Looking at the growth rates of the net profit attributable to the parent company of the sectors as a whole in the third quarter, the non-ultra high voltage main grid, ultra high voltage main grid, distribution, and electricity meter were 38.2%, 5.2%, -23.6%, and -28.4% respectively, showing a significant difference. The performance of the non-ultra high voltage main grid sector is relatively good, mainly due to the high prosperity of the overseas track and the continuous strong demand for internal main grid construction. In terms of distribution, companies' overseas revenue and orders also maintained a high-speed growth, but domestic companies with a high proportion of domestic revenue are more affected by the internal grid procurement price cuts and the slowdown in the growth of external new energy and industrial demand. The revenue of the ultra high voltage sector is relatively stable year-on-year, mainly due to the slow delivery pace in the domestic market. The performance of electricity meter companies is poor, mainly due to the significant price decline in the previous period, gradual delivery of orders, and profit pressure on companies; meanwhile, competition in overseas markets intensifies. The logic of outbound first equipment represented by transformers remains strong, showing a high-speed growth trend in both the main grid and distribution network in terms of orders and revenue. Looking ahead, the shortage of high-voltage level grid equipment is more sustainable.