【Trend Research Report】Domestic Transformers Receive Massive Overseas Orders Power Grid Equipment Industry Chain May Face Structural Revaluation

The three major A-shares indices all declined today, with the Shanghai Composite Index retreating below the 3,800-point mark. By the close, the Shanghai Index fell 3.63%, the Shenzhen Component Index dropped 3.76%, and the ChiNext Index declined 3.49%. The combined trading volume of the Shanghai, Shenzhen, and Beijing markets exceeded 2.4 trillion yuan, an increase of over 150 billion yuan compared to the previous trading day. Almost all industry sectors declined, with only the coal sector rising against the trend. Leading decliners included precious metals, hotels and catering, components, tourist attractions, optical electronics, medical beauty, home goods, and social services. On individual stocks, only about 300 stocks rose, with over 30 hitting the daily limit up, while more than 100 stocks hit the limit down.

According to CCTV Finance, recently, transformer manufacturers across many regions in China have been operating at full capacity, with overseas orders continuously filling up. Some companies have production schedules extending into 2027. Data shows that the power consumption load of a super-large AI data center has exceeded 1 gigawatt, equivalent to the peak summer electricity demand of a medium-sized city. Additionally, AI large models are accelerating from the “training” phase to the “inference” phase, meaning their electricity consumption is shifting from one-time investment to ongoing consumption. There are about 3,000 transformer companies in China. By 2025, the total export value of transformers is expected to reach 64.6 billion yuan, a nearly 36% increase from 2024. China has become the world’s largest transformer producer, with clear advantages in raw materials, costs, and production cycles.

Furthermore, in the first year of the 14th Five-Year Plan, State Grid and China Southern Power Grid took the lead in fixed asset investment, achieving high year-on-year growth in January and February 2026. According to official announcements from State Grid, in January and February this year, the company’s fixed asset investment totaled 75.7 billion yuan, an increase of 80.6% year-on-year. The infrastructure support and investment-driven effects are significant, setting a new high for the same period in history and demonstrating strong investment momentum and execution in the opening year of the 14th Five-Year Plan.

CITIC Construction Investment states that North America’s power grid faces issues such as long grid connection cycles, aging equipment decommissioning, and insufficient backup capacity. The explosive demand for AIDC (Advanced Infrastructure for Data Centers) will lead to a significant widening of the power gap in North American grids between 2026 and 2028. Chengtong Securities points out that global grid investments are continuing to grow to cope with the increasing share of wind and solar power, and it is expected that global grid investment will remain in a long-term boom.

CITIC Construction Investment: Chinese power grid equipment companies are expected to benefit fully from this round of U.S. grid capital expenditure cycle

North America’s power grid faces long connection cycles, aging equipment decommissioning, and insufficient backup capacity. The surge in AIDC demand will significantly expand the power gap in North American grids from 2026 to 2028. Power shortages and tight supply-demand will become the norm, with data centers being the core driver of load and electricity price increases. In this context, gas turbines, energy storage, and grid equipment are the main beneficiaries. Natural gas power generation, with its high reliability and quick deployment, is the preferred choice for self-built power sources; energy storage can meet the new grid connection regulations’ requirements for load-side response, making it a necessary component; U.S. grid companies are rapidly increasing capital expenditure, with a $75 billion ultra-high-voltage grid investment plan underway. Chinese power grid equipment companies are poised to benefit from this cycle of U.S. grid capital spending.

Chengtong Securities: Global grid investment is expected to maintain long-term prosperity

Global grid investments are continuing to grow to address the increasing share of wind and solar power, and are expected to remain in a long-term boom. On the generation side, benefiting from rapid growth in wind and photovoltaic industries, global power plant investments have significantly outpaced grid investments in recent years. This has increased demand for grid-connection step-up equipment and necessitated greater grid investment to handle the impact of higher wind and solar power shares. On the grid side, developed economies have aging infrastructure, with a high proportion of equipment over 20 years old, creating urgent replacement needs. Domestic grid equipment companies will benefit from the upward shift in the investment growth center, while overseas export businesses are also expected to grow steadily.

Guojin Securities: Solid-state transformers are expected to open up application scenarios gradually

Solid-state transformers can achieve isolation and voltage transformation under semiconductor switch control, with high-efficiency power conversion, bidirectional energy scheduling, and intelligent flexible regulation. They are key facilities connecting the grid, energy storage, and computing loads. However, current technological barriers include high-voltage, high-power SiC device integration, high-frequency magnetic materials, thermal management, and high-reliability control algorithms. Cost, standards, and regulations also pose challenges. With supportive policies, application scenarios for solid-state transformers are expected to gradually expand, and commercialization could accelerate further.

CICC: Favorable outlook for deepening power marketization and accelerated UHV construction

In terms of electrical equipment, State Grid’s fixed asset investment in the first two months increased by over 80%, with the “14th Five-Year Plan” maintaining high prosperity for UHV. The Dala-Tarbat-Mongolian West UHV AC project has been approved, aiming to start construction in April 2026; State Grid has launched the first phase of UHV pre-project services and equipment bidding for 2026. We are optimistic about the deepening of power marketization and the accelerated, upgraded development of UHV, which will continue to support the improvement and efficiency of the new power system. The State Council issued opinions on improving the national unified electricity market system, aiming for about 70% of electricity to be traded through marketization by 2030, with spot markets expected to be officially operational before 2027, promoting new market entities like “Shagehuang” and virtual power plants to participate equally.

Yingda Securities: Power grid investment will be driven by “UHV backbone network + smart distribution network”

The energy and power industry will bid farewell to extensive expansion and enter a new high-quality development cycle driven by technology, market, and system coordination. For industry chain participants, following the four main lines—smart grids, green power applications, new energy storage, and integrated computing—will be key to seizing the opportunities of the “14th Five-Year Plan.” Power grid investment will feature a dual-driven pattern of “UHV backbone network + smart distribution network,” with cumulative grid investment from January to December 2025 increasing by 5.11% year-on-year. Energy storage is transitioning from “co-construction” to a new stage of “market-based dispatch and capacity value realization.” By the end of December 2025, China’s new energy storage installed capacity had grown by 85% year-on-year.

Guoxin Securities: Demand for grid equipment is expected to further increase

The coordinated development of computing power and electricity has become a new highlight. The government work report explicitly mentions implementing new infrastructure projects like computing and electricity coordination, a first in the State Council’s report. By 2025, the National Energy Administration’s notice on supporting pilot projects for new power systems will list “computing load” alongside industry, commerce, and residents as a new type of dispatchable resource. The explosive growth of AI computing power presents new challenges for the grid. Data centers’ single cabinet power has increased from 6kW to 240kW, and ultra-large AI data centers can peak at hundreds of megawatts, comparable to the electricity load of a small to medium city. Data centers are shifting from being mere “power consumers” to “core regulation resources” in the power system, participating in peak shaving, frequency regulation, and backup services through virtual power plants, achieving a collaborative development model of “computing-driven electricity and electricity-optimized computing.” The demand for smart distribution equipment, energy storage systems, and energy management systems is expected to further grow.

(This article does not constitute any investment advice. Investors operate at their own risk. The market carries risks; invest cautiously.)

(Article source: Oriental Fortune Research Center)