According to the Zhitong Finance APP, Guojin Securities released a research report stating that in the first half of 2025, the power equipment industry will continue to maintain a prosperous trend with diversified emerging demand: global grid investment remains high, the emergence of data centers creates new industry demand, and the scale and price of ultra-high voltage and distribution power bidding are expected to recover; the demand from new energy outside the grid and industrial enterprises continues to expand. Recommended directions: ① AIDC, ② transformer exports, ③ backbone network construction, ④ ultra-high voltage.
<h2>Guojin Securities' main viewpoints are as follows:</h2>
Financial Analysis - Q2 sector revenue &amp; performance continue to grow steadily, profitability &amp; operational capability remain stable
Target classification: The firm classifies the grid sector according to downstream and product attributes, selecting a total of 42 key companies with representative characteristics for analysis, divided into 5 sub-segments: ① exports, ② main network equipment, ③ distribution equipment, ④ secondary equipment and intelligence, ⑤ general devices and materials.
Revenue &amp; performance continue to grow: Key targets in the sector achieved revenue of 170.1 billion yuan in 1H25, a year-on-year increase of 13%, with contributions from demand within the grid, overseas, and outside the grid; achieved a net profit attributable to the parent company of 14 billion yuan, a year-on-year increase of 14%, mainly due to the increased proportion of overseas business with high profitability from leading companies. On a quarterly basis, 2Q24 achieved revenue of 99.4 billion yuan, a year-on-year increase of 14%; achieved a net profit attributable to the parent company of 8.9 billion yuan, a year-on-year increase of 13%.
Profitability: In 1H25, the main network equipment, secondary equipment, and intelligence segments performed well, with net profits attributable to the parent company increasing by 17% and 16% respectively year-on-year. The overall gross profit margin and net profit margin of key targets in the sector increased to 21.2% and 8.6% respectively in 1H25, with gross profit margin/net profit margin in 2Q25 increasing to 22%/9% quarter-on-quarter.
Operational capability: In 1H25, accounts receivable for key targets in the sector increased by 9% year-on-year, and inventory increased by 18% year-on-year, with overall collection efficiency and inventory management remaining stable. In terms of sub-segments, accounts receivable and inventory in the export segment increased by 18% and 35% year-on-year respectively, with growth rates significantly higher than the overall sector, and turnover rates decreased, mainly due to the longer settlement cycle of overseas projects, while companies actively stocked up to meet overseas demand; operational capabilities in the secondary equipment and intelligence segment have been fully optimized.
Capital expenditure: In 1H25, capital expenditure and monetary funds for key targets in the sector remained flat year-on-year and increased by 6%, with capital expenditure in the export segment continuing to grow significantly, increasing by 21% year-on-year, mainly due to the layout of more overseas production capacity. In terms of monetary funds, the cash flow in the grid sector is abundant, and the financial safety cushion is solid.
Position Analysis - Institutional holdings have declined year-on-year, with a focus on exports, leading companies in sub-sectors, data centers, and other areas as key investment directions
(1) Industry side: The market value of the power equipment industry reached 1.2 trillion yuan in the second quarter of 2025, a year-on-year increase of 8% and a quarter-on-quarter increase of 1%; the market value of the power equipment industry accounted for 1.2% of the total A-share market value, a year-on-year decrease of 0.2 percentage points. By the end of the second quarter of 2025, the proportion of the power equipment industry in the total market value of publicly offered funds reached 0.6%, a year-on-year decrease of 0.8 percentage points.
(2) Company side: Dongfang Cable, Siyuan Electric, Hongfa, SANXING, TGOOD, and others are favored by institutions, involving exports, leading companies in sub-sectors, and other areas
Power Equipment Export Segment: Long-cycle prosperity, high growth in high-voltage equipment exports, and strong demand from North American data centers.
(1) Industry Side: International power equipment leaders (Hitachi, Siemens Energy, Eaton) have a positive outlook, with sufficient order reserves, indicating continued strong growth in grid business and upward profitability, all mentioning the high prosperity of North American data center business; domestic export amounts for transformers, isolating switches, etc. from January to July 2025 continued to grow rapidly, with growth rates of 37% and 30%, respectively. (2) Company Side: Long-term overseas layout continues to pay off, with Si Yuan Electric, Samsung Medical, and Huaming Equipment experiencing high growth in overseas business.
Domestic Main Network Distribution Segment: Rapid growth in main network bidding, focus on accelerating subsequent ultra-high voltage bidding
(1) Industry Side: From January to July 2025, the actual completion of investment in basic grid construction was 331.5 billion yuan, a year-on-year increase of 13%; the incremental contribution to State Grid main network investment mainly comes from the expansion of the sending end in the northwest region and the upgrading of receiving end power stations. The first three batches of bidding for transmission and transformation equipment in 2025 amounted to 54.1 billion yuan, a year-on-year increase of 25%; two direct current and one alternating current ultra-high voltage projects have been approved in 2025, with two alternating current lines under construction. The previously approved direct current projects are expected to start construction soon, with the annual bidding amount for ultra-high voltage equipment expected to exceed 50 billion yuan, and the fourth batch of equipment bidding is expected to be released quickly; this year, distribution networks will adopt a joint procurement model, and in the long term, leading companies can gain a larger share in centralized procurement based on their comprehensive strength to achieve &#34;volume compensating for price.&#34; (2) Company Side: Several leading companies have stable growth in internal network business, and their external and international layouts are gradually being realized.
Risk Warning
Grid investment may be less than expected; new energy installed capacity construction may be less than expected; the effects of power policies may be less than expected; downstream demand may be less than expected; raw material prices may rise

300001

600885

601567

002270

Guojin Securities released a research report indicating that the power equipment industry will continue to maintain stable operating performance in the first half of 2025, driven by global grid investment and emerging demand. It recommends focusing on AIDC, transformer exports, backbone network construction, and ultra-high voltage directions. In the first half of 2025, the power equipment sector is expected to achieve revenue of 170.1 billion yuan, a year-on-year increase of 13%, and a net profit attributable to the parent company of 14 billion yuan, a year-on-year increase of 14%. This is mainly attributed to the high profitability of leading companies' overseas businesses

Zhitong

TGOOD

Hongfa

SANXING

HUAMING

Guotai Junan Securities: The operating performance of the power equipment sector is stable, focusing on emerging downstream and overseas markets