Core Insights - The report identifies AIDC (Artificial Intelligence Data Center) and power shortages as the main investment themes for 2026, with the power equipment sector significantly outperforming the market in 2025, rising by 33.6% compared to a 17.7% increase in the CSI 300 index [1][10]. - The demand for power in data centers is expected to surge, with projections indicating that by 2035, the electricity demand from U.S. data centers will increase from 200 TWh to 640 TWh, equivalent to Germany's total annual electricity consumption [2][49]. Group 1: AIDC and HVDC Opportunities - The UPS market is steadily growing, and the HVDC (High Voltage Direct Current) solutions are seen as a definitive industry trend, with SST (Solid State Transformer) compatible with 800V HVDC expected to accelerate implementation [1][20]. - BCG consulting forecasts that by 2028, the power demand for data centers will reach 81GW in the U.S. and 125GW globally, driven by the increasing AI computing needs [29][32]. Group 2: U.S. Power Shortages and Market Dynamics - The U.S. is facing a critical power shortage, with many transmission lines over 40 years old, necessitating urgent upgrades and renovations to the grid [2][48]. - The report highlights that the demand for gas turbines and transformers is expected to rise due to the urgent need for power infrastructure improvements in the U.S. [3][50]. Group 3: Investment Recommendations - The report recommends focusing on companies like Zhongheng Electric and Kehua Data in the HVDC space, as well as Jinpan Technology and Igor in the transformer sector, due to the anticipated growth in global power infrastructure [3][58]. - The gas turbine market is also highlighted, with major manufacturers' orders extending to 2028, indicating strong demand for components such as turbine blades and combustion chambers [3][52]. Group 4: Diesel Generator Market - The diesel generator market for data centers is transitioning to a seller's market, with domestic manufacturers poised to replace foreign brands due to supply constraints and increasing demand [56][57]. - The global market for data center diesel generators is projected to grow from $6 billion in 2023 to $12 billion by 2030, driven by the rapid expansion of data centers and AI infrastructure [56][57].

Investment Rating - The report maintains a strong buy rating for several key companies in the power equipment sector, including Guodian Nanrui, Siyuan Electric, and TBEA, while recommending an increase in holdings for others like Sifang Co. and China XD Electric [2][3]. Core Insights - The State Grid's planned investment of 4 trillion yuan during the 14th Five-Year Plan period represents a 40% increase compared to the previous plan, with an expected compound annual growth rate (CAGR) of 7% [1][9]. - The focus of this investment will be on green transformation, ultra-high voltage, distribution networks, energy storage, and digitalization, which is expected to significantly support the performance of related companies [1][9]. - The report highlights the increasing pressure on power consumption and the need for a new power system, emphasizing ultra-high voltage and energy storage as critical solutions to address this challenge [1][13][21]. Industry Overview - The total number of listed companies in the power equipment sector is 308, with a total market capitalization of 7,728.9 billion yuan [3]. - The absolute performance of the power equipment and new energy sector has shown significant growth, with a 63.1% increase over 12 months [5]. Key Company Analysis - Guodian Nanrui is recognized as a leader in secondary equipment with strong technology barriers and stable operations, expected to see significant growth in high-voltage and system stability businesses [26]. - Siyuan Electric has established a comprehensive product system and service network in overseas markets, with a notable increase in overseas revenue [26]. - China XD Electric benefits from increased capital expenditure in domestic main networks and ultra-high voltage projects, with a growing presence in international markets [27]. - TBEA is experiencing rapid growth in orders, particularly in the Middle East and Europe, and is expected to benefit from ongoing power construction projects [28]. - Other notable companies include XJ Electric, Pinggao Electric, and Igor, each with unique strengths and growth prospects in the evolving power equipment landscape [29][30][31].

Summary of Conference Call Notes Industry Overview - The focus is on the AI power sector, specifically the transformer and AI power supply segments, which are identified as the most certain growth areas for 2026 [1][2]. Key Points 1. **Order and Performance Catalysts**: After 25 years of strategic positioning, leading companies in the AIDC (Artificial Intelligence Data Center) sector are expected to see sustained order growth and performance improvements in 2026, particularly in transformers and AI power supplies [1]. 2. **Transformer Demand**: There is a clear trend of electricity shortages in North America, which is anticipated to worsen in 2026. Transformers are identified as a critical component in addressing this shortage, with Chinese companies expected to become key players in increasing overseas production capacity and accelerating exports [1][2]. 3. **AI Power Supply Developments**: The core focus for AI power supplies in 2026 is on achieving significant milestones, particularly in high-voltage direct current (HVDC) systems, which are expected to transition from concept to implementation. Additionally, ongoing testing and sample submissions for solid-state transformers (SST) are noted [1]. 4. **Company-Specific Updates**: - **Siyuan Electric**: Anticipates over $100 million in orders from the U.S. in 2025, with expectations for explosive growth in transformers and AIS (Air Insulated Switchgear) in 2026 [2]. - **Igor**: Reports a 100% increase in North American orders in 2025, with close collaboration with T [2]. - **Jinpan Technology**: Progressing with framework orders from major overseas CSP (Concentrated Solar Power) clients [2]. - **Sifang Co.**: SST and V are entering the final stages of integration [2]. - **Kostad**: Noted an increase in UPS (Uninterruptible Power Supply) demand in North America, with new HVDC products and SST technology being developed [2]. - **Magmi Tech**: Reports successful scaling of orders and smooth sample submissions for new products [2]. Additional Important Insights - The emphasis on the AI power sector reflects a broader trend towards integrating AI technologies in energy solutions, indicating potential long-term growth opportunities in this industry [1][2]. - The strategic positioning of Chinese companies in the global market for transformers and AI power supplies suggests a shift in manufacturing capabilities and export dynamics, which could impact competitive landscapes [1].

Summary of Conference Call Notes Industry Overview - The focus is on the AI power sector, specifically the transformer and AI power supply segments, which are identified as the most certain growth areas for 2026 [1][1]. Key Points 1. **Long-term Outlook for AIDC**: After 25 years of development, it is anticipated that leading AIDC companies will see sustained order growth and performance in 2026, particularly in transformers and AI power supplies [1][1]. 2. **Transformer Demand**: There is a clear trend of electricity shortages in North America, which is expected to worsen in 2026. As a critical link in overseas production capacity, Chinese companies are projected to be the main contributors to future capacity increases, with exports likely to accelerate [1][1]. 3. **AI Power Supply Development**: The core focus for 2026 is on the transition from "0 to 1" in high-voltage direct current (HVDC) systems, with expectations for significant advancements. Additionally, the SST (Solid State Transformer) is currently undergoing testing and sample delivery, while internal power supplies are expected to see a continuous flow of orders [1][1]. Company-Specific Insights 1. **Siyuan Electric**: Anticipates over $100 million in orders from the U.S. in 2025, with expectations for explosive growth in transformers and AIS (Air Insulated Switchgear) in 2026 [2]. 2. **Igor**: Reports a 100% increase in North American orders in 2025, closely collaborating with T [2]. 3. **Jinpan Technology**: Progressing with framework orders from major overseas CSP (Concentrated Solar Power) clients [2]. 4. **Sifang Co.**: SST is entering the final stages of collaboration with V [2]. 5. **Kostad**: Experiencing growth in North American UPS (Uninterruptible Power Supply) market, launching HVDC and advancing SST technology [2]. 6. **Magnum**: Securing large-scale orders and successfully delivering new product samples [2].

Market Overview - The average stock price in A-shares is 14.69 yuan, with 222 stocks priced over 100 yuan, an increase of 5 stocks from the previous trading day [1] - The Shanghai Composite Index closed at 4114.00 points, up 0.29%, while stocks priced over 100 yuan had an average decline of 0.08%, underperforming the index by 0.38 percentage points [1] - In the past month, stocks priced over 100 yuan have seen an average increase of 22.00%, compared to a 6.13% rise in the Shanghai Composite Index [1] High-Value Stocks - The highest closing price among stocks over 100 yuan is 1419.66 yuan for Cambrian, followed by Kweichow Moutai at 1376.00 yuan and Source Technology at 748.29 yuan [1] - Among the stocks that crossed the 100 yuan mark today, New Spring Co. closed at 103.71 yuan, up 3.95%, with a turnover rate of 6.00% and a net inflow of 2.11 billion yuan [2] - Other notable stocks include Aobi Zhongguang at 102.46 yuan, up 4.23%, and Jinpan Technology at 106.24 yuan, up 8.43% [2] Industry Distribution - The electronic industry has the highest concentration among stocks priced over 100 yuan, with 79 stocks, accounting for 35.59% of the total [2] - The mechanical equipment industry has 26 stocks, making up 11.71%, while the computer industry has 24 stocks, representing 10.81% [2] - In terms of market segments, there are 45 stocks from the main board, 72 from the ChiNext board, 5 from the Beijing Stock Exchange, and 100 from the Sci-Tech Innovation Board, with the latter accounting for 45.05% of the high-value stocks [2] Institutional Ratings - Four stocks priced over 100 yuan received "buy" ratings from institutions today, including WuXi AppTec, SiYuan Electric, and Shenghong Technology [2]

Group 1 - The Hainan Free Trade Zone concept rose by 3.42%, ranking fourth among concept sectors, with 27 stocks increasing, including Hainan Development which hit the daily limit, and Shennong Agricultural, Jinpan Technology, and Kangzhi Pharmaceutical showing significant gains of 9.62%, 8.43%, and 7.88% respectively [1] - The Hainan Free Trade Zone concept attracted a net inflow of 1.143 billion yuan from main funds, with 24 stocks receiving net inflows, and 9 stocks exceeding 50 million yuan in net inflow, led by Hainan Development with a net inflow of 326 million yuan [2][3] - The top stocks by net inflow ratio included Hainan Development at 16.84%, *ST Shuangcheng at 10.50%, and Shennong Agricultural at 9.85% [3] Group 2 - The top stocks in the Hainan Free Trade Zone concept included Hainan Development with a daily increase of 10.00% and a turnover rate of 13.46%, followed by Shennong Agricultural with a 9.62% increase and a turnover rate of 28.18% [4] - Other notable stocks included Hainan Airport with a 4.35% increase and a turnover rate of 2.81%, and Zhongtung High-tech with a 7.36% increase and a turnover rate of 6.22% [4][5] - The overall performance of the Hainan Free Trade Zone concept indicates strong investor interest and significant capital inflow, reflecting positive market sentiment towards the sector [2][4]

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Last week, the A - share market first rose and then declined. The daily trading volume of the whole market reached a record high of 3.99 trillion yuan on Wednesday. After the exchange adjusted the margin ratio for margin trading, market sentiment cooled down. The commercial aerospace sector retreated from its high, and the market focus shifted to AI applications, semiconductors, etc. The bond market yield declined, and the 10 - year Treasury bond rate closed at 1.84% on Friday, down 3.58bp from the previous week [1][8][9]. - In the convertible bond market, most individual convertible bonds rose last week. The CSI Convertible Bond Index increased by 1.08% for the whole week, the median price increased by 0.63%, and the arithmetic average parity increased by 1.39%. The conversion premium rate of the whole market decreased by 0.64% compared with the previous week [2][9]. - Although the current market price and the valuation of convertible bonds in each parity range are close to the 100% quantile position in history, the equity market is in a clear upward trend. Institutions are more worried about missing out on the upward trend than about market declines, which strongly supports the valuation of convertible bonds. Currently, it is the stage with the strongest certainty of upward market momentum [3][19]. - For relative returns, it is recommended to focus on lithium - battery, semiconductor equipment and materials, chemical industry, and securities brokerage sectors. For absolute - return funds, attention should be paid to the undervalued leading companies in the still - stagnant industries [4][20]. 3. Summary According to Relevant Catalogs Market Focus (January 12 - January 16, 2026) Stock Market - The A - share market first rose and then declined. The daily trading volume reached a record high on Wednesday. After the adjustment of the margin ratio for margin trading, market sentiment cooled down. The commercial aerospace sector retreated from its high, and the market focus shifted to AI applications, semiconductors, etc. The dividend - paying sector still underperformed. Most Shenwan primary industries declined, with computer, electronics, non - ferrous metals, media, and machinery leading the gains, and national defense and military industry, real estate, agriculture, forestry, animal husbandry, and coal performing poorly [1][8][9]. Bond Market - Although the equity market continued to rise at the beginning of the week, the impact on the bond market weakened significantly. Due to the increasing expectation of an equity market adjustment after a rapid rise, the bond market yield declined. After the central bank cut the interest rate of structural monetary policy tools on Thursday, the yield fluctuated and remained stable overall. The 10 - year Treasury bond rate closed at 1.84% on Friday, down 3.58bp from the previous week [1][9]. Convertible Bond Market - Most individual convertible bonds rose. The CSI Convertible Bond Index increased by 1.08% for the whole week, the median price increased by 0.63%, and the arithmetic average parity increased by 1.39%. The conversion premium rate of the whole market decreased by 0.64% compared with the previous week. Most industries in the convertible bond market rose, with computer, electronics, media, and machinery leading the gains, and national defense and military industry, building materials, coal, and transportation performing poorly. The top - rising individual bonds were related to semiconductors and AI applications, while the top - falling ones were mainly from the commercial aerospace sector [2][9][13]. Views and Strategies (January 19 - January 23, 2026) - The consensus on the upward trend supports the valuation of convertible bonds. The equity market first rose and then declined last week, and the theme shifted from aerospace to AI applications and semiconductor equipment. The relevant convertible bonds performed well, the average parity increased further, and the median market price rose to 139 yuan. The premium rate of equity - biased convertible bonds in the high - parity range increased significantly, and the convertible bond ETF still showed a significant net inflow trend. Newly - listed bonds were still strong [3][19]. - For relative returns, focus on high - probability equity - biased sectors such as lithium - battery (price increases are gradually implemented, and domestic and overseas demand is booming), semiconductor equipment and materials (expansion of Changxin and Changcun, and increasing localization rate), chemical industry (anti - involution in the polyester industry chain), and securities brokerage (benefiting from the booming stock market trading volume and previous underperformance). For absolute - return funds, pay attention to the undervalued leading companies in the still - stagnant industries, including two - wheeled vehicles, beauty and personal care, architectural design, and pig farming [4][20]. Valuation Overview - As of January 16, 2026, for equity - biased convertible bonds, the average conversion premium rates in different parity ranges are at high quantile positions in history. For debt - biased convertible bonds, the average YTM of bonds with a parity below 70 yuan is in the lower quantile position. The average implied volatility of all convertible bonds and the difference between the implied volatility of convertible bonds and the long - term actual volatility of the underlying stocks are also at high quantile positions [21]. Primary Market Tracking - Last week (January 12 - January 16, 2026), Shangtai Convertible Bond and Naipu Convertible Bond 02 announced their issuance, and Aohong, Shuangle, and Jin 05 Convertible Bonds were listed. In the future week (January 19 - January 23, 2026), there are no announcements of convertible bond issuance and listing. Last week, 4 companies got the exchange's approval for registration, 1 company's application was accepted by the exchange, 2 companies' plans passed the shareholders' meeting, and 4 companies released board proposals. Currently, there are 99 convertible bonds to be issued, with a total scale of 155.14 billion yuan [28][34].

Investment Rating - The report indicates a positive outlook for the power equipment industry, particularly in the renewable energy sector, with significant investments and technological advancements expected to drive growth [1][2][4]. Core Insights - The report highlights that the State Grid's investment during the "14th Five-Year Plan" period is projected to reach 4 trillion yuan, marking a 40% increase compared to the previous plan [2]. - The report emphasizes the stability in polysilicon prices and the continuous rise in battery component prices, with N-type battery prices increasing to 0.40 yuan per watt [15][16]. - The report identifies three key areas of focus: supply-side reform leading to price increases in the industry chain, long-term growth opportunities from new technologies, and industrialization opportunities from perovskite GW-level layouts [16]. Summary by Sections 1. New Energy Generation 1.1 Photovoltaics - Polysilicon prices remain stable, while battery component prices are on the rise, with N-type battery prices reaching an average of 0.40 yuan per watt [15]. - The report notes that leading component companies are responding to industry self-discipline by raising component prices, with distributed sales prices reaching 0.72 yuan per watt [15][16]. - Key companies to watch include Tongwei Co., GCL-Poly, LONGi Green Energy, JA Solar, and Trina Solar [16]. 1.2 Wind Power & Grid - The UK AR7 offshore wind auction results exceeded expectations, with a total scale of approximately 8.4GW, validating the upward trend in European offshore wind [17]. - The State Grid's investment is expected to enhance transmission capacity significantly, addressing bottlenecks in renewable energy delivery [18]. - Companies to focus on include Goldwind, Yunda Wind Power, Mingyang Smart Energy, and Sany Heavy Energy [18]. 1.3 Hydrogen & Energy Storage - By 2025, the production and sales of fuel cell vehicles in China are projected to reach 7,797 units, reflecting a 44% year-on-year increase [20]. - The report anticipates that new energy storage installations will reach 58.6GW/175.3GWh by 2025, with significant growth expected in the energy storage sector [21]. - Key players in the hydrogen sector include Shuangliang Energy, Huadian Heavy Industries, and Shenghui Technology [20]. 2. New Energy Vehicles - Solid-state batteries are gaining traction, with several automakers making progress towards mass production by 2026 [29]. - Companies such as BYD, Changan Automobile, and Chery are expected to achieve significant milestones in solid-state battery technology [29]. - The report suggests monitoring companies like Xiamen Tungsten, Hailiang Co., and Nanjing Advanced Lithium Battery [29]. 3. Industry Trends - The report notes a 0.4% increase in the new energy equipment sector from January 12 to January 16, 2026, with a cumulative increase of 5.3% since the beginning of the year [12]. - The photovoltaic equipment sector saw a 3.52% increase, while the wind power equipment sector experienced a decline of 1.28% during the same period [13].

Core Insights - The article emphasizes the importance of "innovation" in Jinpan Technology's growth, highlighting both "incremental" and "breakthrough" innovations as core drivers of the company's development [1][3] Group 1: Product Technology and Market Trends - The global data center market is projected to grow from $242.72 billion in 2024 to $584.86 billion by 2032, with a compound annual growth rate (CAGR) of 11.62% [2] - The demand for solid-state transformers has shifted from being an "optional" to a "standard" component in AIDC, driven by exponential growth in electricity demand [2] - Since 2018, the trade value of power transformers in the US and Europe has doubled, indicating a significant reliance on imported transformers [2] Group 2: Company Developments and Innovations - Jinpan Technology established an AI division in 2024, focusing on integrated power modules and solid-state transformers as key product areas [5] - The company achieved a sales revenue of 974 million yuan in the AIDC sector in the first three quarters of 2025, marking a substantial increase of 337.5% year-on-year [7] - Jinpan Technology has developed a digital factory model, with seven digital factories established in China, enhancing production efficiency and product consistency through data-driven operations [9] Group 3: Global Expansion and Competitive Strategy - Jinpan Technology maintains a dual focus on domestic and international markets, emphasizing the importance of product quality and rapid iteration in its global strategy [10] - The company has established a comprehensive R&D structure to support innovation in new energy and digital solutions, ensuring technological leadership [11] - In the first three quarters of 2025, Jinpan Technology's export revenue reached 1.59 billion yuan, accounting for 30.84% of its main business income, reflecting a significant increase [11]

Core Viewpoint - The transformer sector in the A-share market has become active, with notable stock price increases for companies like Sanbian Technology, Jinpan Technology, and Igor, driven by rising domestic and international demand for transformers, particularly in data centers and energy storage [2][3][12]. Market Activity - Sanbian Technology's stock price has seen consecutive limit-ups on January 13, 14, and 15, with a total increase of 59.5% in just half a month, raising its market capitalization from 3.9 billion to 6.221 billion [3][12]. - Jinpan Technology, a leading player in the dry-type transformer industry, has seen its market capitalization reach 44.571 billion after a nearly 10% increase over two days [4][12]. - Igor's stock price reached a historical high of 38.48 yuan per share after a significant increase, with its main products including new energy transformers and industrial control transformers [4][12]. Performance Overview - Jinpan Technology reported a revenue of 5.194 billion with a year-on-year growth of 8.25% and a net profit of 486 million, up 20.27% for the first three quarters of 2025 [4][13]. - TBEA achieved a revenue of 72.918 billion, a 0.84% increase, and a net profit of 5.484 billion, up 27.55% [4][13]. - Jiangsu Huachen, also in the transformer business, reported a revenue of 1.443 billion, a 37.46% increase, and a net profit of 72.2038 million, up 15.41% [4][13]. - In contrast, Sanbian Technology's revenue fell by 16.91% to 1.239 billion, with a net profit decline of 56.71% to 40.155 million [5][13]. - Igor's revenue increased by 17.32% to 3.808 billion, but its net profit decreased by 12.71% to 178 million [5][13]. Market Demand and Trends - The transformer market is experiencing a boom due to increased demand from both domestic and international markets, particularly driven by the upgrade of traditional power grids in Europe and the U.S. and the growth of renewable energy [6][14]. - The global transformer market is expected to see significant structural changes, with demand in the renewable energy sector growing at a rate exceeding the industry average [7][15]. - The demand for transformers in wind and solar power stations is particularly strong, with projections indicating that nearly 40% of new capacity from 2025 to 2030 will be directly related to renewable energy [7][15]. Future Opportunities - The rise of AI and data centers is creating new opportunities for the transformer market, with high-performance transformers becoming essential for energy conversion [8][16]. - The global data center transformer market is projected to grow from 9.2 billion in 2023 to 16.8 billion by 2032, with a compound annual growth rate of 6.92% [8][16]. - Companies are focusing on the application of transformers in data centers and AI computing power, with Igor expanding its product offerings in this area [9][17].