Group 1: Market Overview - A-shares have shown volatility around the 4100-point mark since February, with predictions of continued adjustments in the market [1][3] - As of February 5, the Shanghai Composite Index closed at 4075.92, reflecting a decline of 0.64% [3] Group 2: Foreign Investment Trends - Morgan Stanley reported a significant acceleration in foreign capital inflow, with net inflows from US and EU mutual funds reaching $8.6 billion (approximately 59.7 billion RMB) in January, the highest since October 2024 [1][6] - In January, active funds from the US and Europe turned net inflow for the first time in nearly three years, amounting to approximately $1.2 billion (about 8.3 billion RMB), while passive funds saw inflows of $7.4 billion (around 51.3 billion RMB) [6][18] - The number of new accounts opened on the Shanghai Stock Exchange surged to 4.9 million in January, surpassing the previous peak of 3.1 million in March 2025 [7][19] Group 3: Investor Sentiment - Investor sentiment has improved, with retail investors showing increased participation in the market [6][19] - Goldman Sachs noted that the recognition of "Chinese innovation" and interest in AI and robotics themes are expected to support strong market sentiment throughout 2026 [1][9] Group 4: Foreign Research Interest - Over 163 A-share companies have been researched by foreign investors since the beginning of the year, with companies like Huaming Equipment and InnoCare attracting significant attention [3][15] - AI-related companies remain the most favored among foreign investors, with firms like Huichuan Technology receiving over 65 institutional research visits, with more than 80% from foreign entities [15][16] Group 5: Future Market Outlook - Fidelity International expressed optimism about the resilience of the Chinese market, highlighting attractive valuations compared to global peers [10][22] - Invesco also maintains a positive outlook, citing improving fundamentals and long-term growth drivers for A-shares [10][22] - The market is expected to experience structural growth opportunities in 2026, driven by industrial upgrades, advancements in AI applications, and upgrades in the consumer market [12][23]

Group 1 - Foreign institutions have conducted over 500 research visits to A-share listed companies since the beginning of 2026, with notable firms like Point72 Asset Management, Morgan Asset Management, BlackRock, Goldman Sachs, and Morgan Stanley participating in the research [1][2] - The top three companies attracting foreign research interest are Huaming Equipment, Ying Shi Innovation, and Huichuan Technology, with 59, 58, and 53 foreign institution visits respectively [3][4] - Point72 Asset Management has been the leading foreign institution in research visits for three consecutive years from 2023 to 2025, with a total of 255, 259, and 269 visits in those years [3] Group 2 - The focus of foreign institutions has shifted towards high-end manufacturing and technological innovation in China, indicating a structural growth opportunity driven by these sectors [4] - The investment sentiment in the Chinese stock market is gradually recovering, supported by precise fiscal stimulus, monetary easing policies, and industrial upgrade policies, despite short-term market volatility [5] - The AI sector is expected to remain a key investment theme in 2026, with projected growth rates significantly outpacing most manufacturing and TMT sectors [5]

Group 1 - The core announcement is that Huaming Equipment (002270) has repurchased a total of 13,820,809 shares, which represents 1.5421% of its total share capital [1] - The total amount spent on the share repurchase is approximately 220.72 million yuan, with the repurchase price ranging from 14.74 yuan to 17.80 yuan per share [1]

Core Viewpoint - Huaming Equipment (002270.SZ) announced a share buyback program, repurchasing a total of 13,820,809 shares, which represents 1.5421% of the company's total share capital [1] Summary by Category Share Buyback Details - The company conducted the share buyback through a dedicated securities account via centralized bidding transactions [1] - The highest transaction price during the buyback was 17.80 CNY per share, while the lowest was 14.74 CNY per share [1] - The total amount spent on the buyback was 220,724,415.58 CNY, excluding transaction fees [1]

证券代码：002270 证券简称：华明装备 公告编号：〔2026〕004 号 华明电力装备股份有限公司 关于回购公司股份进展的公告 本公司及董事会全体成员保证信息披露的内容真实、准确和完整，没有虚 假记载、误导性陈述或重大遗漏。 根据《上市公司股份回购规则》《深圳证券交易所上市公司自律监管指引第 9 号——回购股份》相关规定：公司应当在回购期间每个月的前三个交易日内 披露截至上月末的回购进展情况。现将公司截至上月末的回购股份进展情况公 告如下： 一、回购股份的进展情况 截至 2026 年 1 月 31 日，公司通过股份回购专用证券账户以集中竞价交易 方式回购公司股份 13,820,809 股，占公司目前总股本的 1.5421%，最高成交价 为 17.80 元 / 股 ， 最 低 成 交 价 为 14.74 元 / 股 ， 成 交 总 金 额 为 人 民 币 220,724,415.58 元（不含交易费用）。本次回购符合相关法律法规要求，符合 既定的回购方案。 二、其他说明 华明电力装备股份有限公司（以下简称"公司"）于 2025 年 2 月 28 日召开 第六届董事会第十五次会议审议通过了《关于回购公司股份方 ...

Summary of Conference Call Notes Industry Overview - The transformer manufacturing sector in China is experiencing a surge in demand, with factories in Guangdong and Jiangsu operating at full capacity, and some orders for data center projects extending to 2027 [1] - The delivery cycle for the U.S. market has increased from 50 weeks to 127 weeks, indicating a significant backlog in supply [1] Core Insights and Arguments - The demand side is exceeding expectations due to the initiation of new energy construction and grid upgrades since 2023, alongside an anticipated AI boom in 2025 that is accelerating data center development [1] - On the supply side, there is a rigid production capacity, and delays in expansion plans from overseas manufacturers are contributing to a high dependency on electric transformers [1] - The industry has faced long periods of low profit margins prior to 2023, leading to a reduction in production capacity and a loss of skilled labor [1] - Major companies like Siemens Energy and Hyundai Electric are experiencing delays in capacity expansion due to postponed training for technical personnel [1] Additional Important Points - China's transformer production capacity accounts for 60% of the global market, with delivery cycles being less than one-fifth of that of European and American companies, which aligns with the urgent need for AI computing power and data center construction [2] - A review of current expansion plans from overseas manufacturers indicates that by 2030, there will still be a 10% shortage of electric transformers in Europe and the U.S., suggesting continued benefits for domestic companies from overseas orders [2] Investment Recommendations - Suggested investments include high-voltage equipment exports and components from companies such as Siyi Electric, TBEA, and Huaming Equipment [2] - Domestic investment opportunities are identified in companies like Pinggao Electric, China West Electric, XJ Electric, and Guodian NARI [2]

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **grid and electrical equipment** sector, particularly in the context of global investment trends and structural demand drivers across regions including **China, ASEAN, the US, and the EU** [2][3][10]. Core Insights and Arguments - **Structural Upcycle**: Analysts believe the current upcycle in grid equipment is structural rather than cyclical, supported by high manufacturing utilization and multi-year order visibility across **APAC** [3][10]. - **Investment Needs**: Global grid investment reached approximately **$450 billion** in 2025, but this is still below the estimated **$1 trillion** needed annually by 2050 to meet demand [4]. - **Aging Infrastructure**: About **45%** of global grid assets are over **20 years old**, with significant replacement needs emerging, particularly in the US where the average transformer is around **40 years old** [4][10]. - **OEM Backlogs**: Equipment suppliers are experiencing unprecedented demand, with average selling prices for transformers increasing by approximately **75%** since 2019, and high-voltage cable costs nearly doubling [5][10]. Regional Developments - **China**: The 15th Five-Year Plan mandates a record investment of **RMB 4 trillion** by 2030, a **40%** increase from previous plans, focusing on high-voltage expansion to support renewable energy [7]. - **ASEAN**: Leaders have agreed to accelerate the ASEAN Power Grid, aiming to double cross-border capacity by 2040, supported by an **$800 billion** financing initiative [7]. - **US**: Federal programs, including a **$65 billion** grid modernization fund, are pushing utilities to enhance and expand networks [7]. - **Europe**: The European Commission has introduced a new Grid Package requiring **€584 billion** in transmission investment by 2030 [7]. Capacity and Constraints - Manufacturing capacity for grid equipment is tight across APAC, with Japan operating at nearly **100%** utilization. Expansion plans are in place, but skilled labor shortages and input constraints remain significant challenges [12]. - Orderbooks are strong, particularly in Korea, where companies report **30%** year-over-year growth in orderbooks, with lead times extending to **3-4 years** [13]. Pricing Dynamics - Anticipated price increases in China due to potential tariff adjustments in the 2026 regulatory cycle are expected to support average selling price hikes and margin expansion [14]. - Japan's Hitachi aims to increase EBITDA margins from **13-15%** to **16-20%** by FY30, indicating a focus on disciplined pricing and higher-value products [14]. Demand Drivers - Demand is driven by a multi-year structural grid upgrade cycle across APAC, with significant needs for replacement and modernization of aging infrastructure, as well as the integration of digital automation and smart grid technologies [15][16]. Investment Recommendations - Companies positioned at the core of structural grid equipment demands, such as **NARI Technology**, **Hitachi**, and **Hyundai Electric**, are highlighted as key beneficiaries of the ongoing investment cycle [18][19]. - NARI Technology is particularly noted for its alignment with China's domestic grid investment priorities, with expectations of sustained pricing uplift and market share gains [18]. Conclusion - The combination of aging infrastructure, rising demand from renewable energy, and the need for modernization and digitalization in grid systems suggests a robust growth outlook for the grid equipment sector across APAC, with favorable pricing power and earnings durability anticipated [10][11].

Summary of Key Points from the Conference Call Industry Overview - The focus is on China's power grid equipment sector, with a bullish outlook on grid capital expenditure (CAPEX) growth, projected at an 11% compound annual growth rate (CAGR) for 2026-2030, up from a previous estimate of 9% [2][10][13]. Core Insights and Arguments - **CAPEX Growth Drivers**: - The State Grid's Rmb4 trillion investment plan under the 15th Five-Year Plan (FYP) indicates a 7% CAPEX CAGR [3][15]. - Historical data shows that actual grid investments during previous FYPs exceeded initial targets by 2-18%, suggesting potential for similar outcomes in the future [3][15]. - Structural factors such as electrification, energy security, and the integration of renewables are increasing the urgency for grid reinforcement [7][20]. - **Pricing Upside**: - Anticipated increases in transmission and distribution (T&D) tariffs starting in 2026 could enhance grid economics, with each Rmb0.01/kWh increase potentially generating Rmb634 billion in pre-tax profit over the 2026-2030 period, equating to 14% of total grid CAPEX during the 15th FYP [3][20]. - **Earnings Revisions**: - Earnings per share (EPS) estimates for 2025-2027 have been revised from -31% to +18%, reflecting stronger volume outlooks and improved pricing [4][32]. - NARI Technology is highlighted as a top pick, with expected earnings growth of 22% CAGR, driven by its alignment with State Grid's CAPEX growth [4][32]. Key Companies and Their Performance - **NARI Technology (600406.SS)**: - Price target raised from Rmb28.00 to Rmb42.00, with EPS revisions indicating a 7-16% increase for 2026-2027 [32][35]. - The smart grid and energy digitalization segments are expected to drive revenue growth [33]. - **Ningbo Sanxing Medical Electric (601567.SS)**: - Price target increased from Rmb30.00 to Rmb39.10, but EPS forecasts were trimmed by 25% due to weaker revenue and margins [41][44]. - The power equipment segment is expected to recover with a projected 20% YoY increase in average selling prices (ASP) in 2026 [44]. - **Willfar Information Technology (688100.SS)**: - Price target raised from Rmb45.00 to Rmb64.00, with EPS revisions up by 4% for 2026 and 11% for 2027, driven by grid investment acceleration [48]. Valuation Insights - Key power grid equipment stocks are trading at an average forward price-to-earnings (P/E) ratio of 23x, below the historical average of 24x and the peak of 40x [2][28]. - Domestic-focused stocks have underperformed export-driven peers by 191 percentage points since January 2025, indicating potential for re-rating as domestic CAPEX growth becomes more apparent [7][28]. Additional Important Points - The market currently underestimates the potential for domestic grid CAPEX growth, which could lead to significant earnings upgrades and valuation re-ratings across the sector [27][28]. - The report emphasizes the importance of investor positioning, which is currently skewed towards export-driven stocks, suggesting a potential rotation towards domestically focused names as CAPEX surprises materialize [7][28]. This summary encapsulates the key insights and projections regarding the power grid equipment sector in China, highlighting the expected growth in CAPEX, pricing dynamics, and the performance of specific companies within the industry.

J P M O R G A N Asia Pacific Equity Research 28 January 2026 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. China Power Equipment Expert call takeaways on 15th FYP grid capex; Nari Tech and Sieyuan Electric our top picks in 1H26 The share prices of China po ...

2026年开年以来，中国电力设备板块表现亮眼。摩根大通1月28日发布一份研究报告，称其覆盖的电力 设备公司股价年初至今平均上涨约20%，大幅跑赢同期上证综指约5%的涨幅。 摩根大通认为，这一强劲表现背后，是超预期的电网资本开支与持续旺盛的出口需求形成的双重支撑。 随着"十五五"规划对电网投资的部署逐步明晰，特高压、配网自动化等关键领域投资加速，电力设备行 业正迎来新一轮黄金发展周期。 01 十五五电网投资蓝图明晰 摩根大通与行业专家交流确认，"十五五"期间中国电网投资将呈现加速态势，投资重点明确且增长动力 强劲。 在投资规模方面，特高压作为电网投资的核心抓手，投资额度将实现显著跃升。"十五五"期间特高压投 资将从"十四五"的3800亿元增至5000亿元以上，规划批准20条直流特高压线路和15条交流特高压线路。 其中，仅"十五五"前两年就将批准6条直流特高压线路，特高压审批速度的加快将直接拉动相关设备需 求集中释放。 投资结构上，"十五五"电网投资将聚焦三大核心领域：特高压工程、二次设备以及配网建设。具体来 看，继电保护设备、电力调度自动化系统、虚拟电厂相关系统、电力交易系统等产品需求将持续旺盛， 直流特高压线 ...