CITIC Securities: Focus on power equipment leaders released by UHV demand

The Zhitong Finance App learned that CITIC Securities released a research report saying that data from the State Grid's next-generation e-commerce platform shows that recently, the State Grid has successively opened the third equipment tender for the 2026 UHV project and the third substation equipment (including cable) tender for the transmission and transformation project in 2026. It is recommended to focus on the domestic demand sector of the power grid after the collapse, focusing on leading domestic high-voltage power equipment companies that not only received high-voltage substation orders in 2025, but also welcomed the release of UHV tenders in 2026. Unlike the latter half of the last UHV market, the landing of mass order tenders led to a rise in sentiment. Currently, UHV orders continue to be released, which is conducive to a steady recovery in the stock prices of leading low-level high-voltage companies.

CITIC Securities's main views are as follows:

The third batch of UHV's bid performance continued to be high.

The total bid amount for the candidates winning the third batch of UHV equipment from the State Grid in 2026 was 10.872 billion yuan. The cumulative bid amount for the first three batches during the year reached 29.261 billion yuan (the first three batches of 2025 was 3.78 billion yuan, and the full year of 2025 was 22.062 billion yuan). The procurement amount for the first three batches of 2026 has greatly exceeded the full year of 2025. This batch of tenders involved about 10 UHV and back-to-back networking projects, focusing on adding the Shaanxi—Henan ±800kV UHVDC transmission project (total investment of about 19.2 billion yuan) and the Rusu back-to-back networking project (5.563 billion yuan). During the year, UHV tenders showed the characteristics of “continuous implementation of multiple projects, AC+DC+back-to-back resonance”.

UHV core equipment maintains a good pattern of high concentration.

In the third batch of UHV purchases, converter valves, converter transformers, and combined electrical appliances ranked among the top three in product demand, with procurement amounts of 4,022 billion yuan/3,545 billion yuan/726 million yuan respectively. Judging from the bid situation of listed companies, China Xidian, TBEA, Xu Ji Electric, Guodian Nanrui, and Pinggao Electric won 2,632 billion yuan/2,312 billion yuan/1,245 million yuan/756 million yuan/750 million yuan respectively, with a total share of about 70.77% of the TOP5. The UHV tenders continued to show a good pattern of high concentration.

Substation tenders are expected to continue to be booming.

The announcement of the winning candidates for the third substation equipment (including cable) for the 2026 transmission and transformation project of the State Grid showed that the total bid amount was 17.440 billion yuan, and the cumulative bid amount for the first three batches of 2026 exceeded 50 billion yuan. As the substation tender amount in 2025 reached a record level, the cumulative bid amount for the first three batches of 2026 has declined slightly over the same period last year. Combined with the intensive implementation of UHV and other main network projects, we determine that substation procurement will maintain a high trend during the year, and demand for 26H2 is expected to be further released, which resonates with demand for UHV procurement. Considering the high degree of convergence of suppliers in the main network segment and the full number of orders for power substations in 2025, the performance support of leading companies within the network has been continuously strengthened.

Risk factors:

Grid investment growth has slowed; UHV tenders have fallen short of expectations; substation tenders have fallen short of expectations; and raw material prices have fluctuated greatly.