Orient Securities released a research report stating that with the implementation of the State Grid's four trillion yuan investment plan under the '16th Five-Year Plan' in early 2026, the domestic power equipment industry is expected to maintain a high-growth cycle. The secondary round of UHV tenders primarily focuses on AC projects, which is anticipated to significantly boost demand for GIS. Regarding overseas expansion, both domestic and international power equipment companies reported strong order intake in the first quarter, supporting a positive outlook for a super-cycle in power equipment exports, with the domestic and overseas power equipment sectors experiencing synchronized growth. The main views of Orient Securities are as follows:
The State Grid's secondary UHV tender is driving GIS demand. On April 17, the State Grid issued the second equipment tender procurement announcement for its 2026 UHV projects. This tender involves 21 sections and 122 packages, mainly centered around AC projects such as Panxi, Zhejiang Loop, Yanwei, Zhaoyuan Nuclear Power Transmission, and Dalat-Mengxi. Core materials include key power equipment like 1000kV gas-insulated switchgear, 1000kV reactors, and 1000kV transformers. The total tender value is estimated to exceed 9 billion yuan, which is expected to substantially increase orders for GIS-related enterprises and support future performance.
GEV's strong Q1 report indicates accelerating power equipment demand. Driven by both AIDC and grid modernization, global demand for gas turbines and power equipment continues to rise. On April 22, GEV disclosed its Q1 2026 results, reporting revenue of $9.3 billion and adjusted EBITDA of $896 million, both exceeding market expectations. The company raised its full-year revenue guidance to $44.5-$45.5 billion. Quarterly orders reached $18.3 billion, a 71% year-on-year increase, with the total order backlog climbing to $163 billion. Benefiting from volume and price increases, along with efficiency improvements in its transmission business and grid system integration, the electrification business has become a new growth driver. New orders in Q1 amounted to $7.1 billion, an 86% year-on-year increase, with an order-to-shipment ratio of approximately 2.5 times, leading to a rapid accumulation of the order backlog. Data centers contributed about $2.4 billion, exceeding the total for the full year 2025.
Domestic power equipment companies are experiencing high order growth in exports, supporting optimism for a super-cycle in overseas expansion. Recent reports from domestic companies show that in Q1 2026, Jinpan Technology's new overseas orders reached 2.252 billion yuan, a surge of 280.73% year-on-year, accounting for 67.34% of the company's total new sales orders for the quarter. In the data center sector, the company achieved sales revenue of 383 million yuan, an increase of 103.77% year-on-year, and secured sales orders of 1.735 billion yuan, a sharp increase of 278.45% year-on-year. Sieyuan Electric also demonstrated steady operational improvement, with synergistic efforts in both domestic and international markets. According to the company's 2025 annual report, new orders in 2025 reached 28.891 billion yuan, up 34.64% year-on-year, with the order target for 2026 further increased to 37.5 billion yuan. Total operating revenue for 2025 was 21.539 billion yuan, an increase of 39.34% year-on-year, of which overseas market revenue was 5.803 billion yuan, up 85.84% year-on-year.
With synchronized growth domestically and internationally, there is firm optimism regarding the power equipment sector's performance. The power equipment industry as a whole is currently in a high-growth cycle. Domestic infrastructure demand provides solid support, while the global tight balance between power supply and demand highlights overseas market gaps, creating broad export opportunities for leading domestic power equipment companies. Both domestic and international related companies are reporting high order intake, reinforcing a positive outlook for investment opportunities in the power equipment sector.
Risk warnings include potential shortfalls in State Grid investment, slower-than-expected UHV construction, and weaker-than-anticipated overseas demand for power equipment.