From overseas perspective, the global new energy installation is rapidly growing through driving of the demand such as power grid upgrading, infrastructure expansion, manufacturing scale expansion, data center construction, cross-border power grid interconnection and etc. This drives the power grid investment into the prosperous cycle, and the overseas power equipment market has considerable space.
According to a research report released by Huaxi, Asia Vets, under the background of energy transformation and increasing demand for electricity consumption, the rigid demand attribute of energy and power is highlighted, and the overall domestic and foreign power grid investment is expected to move into the prosperous cycle. From an overseas perspective, the rapid growth of global new energy installation, power grid upgrading, infrastructure expansion, manufacturing scale expansion, data center construction, and cross-border power grid interconnection and other demands drive the power grid investment into the prosperous cycle. From a domestic perspective, the large-scale access of new energy will drive the corresponding demand for power equipment, including ultra-high pressure related equipment such as primary and secondary fusion equipment, and companies with stable market share or continuously growing market share will benefit significantly.
(I) Under systematic transformation, the rigid demand of power grid is highlighted.
Currently, under the acceleration of global energy transformation and the continuous increase in electricity demand and infrastructure construction in multiple regions, coupled with the aging problem of power grid, many regions face urgent needs for new or upgraded power grid construction. The rigid demand for supporting power grid construction is highlighted based on the pressure from the generation side and the load side.
(II) Overseas: resonance of multiple factors drive the prosperity of power grid investment.
In the United States, driven mainly by electricity consumption, including rapid expansion of manufacturing and data center construction, coupled with power grid upgrading and growth of new energy installation, the electricity network investment in the United States is expected to prosper. Multiple utility companies raised their capital expenditures / capital investment plans.
In Europe, driven by energy transformation, the urgent investment demand of the power grid is brought about by energy transformation, aging of power grid, and increased pressure on the load side. The electric power investment in Europe enters into the prosperous cycle, and multiple TSOs are expected to increase power grid investment, and the demand for distribution network investment will rise.
(III) Domestic: new energy and intelligentization promote the increase of power transmission and distribution construction.
With the large-scale development of new energy, the construction of ultra-high voltage network is accelerated. At the same time, the trend of digital transformation of distribution network is clear, and the investment scale of related aspects is expected to expand. Recently, power grid investment continues to increase. From January to May 2024, the completed investment in power grid projects reached 170.3 billion yuan, a year-on-year increase of 22%.
(IV) Investment Suggestions.
Under the background of energy transformation and increasing demand for electricity consumption, the rigid demand attribute of energy and power is highlighted, and the overall domestic and foreign power grid investment is expected to move into the prosperous cycle. From an overseas perspective, the rapid growth of global new energy installation, power grid upgrading, infrastructure expansion, manufacturing scale expansion, data center construction and cross-border power grid interconnection and other demands drive the power grid investment into the prosperous cycle. The overseas power equipment market has considerable space, and relevant aspects include transformers, smart meters, switches, etc. Enterprises with overseas customer supply base, channel advantages, and production capacity layout overseas will benefit significantly. From a domestic perspective, the large-scale access of new energy will drive the corresponding demand for power equipment, including ultra-high pressure related equipment such as primary and secondary fusion equipment, and companies with stable market share or continuously growing market share will benefit significantly.
Risk Warning: risks such as overseas trade policy risks, power grid investment falling short of expectations, increased market competition, policy changes, and new technological changes, etc.
Under the background of energy transformation and increasing demand for electricity consumption, the rigid demand attribute of energy and power is highlighted, and the overall domestic and foreign power grid investment is expected to move into the prosperous cycle. From a domestic perspective, the large-scale access of new energy will drive the corresponding demand for power equipment, including ultra-high pressure related equipment such as primary and secondary fusion equipment, and companies with stable market share or continuously growing market share will benefit significantly.