[Changjiang Electric New Energy] Grid: Focus on Bottom Direction of 26H2 Earnings Turning Point # Transformer Exports, UHV, Electricity Meters

English summary

After recent adjustments in the power grid sector, some targets have reached relatively low valuation levels. We believe three major directions (# transformer exports, UHV, electricity meters) are likely to see accelerated earnings in 26H2, and we strongly recommend them! 1. Transformer exports: Driven by AI electricity demand, transformer companies' export orders continue to exceed expectations. In 26H1, earnings growth has not yet been reflected due to FX and revenue recognition pace, but a turning point is expected in 26Q3: 1) Considering delivery cycles, North America revenue recognition is expected to accelerate in Q3; 2) The base for domestic new energy step-up transformers falls in 25Q3; 3) FX losses will narrow YoY. Targets: 思源, 金盘, 安靠, 伊戈尔, 华明, 特锐德, 明阳, etc. 2. UHV: UHV bidding significantly expands in 2026. In 26H1, 1 DC, 5 AC, and 5 back-to-back projects have been bid, with equipment amounts nearing 30 billion yuan, exceeding the full year of 2025. In 26H2, 2 more DC lines are expected to be bid. It is expected that 2026 bidding scale will exceed the previous peak in 2023, laying the foundation for supply chain delivery volume in 2027-2028. Targets: 平高, 许继, 南瑞, 西电, 特变, etc.…