HOLT APAC "Electrical Equipment: Robust Value Creation Underpins Sector..."

研报英文原文证据摘录

HOLT APAC "Electrical Equipment: Robust Value Creation Underpins Sector..."

Global Research

3 July 2026ab

HOLT APAC Equities

Asia PacificElectrical Equipment: Robust Value Creation

Underpins Sector Rerating Industrial

Raphael Lee

HOLT Sector Specialist

raphael.lee@ubs.com

Electrical Equipment has been a standout performer within APxJ year-to-date, supported +65-6212 3008

by AI-driven demand for power generation and grid infrastructure. HOLT examines

Hock Leng Ng

CFROI and valuation trends across the sector to identify where improving fundamentals

remain attractively valued, and where share prices may have run ahead of fundamentals. hockleng.ng@ubs.com

+65-6212 3009

Forecast CFROI at decade highs last seen in 2016

CFROI for APxJ Electrical Equipment is forecast to reach decade highs of 8.4% and 8.9%

in 2026-27e respectively, levels last seen in 2016. This improvement in economic returns

is broad-based, with two-thirds of companies forecast to deliver sequential years of

higher CFROI. At the market level, HK/China, Taiwan and Korea exhibit a strong breadth

of improvement, while India presents a narrower opportunity set for CFROI improvers.

Valuations are elevated but not excessive

The industry continues to trade at a premium to both its historical average and the

broader APxJ market on HOLT Market Implied Yield (MIY). However, valuations remain

below the extremes reached during the 2021 clean energy and EV boom. The current

premium is increasingly supported by stronger economic returns and improving value

creation.

Fundamentals are constructive but momentum remains the key market driver

While the fundamental backdrop remains constructive, momentum remains the

dominant market driver year-to-date. Sentiment Mismatch opportunities within the