CHINA INDUSTRIAL TECH: DATA CENTER ELECTRICALS: What to expect in 2H26 on overseas expansion and domestic capex trend; 2Q26 preview; maintain Buy on Kstar, Neutral on Kehua/Megmeet

研报英文原文证据摘录

CHINA INDUSTRIAL TECH: DATA CENTER ELECTRICALS: What to expect in 2H26 on overseas expansion and domestic capex trend; 2Q26 preview; maintain Buy on Kstar, Neutral on Kehua/Megmeet

Goldman Sachs China Industrial Tech: Data Center Electricals

Kstar (002518.SZ, Buy)

2Q26 preview: We forecast 2Q26 sales/GP/EBIT/NP at

Rmb1,561mn/468mn/203mn/170mn (+28%/+34%/+45%/+20% yoy). Topline growth

will likely be led by the energy storage products segment (>100% yoy sales growth in

2Q26 per GSe) given strong residential and C&I (commercial & industrial) ESS demand

from Europe, Australia, and emerging markets with a low base in 1H25. We expect data

center product segment sales to grow by >20% yoy in 2Q26, supported by strong

overseas UPS ODM shipment and a gradual recovery of domestic data center

construction demand. Meanwhile, solar inverter sales will see severe yoy contraction

given the domestic solar installation weakness, in our view. We also model yoy and qoq

improvement for both GPM and OPM at 30.0%/13.0% as overseas sales mix increases,

but we model NP to grow slower after baking in ~Rmb20mn FX losses during the quarter

due to CNY appreciation.

Key debates and watchpoints:

1. Investors are worried that UPS will quickly be replaced by 800VDC products which is

a key overhang for the share price and trading multiple, but we have been arguing

the global UPS demand should remain intact in the mid term. Recent evidence

includes: (1) Kstar’s production line for large-power UPS (mainly for AI data centers)

has been running at close to full utilization rate since May 2026 and they are

expanding capacity by converting the ones for solar inverters to manufacture UPS;

and (2) company has made much new progress in the overseas market so far this