Analysis of the Impact of State Grid's RMB 4 Trillion Investment Plan on the Valuation of the Power Equipment Industry

I will now provide you with a systematic and comprehensive analysis report.

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On January 15, 2026, State Grid officially announced that its fixed-asset investment during the 15th Five-Year Plan period will reach

, hitting a record high, representing a 40% increase compared to the RMB 2.8 trillion investment in the 14th Five-Year Plan period[1][2]. This is a continuation of State Grid’s years of increasing investment scale:

Year	Investment Amount (100 million RMB)	YoY Growth Rate	Milestone
2022	5,012	-	First time exceeding 500 billion
2023	5,381	+7.4%	Maintained growth
2024	6,083	+13.0%	First time exceeding 600 billion
2025	>6,500	+6.9%	Hit a new record high

According to the capital investment directions disclosed by State Grid, investment during the 15th Five-Year Plan period will focus on the following areas[1][2]:

• Ultra-High Voltage (UHV) Construction
  : Cross-provincial and cross-regional power transmission capacity will increase by
  over 30%
  compared to the end of the 14th Five-Year Plan, supporting the development and external transmission of clean energy bases in desert regions and large-scale hydropower bases in Southwest China.
• Distribution Network Upgrading
  : Construction of distribution networks in urban, rural, and remote areas, and exploration of end-user supply guarantee and off-grid microgrid models.
• Smart Grid
  : Enhancement of digital and intelligent infrastructure, digital empowerment of the power grid, and application of artificial intelligence in grid operation and maintenance.
• New Energy Accommodation
  : Construction of accommodation and regulation capacity for approximately 20 GW of newly added new energy per year.

In December 2025, the National Development and Reform Commission issued the “Guiding Opinions on Promoting High-Quality Development of Power Grids”, which clearly states[2]:

• By 2030, the scale of “West-East Power Transmission” will exceed
  42 GW
• Newly added inter-provincial power mutual assistance capacity of
  40 GW
• Support the proportion of new energy power generation to reach
  around 30%
• Capacity to accommodate distributed new energy reaches
  90 GW
• Support over
  40 million
  charging infrastructure units

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Based on data analysis of 8 leading companies in the power equipment industry[3][4], the current industry shows the following valuation characteristics:

Indicator	Value	Industry Positioning
Average Forecasted PE	25.0x	Moderately high, with tech growth sector attributes
Average Price-to-Book Ratio (PB)	3.09x	Relatively reasonable, reflecting asset quality
Average ROE	11.6%	Good, outperforming the manufacturing industry average
Average EPS Growth	30.8%	High growth, supporting valuation expansion

Company	Stock Price (RMB)	Forecasted PE	EPS Growth Rate (%)	ROE (%)	PB	Valuation Assessment
TBEA Co., Ltd. (600089)	12.09	18.5	28.5	14.2	2.8	Undervalued, High Growth
Chint Electric Co., Ltd. (601877)	22.45	12.8	18.3	16.5	2.2	Significantly Undervalued
XD Xi’an Electric (601179)	7.34	22.3	20.2	8.5	2.1	Reasonable Range
Baobian Electric Co., Ltd. (600500)	3.76	28.6	73.1	6.8	2.5	High Growth Supports High Valuation
XJ Electric Co., Ltd. (000400)	26.86	32.5	15.6	11.2	3.8	Relatively High
NARI Technology Co., Ltd. (600406)	28.30	25.6	22.4	15.8	4.2	Reasonably High

Intrinsic value calculation of core companies using professional valuation models[0]:

:

• Current Price: RMB 12.09
• Conservative Scenario Valuation: RMB 216.57 (+610.1%)
• Base Case Scenario Valuation: RMB 267.57 (+777.3%)
• Optimistic Scenario Valuation: RMB 456.79 (+1397.7%)
• Weighted Average Valuation: RMB 313.64 (+928.3%)

:

• Current Price: RMB 7.34
• Conservative Scenario Valuation: RMB 5.43 (-62.2%)
• Base Case Scenario Valuation: RMB 7.57 (-47.3%)
• Optimistic Scenario Valuation: RMB 10.55 (-26.5%)
• Weighted Average Valuation: RMB 7.85 (-45.3%)

Based on the DCF analysis, TBEA benefits more from State Grid’s investment plan, and its intrinsic value is significantly undervalued.

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Investment Segment	2024 (100 million RMB)	2025E (100 million RMB)	Growth Rate (%)	Benefit Level
UHV Equipment	850	1,050	+23.5%	⭐⭐⭐⭐⭐
Smart Grid	520	680	+30.8%	⭐⭐⭐⭐⭐
Distribution Equipment	680	820	+20.6%	⭐⭐⭐⭐
Secondary Equipment	280	350	+25.0%	⭐⭐⭐⭐
Transformer	420	520	+23.8%	⭐⭐⭐⭐
Cable	380	450	+18.4%	⭐⭐⭐

: The global power transformer delivery cycle remains at a high level of , and the overseas supply gap is difficult to fill in the short term, so domestic enterprises are expected to continue to enjoy simultaneous growth in volume and profit[4]. Jinpan Technology recently signed a RMB 696 million power product supply contract with overseas customers, and multiple manufacturers stated that their order books are full.

: In 2025, State Grid’s bidding amount for power transmission and transformation equipment reached , a year-on-year increase of 25.3%[1]. Among them, transformers account for 21%, power cables account for 17%, and the bidding amount for distribution network areas and joint bidding reached RMB 124.57 billion.

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Boosted by the news of State Grid increasing its investment, the power grid equipment sector rose sharply in the afternoon of January 15[1][4]:

Stock Code	Stock Name	Intraday Increase	Year-to-Date Cumulative Increase
600500.SH	Baobian Electric Co., Ltd.	>8%	>30%
600089.SH	TBEA Co., Ltd.	>8%	>10%
002879.SZ	Changlan Technology Co., Ltd.	>8%	>10%
601179.SH	XD Xi’an Electric	>8%	>30%

Since 2025, the power grid equipment sector has recorded

, with over 90% of individual stocks rising[4]. Sanbian Technology ranks first with a 59.50% increase.

Margin traders’ aggressive buying of power equipment stocks this week[4]:

Stock	Net Margin Purchase (100 million RMB)
TBEA Co., Ltd.	10.66
NARI Technology Co., Ltd.	>2
Chint Electric Co., Ltd.	>2
XJ Electric Co., Ltd.	1.80
Jinpan Technology	1.53

Institutional forecasts show that the performance of the vast majority of power grid equipment stocks will achieve year-on-year positive growth in 2026[4]:

Company	Forecasted Net Profit Growth Rate	Number of Rating Institutions
Far East Holding Group Co., Ltd.	+66%	3 or more
Guangxin Technology Co., Ltd.	+52%	3 or more
Zhiyang Innovation Technology Co., Ltd.	+41%	3 or more
Zhongrong Electric Co., Ltd.	>30%	3 or more
Oriental Cable Co., Ltd.	>30%	3 or more
Jinpan Technology	>30%	3 or more

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Driver	Impact Level	Mechanism of Action
Increased Order Book Saturation	⭐⭐⭐⭐⭐	State Grid’s 6 bidding batches in 2025 lay the foundation for 2026 deliveries
Enhanced Earnings Certainty	⭐⭐⭐⭐⭐	Leading enterprises have full order books, and earnings realization is predictable
Overseas Demand Resonance	⭐⭐⭐⭐	Aging grid upgrades in North America + AIDC demand extend delivery cycles
AI Computing Power Demand	⭐⭐⭐⭐⭐	“The End of AI is Power”, upward revision of computing power drives demand for power equipment
New Energy Accommodation	⭐⭐⭐⭐	Growth in wind and solar installed capacity forces accelerated grid investment

According to calculations, for every RMB 100 billion increase in computing power capital expenditure, it can be converted into

of electricity[4]. From 2025 to 2030, the compound annual growth rate of electricity consumption in China’s data centers may reach as high as , driving the growth rate of total social electricity consumption from 4.5% to 5.3%.

: Industry insiders predict that driven by the dual factors of accelerated global grid construction and AIDC demand, the industry has a significant supply-demand gap, and the dividend period is expected to last .

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Company	Current PE	Industry Average PE	Repair Space	Recommendation Rating
Chint Electric Co., Ltd.	12.8x	25.0x	+95%	Key Focus
TBEA Co., Ltd.	18.5x	25.0x	+35%	Key Focus
XD Xi’an Electric	22.3x	25.0x	+12%	Focus
Pinggao Electric Co., Ltd.	24.8x	25.0x	Reasonable	Focus

• TBEA Co., Ltd., XD Xi’an Electric, Baobian Electric Co., Ltd.
• Rationale: UHV construction has entered an accelerated period of approval and bidding, with full order books

• NARI Technology Co., Ltd., XJ Electric Co., Ltd., Chint Electric Co., Ltd.
• Rationale: Demand for intelligent transformation of distribution networks is released, with strong policy support

• Oriental Cable Co., Ltd., Changlan Technology Co., Ltd., Jinpan Technology
• Rationale: Strong demand for overseas grid upgrades, and the supply-shortage pattern continues

Risk Type	Specific Content	Risk Level
Policy Risk	Grid investment progress falls short of expectations	Medium
Capacity Risk	Industry capacity expansion leads to oversupply	Medium
Price Risk	Decline in equipment prices compresses gross profit margin	Medium-Low
Overseas Risk	Geopolitics affects overseas business expansion	Low
Technology Risk	Changes in technical routes affect product demand	Low

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State Grid’s RMB 4 trillion investment plan during the 15th Five-Year Plan period will have a

on the valuation of the power equipment industry:

1. Upward Shift in Valuation Central Tendency
   : The industry’s average PE is expected to shift from 25x to above 30x, and the valuation repair space for leaders in UHV and distribution equipment is larger
2. Enhanced Certainty of Earnings Growth
   : The 2025 bidding orders provide a solid foundation for 2026 earnings, and the industry’s overall profit growth rate is expected to remain at
   20%-30%
3. Continuous Inflow of Institutional Capital
   : Margin traders aggressively bought leading stocks such as TBEA and NARI Technology, and industrial capital continued to increase holdings
4. Source of Valuation Premium
   : The superposition of three drivers - AI computing power demand, overseas grid upgrades, and new energy accommodation - strengthens the industry’s long-term growth logic
5. Key Focus Targets
   : TBEA Co., Ltd. (Undervalued + High Growth), Chint Electric Co., Ltd. (Significantly Undervalued), XD Xi’an Electric (UHV Leader), NARI Technology Co., Ltd. (Smart Grid Leader)

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[1] Sina Finance - “State Grid Releases RMB 4 Trillion Record Investment Plan, Key Directions Clarified” (https://finance.sina.com.cn/roll/2026-01-16/doc-inhhncwz2674898.shtml)
[2] Eastmoney - “State Grid’s Fixed-Asset Investment Will Reach RMB 4 Trillion During the 15th Five-Year Plan Period” (https://wap.eastmoney.com/a/202601163622138132.html)
[3] Jinling AI - Valuation Data Analysis of the Power Equipment Industry [0]
[4] Eastmoney Research Institute - “Increasing Investment by RMB 4 Trillion! Power Grid Equipment Benefits, List of Latest High-Growth Potential Stocks Released” (https://emwap.eastmoney.com/a/202601163621027418.html)
[5] Eastmoney Research Institute - " [Hot Research Report] AI Computing Power and Global Grid Construction Dual-Drive High Prosperity of Power Equipment" (https://wap.eastmoney.com/a/202601133617301221.html)
[6] Sina Finance - “Power Grid Equipment Market Faces Multiple Catalysts” (https://finance.sina.com.cn/stock/relnews/cn/2026-01-16/doc-inhhpfkr5383971.shtml)