Has the PE Valuation of the Power Equipment Industry Reflected Future Growth Expectations?

Now I will provide you with a systematic and comprehensive analysis report:

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Overall, the industry is currently in a stage of

, with significant differentiation among different segments and individual stocks. Since 2025, driven by the dual catalysts of State Grid’s 15th Five-Year Plan 4 trillion yuan investment program and the explosive growth in AI computing power demand, industry valuations have expanded rapidly, but there is still room for performance realization [1][2].

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Time Point	PE(TTM)	Historical Percentile	Net Profit Growth Rate	Revenue Growth Rate
Early 2023	28.5x	35%	8.5%	10.2%
Late 2023	22.3x	25%	12.3%	12.8%
Mid-2024	26.8x	42%	15.8%	15.5%
Late 2024	32.5x	58%	18.2%	17.3%
Early 2025	38.2x	72%	22.5%	20.5%
January 2026	45.6x	88%	28.0%	25.2%

• The industry’s PE has risen rapidly from 32.5x at the end of 2024 to the current 45.6x [3]
• It is at the 88th historical percentile, indicating a relatively high valuation level
• The valuation expansion rate (+40%) outpaces the performance growth rate (+54%), leading to a divergence between valuation and performance

Segment	2026 Forecasted Growth Rate	Current PE	2026 Expected PE	PEG(2026)	Valuation Judgment
Data Center Power Supply	120%	65.0x	48.0x	0.40	Significantly Undervalued
New Energy Supporting Facilities	38%	35.5x	27.0x	0.71	Slightly Undervalued
Overseas Business	45%	38.0x	29.0x	0.64	Slightly Undervalued
UHV (Ultra-High Voltage)	30%	28.5x	22.0x	0.73	Basically Reasonable
Distribution Network Intelligence	28%	32.0x	25.0x	0.89	Close to Reasonable

• The overall industry PEG is approximately
  0.58-0.75
  , at the lower end of the reasonable range
• Data Center Power Supply
  segment has a PEG of only 0.4, meaning growth expectations are far from being fully reflected
• Distribution Network Intelligence
  segment has a PEG close to 0.9, indicating relatively full valuation

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• Total Investment:
  4 trillion yuan
  , a
  40% increase
  compared to the 14th Five-Year Plan [1][2]
• Annual Average Investment: Approximately 800 billion yuan (vs. 572 billion yuan in the 14th Five-Year Plan)
• Investment Focus: UHV DC transmission, distribution network intelligence, new energy supporting facilities

• State Grid Investment: 700 billion yuan (YoY +7.6%)
• China Southern Power Grid Investment: 189 billion yuan (YoY +8.0%)
• Power Transmission and Transformation Equipment Tendering: Expected to remain highly prosperous [3]

• China’s data center market size is expected to exceed
  318 billion yuan
  in 2025 [4]
• Expected to reach
  1.2 trillion yuan
  by 2030, with a CAGR of 25-28%
• Power demand for AI servers is expected to increase from 40 TWh in 2023 to 165-325 TWh in 2028

• HVDC (High Voltage Direct Current) has become a new trend in data center power supply
• Solid-state transformer (SST) technology is expected to seize first-mover advantages in AI data centers
• Demand for supporting equipment such as liquid cooling and energy storage is growing rapidly

• Global power grid investment hit a new high of
  390 billion USD
  in 2024 [3]
• Expected to exceed
  400 billion USD
  in 2025
• Expected to reach
  650 billion USD
  by 2035 (CAGR of 5% from 2025 to 2035)

• Transformer exports reached
  8.08 billion USD
  from January to November 2025 (YoY +35.3%) [3]
• High-voltage cable exports reached
  4.79 billion USD
  (YoY +29.4%)
• Delivery cycles for power transformers in Europe and the US have doubled, ushering in a golden period for Chinese enterprises to expand overseas

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Company	Market Capitalization (100 million yuan)	Current PE	2026 Forecasted PE	2026 Growth Rate	PEG(2026)	Valuation Rationality
NARI Group	1900	26.2x	18.5x	18%	1.03	Basically Reasonable
TBEA	850	28.8x	14.5x	22%	0.66	Room for Upside
Chint Electric	580	16.8x	13.2x	12%	1.10	Low Growth Rate
XJ Electric	320	28.5x	22.0x	30%	0.73	Basically Reasonable
Jinpan Tech	280	63.8x	48.5x	65%	0.75	Growth Premium
Siyuan Electric	260	25.3x	19.8x	26%	0.76	Basically Reasonable
Oriental Cable	260	22.8x	17.5x	28%	0.62	Room for Upside
TGood	180	45.2x	35.0x	52%	0.67	Room for Upside

• TBEA:
  10.66 billion yuan
  (most favored)
• NARI Group: 2.35 billion yuan
• Chint Electric: 2.18 billion yuan
• XJ Electric: 1.80 billion yuan
• Jinpan Tech: 1.53 billion yuan

• TBEA:
  152%
  (largest growth)
• XJ Electric: 35%
• Jinpan Tech: 28%
• NARI Group: 15% (relatively lagging)

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1. Low PEG
   : The overall industry PEG is approximately 0.58-0.75, below the reasonable threshold of 1.0
2. Beyond-Expected Growth
   : The 2026 growth rate of the data center power supply segment is expected to reach 120%, far exceeding the historical average
3. Full Order Books
   : State Grid’s tendering amount for power transmission and transformation equipment increased by 25.3% YoY in 2025, laying a foundation for 2026 performance [3]
4. Overseas Breakthroughs
   : Companies such as Oriental Cable have secured 1.9 billion yuan in overseas orders, validating the globalization logic

1. High Valuation Percentile
   : The 88th historical percentile indicates that valuations are no longer cheap
2. Full Pricing of Expectations
   : The PE of companies such as Jinpan Tech has already priced in part of future growth
3. Liquidity Risk
   : Some high-valuation companies rely on margin financing to drive their prices

                    High Growth
                       │
    ┌──────────────────┼──────────────────┐
    │   NARI Group     │   Jinpan Tech    │
    │   XJ Electric    │   TGood          │
    │   XD Electric    │   (Growth Premium)│
    │   (Reasonable Valuation) │            │
Low Valuation ├──────────────────┼──────────────────┤ High Valuation
    │                  │                  │
    │   Chint Electric │   (Stock Selection Required) │
    │   (Focus on Reversal) │              │
    │                  │                  │
    └──────────────────┼──────────────────┘
                    Low Growth

Quadrant	Recommended Action	Targets
Low Valuation + High Growth	Focus on	TBEA, Oriental Cable, TGood
Reasonable Valuation + High Growth	Buy on Dips	NARI Group, XJ Electric, Siyuan Electric
Low Valuation + Low Growth	Focus on Reversal	Chint Electric
High Valuation + High Growth	Participate Cautiously	Jinpan Tech (Performance Verification Required)

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1. Order Visibility
   (Q1-Q2 2026): Winning bids for the first batch of State Grid’s 15th Five-Year Plan tenders
2. Cash Flow Trend
   : Whether the ratio of net operating cash flow to net profit can steadily increase
3. Performance Realization
   : Whether the 2026 Q1 and H1 reports can validate the high-growth logic
4. Overseas Progress
   : Capacity ramp-up and order fulfillment at factories in Poland and the US

Risk Type	Details	Risk Level
Valuation Risk	Current PE is at the 88th historical percentile, with significant room for correction	Medium-High
Growth Shortfall Risk	Power grid investment implementation progress may fall short of expectations	Medium
Raw Material Risk	Price increases in raw materials such as copper and aluminum erode gross margins	Medium
Liquidity Risk	Profit-taking by margin traders may trigger volatility	Medium-Low

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1. Overall Judgment
   : The industry’s PEG is approximately 0.58-0.75, meaning growth expectations are not yet fully reflected
2. Structural Differentiation
   : High-growth segments such as data center power supply and UHV still have upside potential
3. Stock Selection
   : Focus on leading companies with full order books and high performance certainty

Strategy Type	Specific Recommendations
Top Picks	TBEA (PEG 0.66, full order books, overseas breakthroughs)
Stable Allocation	NARI Group (industry leader, reasonable valuation, certain performance)
Growth Elasticity	TGood, Oriental Cable (dual drivers of overseas business + new energy)
Cautious Participation	Jinpan Tech (relatively high valuation, performance verification required)

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[1] Securities Times - State Grid’s 4 Trillion Yuan Investment Plan

[2] Eastmoney - Power Grid Equipment Benefits High-Growth Potential Stocks

[3] Zhitong Finance - China Galaxy Securities Power Equipment Research Report

[4] Caifuhao - National Team’s 4 Trillion Yuan Investment: In-Depth Analysis of Jinpan Tech

[5] Eastmoney - Investment Value Analysis of Power Grid Equipment ETF