CITIC SEC has released a research report stating that the "Two Sessions" and the Government Work Report proposed long-term plans to accelerate the comprehensive green transition and establish a new type of power system. A series of major UHV projects are expected to be included in national plans, further clarifying long-term development expectations. Top-level design explicitly targets developing new smart business formats focused on computing-power coordination. Against the backdrop of domestic demand and the advancement of new business formats, it is recommended to focus on core equipment enterprises related to major domestic demand projects, digital power grids, and computing-power coordination. The main views of CITIC SEC are as follows:
Promoting Green Transition, Clarifying Power Grid Construction as the Main Theme. The Government Work Report proposes accelerating the comprehensive green transition, outlining development directions including formulating an energy power construction plan, building a new type of power system, accelerating smart grid construction, developing new energy storage, expanding green power applications, and enhancing the clean and efficient use of fossil fuels. The institution believes that 2030 is a critical milestone for the carbon peak target. Smart grid construction and green power applications are key focuses mentioned in the Government Work Report. Building a clean, low-carbon power system will remain the main theme of power grid development in the coming period.
Targeting New Forms of Smart Economy, Top-Level Design Emphasizes Computing-Power Coordination. For new forms of the smart economy, the Government Work Report proposes implementing new infrastructure projects such as ultra-large-scale intelligent computing clusters and computing-power coordination, strengthening nationwide integrated computing power monitoring and scheduling, and supporting public cloud development. Computing-power coordination has been incorporated into top-level design planning. The institution believes that computing-power coordination highlights coordinated grid-source planning and direct green power applications on one hand, and is linked to grid digitalization and intelligent scheduling capabilities combining power and computing on the other. This promotes further exploration and development of applications in power digitalization.
Ample UHV Projects Planned or Proposed, Solidifying Development Expectations. As the Two Sessions proceed, a series of major UHV project proposals are expected to be included in the national plan. According to statistics from Beijixing Transmission and Transformation Grid, recent UHV projects proposed or planned for inclusion include Shanxi-Beijing-Tianjin-Tangshan, Jinzhong-Changzhi-Heze, Hunshandake Sandland-Beijing-Tianjin-Hebei, Xinjiang Ruoqiang-Sichuan-Chongqing, new power transmission channels from Tibet and Qinghai into Chongqing, Sichuan-Chongqing AC reinforcement project, Weihai, and Lubei transmission and transformation projects. The institution believes that major projects like UHV often see progress catalysts during important policy windows like the Two Sessions. The dense proposal of numerous projects at this time indicates that UHV project construction will remain a core part of energy and power construction during the "15th Five-Year Plan" period. Ample project expectations support the long-term sustainability of UHV construction.
Investment Strategy. The important window of the "Two Sessions" provides an outlook on the five-year plan and development trends for the power equipment sector. The institution believes that the dual-carbon goals and the construction of a new power system will continue to be the main theme of power system development throughout the "15th Five-Year Plan" period. The inclusion or planned inclusion of numerous UHV projects solidifies expectations for the construction and development of major UHV projects. On the other hand, against the backdrop of increasing power demand from AI development and a global cycle of power equipment renewal, new business formats like computing-power coordination continue to be explored and developed. It is recommended to focus on leading equipment manufacturers related to major domestic demand projects and enterprises associated with advanced technology trends such as digital power grids and computing-power coordination.
Risk factors: Power grid investment falling short of expectations; slower-than-expected progress in major project construction; rising raw material prices; slower-than-expected advancement of new technologies and business formats; intensifying industry competition.