Caixxin Securities: Double-Digit Growth in Grid Investment Releases Positive Signal, Grid Equipment Industry Welcomes Development Opportunities

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Source: Caixin Securities

In the first year of the 14th Five-Year Plan, State Grid and China Southern Power Grid took the lead in fixed asset investment. From January to February 2026, both achieved high year-over-year growth, highlighting the crucial role of grid infrastructure support. The investment-driven effect continues to release, laying a solid foundation for the year’s power construction and contributing to a strong start for the first quarter’s economy.

According to official announcements from State Grid’s WeChat account, in January and February this year, State Grid’s fixed asset investment totaled 75.7 billion yuan, up 80.6% year-over-year. The support from grid infrastructure and the investment pull effect are significant, setting a new record for the same period and demonstrating the strong investment momentum and execution capacity at the start of the 14th Five-Year Plan.

In terms of investment structure, State Grid’s main network investments are steadily advancing, with explosive growth in technological upgrades and distribution network investments. Currently, the “Eight Crosses and Four Directs” ultra-high voltage projects, along with related flexible interconnection projects and 37 pumped-storage power stations, are progressing as planned. Construction of 35 kV to 750 kV transmission and transformation projects is steadily underway, achieving phased results. To ensure project efficiency, State Grid has deepened project classification and management mechanisms, promoting orderly approval and construction, scientifically scheduling project timelines, and balancing task rhythms.

Regarding grid production technological upgrades and distribution network infrastructure projects, State Grid has planned the year’s schedule comprehensively, strictly implementing work plans, and efficiently advancing key stages such as procurement, start-up, and settlement. This orderly approach promotes project implementation and drives coordinated development across the entire industry chain. As of early March, State Grid had started 160,000 grid production upgrade and distribution infrastructure projects, with a total investment of 33.73 billion yuan, an increase of over 150% year-over-year. Upgrades and technological transformations of distribution networks have become key drivers of investment growth.

Similarly, China Southern Power Grid has performed impressively, fully committed to stabilizing growth and expanding investment, accelerating project reserves and construction. According to its official WeChat announcement, in January and February, China Southern Power Grid completed fixed asset investments of 25.08 billion yuan, up 95.3% year-over-year, nearly doubling the growth rate, striving for a strong start in the first quarter and laying a solid foundation for the annual fixed asset investment target.

This year’s government work report emphasizes fully tapping into and releasing effective investment potential. China Southern Power Grid is diligently implementing the decisions and deployments of the Party Central Committee and the State Council, coordinating the entire year’s fixed asset investment of 180 billion yuan, and accelerating major project implementation. Since the beginning of the year, key projects such as the Zang-Yue direct current project, Guangzhou Tianhe Tangxia flexible direct current project, Yangjiang Sanshandao offshore wind power flexible transmission project, and Huizhou Zhongdong and Zhaoqing Langjiang pumped-storage power stations have been fully mobilized and steadily advanced, becoming important tools for stabilizing investment and promoting growth.

To ensure project progress, China Southern Power Grid has accelerated procurement and bidding work. Since the start of the year, material and construction bidding amounts have increased by 30% year-over-year, with over 1 million meters of metering devices such as electricity meters and measurement terminals supplied. Data shows that in the first two months, China Southern Power Grid’s project material supply reached 12.1 billion yuan, up 57% year-over-year, effectively boosting the upstream and downstream of electrical equipment manufacturing and expanding investment, fully releasing the multiplier effect of grid investment. Moving forward, China Southern Power Grid will continue to accelerate project reserves and construction, aiming to complete over 35 billion yuan in fixed asset investments in the first quarter, better serving high-quality economic and social development.

Caixin Securities notes that in the first year of the 14th Five-Year Plan, the government’s work report clearly outlined tasks such as power construction and computing power coordination. Coupled with large-scale investment plans from State Grid and China Southern Power Grid, policy measures and tangible investments are simultaneously boosting the industry, leading to sustained improvement in the prosperity of the grid equipment sector. Based on this, it is recommended to focus on ultra-high voltage equipment manufacturers, distribution network equipment manufacturers, and those leading exports to overseas markets, maintaining an industry “leader in the large market” rating.

At the same time, the industry should remain vigilant against related risks, including sharp fluctuations in raw material prices, policy progress falling short of expectations, intensified industry competition, domestic grid investment underperformance, slow progress in computing and power coordination technologies, and volatile overseas trade environments.

Market data also shows that since 2025, the grid equipment sector has outperformed the CSI 300 Index. With continued investment in the two major grids, upstream and downstream companies in the industry chain are expected to benefit continuously, making the industry’s long-term development promising.