Siemens released its 24Q2 earnings report, with the power grid department's 24Q2 orders +28% year-on-year, and revenue +29% year-on-year. The increase in orders was mainly affected by large high-voltage DC (HVDC) orders in Italy. Affected by the growth rate of performance in the first half of the year, Siemens raised its profit growth forecast for the power grid sector from 18-22% to 32-34% for the whole year.

Recently, Eaton released the 24Q1 report. In summary, US transformer demand and new orders continue to exceed expectations.

1) The US power equipment business achieved revenue growth of 17% year-on-year and 0.3% month-on-month;

2) Order volume. Orders delivered within 12 months increased by 8%, reserve orders increased by 31%, and the number of inquiries for important projects also increased by 169%;

3) At the industry level, demand for data center construction (especially AI-related) is growing rapidly, and the company raised the industry's compound growth forecast for 22-25 to 25% (previously 16%).

On May 8, the new national standard for transformers, “Power Transformer Energy Efficiency Limits and Energy Efficiency Rating” (GB20052-2024), was officially released and will be implemented on February 1, 2025. The standard will completely replace the old standard (GB 20052-2020), which aims to improve the energy efficiency level of power transformers and promote the green and sustainable development of the power industry.

Compared with the 2020 standard, the focus is on adding energy efficiency limits and energy efficiency levels for three-phase 6kV, 10kV, 35kV, and 66kV voltage classes for photovoltaics, wind power, and energy storage on the new energy generation side.

The introduction of the new national standard is expected to greatly increase domestic demand for stock replacement and renewal.

At present, the boom in distribution transformers continues. Institutions pay attention to the implementation of overseas and domestic grid connection standards, discuss fewer barriers, and track them according to the boom framework.

High voltage transformers have begun to recover from the bottom. We need to pay attention to the construction and implementation of domestic UHV and European and American high voltage power grids. The most optimistic situation is cyclical growth.

Electric power equipment related enterprises:

Weisheng Holdings (03393): Weisheng Holdings is a leading supplier of energy metering equipment, systems and services in China. The company's core products and services are electric AMI business, communication and fluid AMI business, and ADO business, respectively. Guoyuan International previously pointed out that in 2024, tenders for State Grid electric energy meters will accelerate, and industry sentiment will continue to improve; the company has a significant first-mover advantage in overseas electric energy meters, and overseas business can be expected to grow in the future. On April 7, the State Grid announced the results of the first bidding and procurement of metering equipment in 2024. Among them, the subsidiary Weisheng Group won contracts for about 899,000 smart meters, with a contract value of about 306 million yuan. At the same time, the subsidiary Weisheng Information Technology also won contracts for about 56,000 data collection terminals and concentrators, with a contract value of about 106 million yuan. The company won contracts with a cumulative value of about 412 million yuan in centralized tenders from the State Grid during the year.

Dongfang Electric (01072): The company is the core listing platform of Dongfang Electric Group. It has many core asset sectors such as the Group's power equipment manufacturing, engineering contracting, power plant services, trade, and finance. According to the announcement, the company's revenue from the clean and efficient energy equipment business this year increased by 5.905 billion yuan over the same period last year, up 40.21% year on year, mainly in the coal power, gas engine, and nuclear power business.