Pinggao wins the most orders in State Grid's second batch of UHV equipment procurement

Overview

This report is Citi's event-driven commentary on China's power equipment sector, with the core event being State Grid's announcement of award results for its second batch of equipment procurement for UHV transmission line construction in 2026. This batch totaled Rmb9.4bn, significantly larger than the first batch and close to half of the total amount across all five batches in 2025. The report highlights that Pinggao won the highest amount among listed companies in this batch, while also noting rapid growth in China's grid capex and the possibility that more UHV AC projects in 2026e could bring follow-on tender opportunities.

Core views

Citi's core view is that UHV transmission line equipment procurement is entering a stronger tender cycle, and Pinggao is the most direct beneficiary thanks to the highest awarded amount in this batch and expectations for stronger GIS delivery growth. The report also believes that grid capex grew rapidly in 1Q26 and that the trend is likely to continue in 2Q26e; within China's grid equipment sector, Citi favors Sieyuan Electric for rapid export growth, Pinggao for its domestic UHV order advantage, and TBEA for its low valuation.

Analysis framework

The report uses order event-driven analysis, first breaking down the total procurement amount, product mix, and company award shares in State Grid's second batch of equipment procurement, then combining grid capex, improvement in fixed asset investment, Pinggao's backlog, and 2026e delivery plans to assess order elasticity and sector momentum for related companies.

Methodology notes

• Order share analysisBreakdown of State Grid tender results

  Use awarded amount and share to measure companies' short-term order elasticity

  The report compares the awarded amounts and shares of listed companies in the Rmb9.4bn second-batch procurement to identify the main beneficiaries of this round of UHV equipment procurement.

• Capex trackingGrid capex and FAI linkage

  Use grid capex and fixed asset investment improvement to assess the demand backdrop

  The report cites 1Q26 China grid capex up 40% YoY to Rmb167.5bn, and notes that civil construction spending contributed significantly to the FAI improvement, providing the macro backdrop for follow-on strength in equipment procurement.

• Order delivery verificationGIS delivery and backlog analysis

  Use delivery milestones and backlog to validate revenue visibility

  The report lists Pinggao's 2026e 1,100kV and 750kV GIS delivery volumes, project sources, and Rmb12.6bn backlog structure to support its view on growth in the company's UHV equipment business.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Pinggao / Henan Pinggao Electric Co (600312.SS)

  The main focus of this report and the biggest listed-company order winner in this batch

  Strengths

  Won Rmb2.092bn in this batch, or 22.3%; 2026e 1,100kV GIS deliveries are expected to increase 36% YoY; backlog stood at Rmb12.6bn at end-2025.

  Weaknesses

  Backlog for international projects is only Rmb100m, and the company previously made adjustments after the cancellation of high-risk contracts.

  Comparison

  Its awarded share is higher than China XD Electric's 20.2%, TBEA's 5.0%, Sieyuan Electric's 2.1%, and NARI's 1.5%.

  Risks

  Subsequent UHV tender timing, project delivery, copper price pass-through, and changes in competitive share could affect order conversion and margins.

• China XD Electric (601179.SS)

  Not covered, but the second-biggest listed-company order winner in this batch

  Strengths

  Won Rmb1.899bn in this batch, or 20.2%; its subsidiary Xian Xidian Switchgear Electric Co Ltd alone won Rmb1.45bn.

  Weaknesses

  The report does not provide coverage, nor does it discuss target price or earnings forecasts in detail.

  Comparison

  Its order amount was second only to Pinggao and significantly above TBEA, Sieyuan Electric, and NARI.

  Risks

  As an uncovered name, it lacks support from Citi's valuation framework, and order sustainability still depends on subsequent State Grid batches.

• TBEA Co (600089.SS)

  A Buy-rated name and one of Citi's sector top picks

  Strengths

  Won Rmb473m in this batch, or 5.0%; Citi lists it as one of its top picks on the basis that its valuation is not expensive.

  Weaknesses

  Its order share in this batch was clearly below Pinggao and China XD Electric.

  Comparison

  Among listed companies in this batch, its awarded amount ranked behind Pinggao and China XD Electric.

  Risks

  If its share of follow-on UHV equipment orders is insufficient or valuation re-rating catalysts are lacking, its stock price elasticity may lag the order leaders.

• Sieyuan Electric (002028.SZ)

  A Buy-rated name and one of Citi's sector top picks

  Strengths

  Citi highlights its rapid export growth, exceeding 80% YoY; it won Rmb196m in this batch, or 2.1%.

  Weaknesses

  Its share of domestic State Grid UHV equipment orders in this batch was small.

  Comparison

  Compared with Pinggao, Sieyuan Electric's investment appeal is more geared toward export growth rather than domestic order share in this batch.

  Risks

  Whether high export growth can continue, as well as changes in overseas demand and exchange rates, may affect earnings delivery.

• NARI Technology Co (600406.SS)

  A Buy-rated name and an observation target for grid capex trends

  Strengths

  Won Rmb144m in this batch, or 1.5%; the report cites NARI's explanation of the grid capex structure and 2Q26e trend.

  Weaknesses

  Its awarded amount in this batch was below Pinggao, China XD Electric, TBEA, and Sieyuan Electric.

  Comparison

  Its role in the report is more to explain the grid capex cycle rather than to represent the biggest beneficiary of this batch's orders.

  Risks

  If grid capex growth slows or the share of equipment procurement is below expectations, order elasticity may be constrained.

Key data

• Total amount of the second batch of UHV equipment procurementRmb9.4bnMore than double the Rmb4bn in the first batch of 2026, and equal to 42.6% of the combined Rmb22.1bn across five batches in 2025.
• Pinggao awarded amount and shareRmb2.092bn, 22.3%The highest awarded amount among listed companies in this batch; Henan Pinggao Electric Co Ltd alone won Rmb1.94bn, accounting for 20.6% of total orders.
• China XD Electric awarded amount and shareRmb1.899bn, 20.2%Its subsidiary Xian Xidian Switchgear Electric Co Ltd won Rmb1.45bn, accounting for 15.4% of total orders, making it the second-largest individual winner.
• TBEA, Sieyuan Electric, and NARI award statusTBEA Rmb473m/5.0%; Sieyuan Electric Rmb196m/2.1%; NARI Rmb144m/1.5%Citi still lists Sieyuan Electric, Pinggao, and TBEA as its top picks in China's grid equipment sector.
• Product mix1,000kV GIS Rmb5.4bn/57.4%; raw materials Rmb1.184m/12.6%; 1,000kV reactors Rmb655m/7.0%There is a potential unit mismatch risk between the amount and ratio for raw materials in the original text, which should be checked against the original table.
• Number of awarded entities79, averaging about Rmb119m/entityOrder concentration was relatively high, with the top three individual winners being Henan Pinggao Electric, Xian Xidian Switchgear Electric, and Shandong Electric Hitachi High-Voltage Switch-gear.
• China grid capex1Q26 Rmb167.5bn, up 40% YoYNARI said the increase mainly came from civil engineering, and expects the rapid growth trend to continue in 2Q26e.
• Pinggao new orders in 2025Rmb13.9bn, up 12% YoYThe company expects more equipment tenders for UHV transmission line construction in 2026e, including three AC projects approved in 2025 but still awaiting tender, as well as at least two additional AC projects that may be approved in 2026e.
• Pinggao 2026e GIS deliveries1,100kV 15 bays, up 36% YoY; 750kV more than 100 bays, up 7.5% YoYThe corresponding 2025 figures were 11 bays and 93 bays; 2026e 1,100kV deliveries include the Aba, Yantai-Weihai, Caozhou, and power plant projects.
• Pinggao backlogRmb12.6bn at end-2025Including Rmb11.3bn in high-voltage projects, Rmb1.2bn in distribution equipment, and Rmb100m in international projects; high-voltage GIS backlog includes 34 bays of 1,100kV and 150 bays of 750kV.

Impact & implications

This round of tendering reinforces the view of an upward cycle in China's UHV equipment market. For Pinggao, the highest awarded share, strong GIS delivery growth, and ample backlog improve 2026e revenue visibility; for the sector, strong growth in State Grid capex and the approval/tendering of subsequent AC UHV projects may continue to support equipment makers' orders. From an investment perspective, Citi prefers companies with advantages in order share, export growth, or valuation.

Risks

• Subsequent approval or equipment tender progress for UHV transmission line projects may come in below expectations.
• If incremental grid capex continues to skew toward civil engineering, the pace of equipment procurement may lag.
• If rising copper prices cannot be fully passed through in tender pricing, equipment makers' margins may be squeezed.
• Intensifying competition in subsequent State Grid batches may lead to lower award shares for major companies.
• Cancellation of high-risk international contracts or delivery delays may affect order quality and revenue recognition.

What to watch

• The total amount, product mix, and company award shares in subsequent State Grid UHV equipment procurement batches.
• Progress of equipment tenders for the three AC projects approved in 2025: Dalate-Mengxi, Panzhihua-Xichang, and Zhejiang Ring Network.
• Whether at least two additional AC UHV projects will be newly approved in 2026e.
• Pinggao's 1,100kV and 750kV GIS delivery pace, and the conversion of its Rmb12.6bn backlog.
• Changes in copper prices and their pass-through effect on tender prices, costs, and gross margins.
• The sustainability of 2Q26e China grid capex growth and the improvement in fixed asset investment.