Pinggao Electric, Sieyuan Electric and TBEA rank among Top 4 winners of State Grid 2026 Second Batch Equipment Tender
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Pinggao Electric, Sieyuan Electric and TBEA rank among Top 4 winners of State Grid 2026 Second Batch Equipment Tender
Citi believes State Grid's second batch Rmb21.4bn transmission and transformation equipment bidding continues to validate grid investment sentiment; new orders will mainly be delivered in 2027E and support revenue and earnings for related equipment leaders.
- State Grid 2026 Second Batch transmission and transformation equipment bidding total amount is Rmb21.4bn, major categories include Transformers, Gas Insulated Switchgear, Power Cables and Switchgear Cabinets.
- China XD led with Rmb1,583m, 7.4% share, followed by Pinggao Electric Rmb1,240m, TBEA Rmb1,223m, Sieyuan Electric Rmb995m.
- Citi expects 2026E China grid capital expenditure to increase by 15% year-on-year, where Jan-Apr 2026 increased by 14.6%.
- Preferred targets are High-Voltage Transformer manufacturers Sieyuan Electric and TBEA, and High-Voltage GIS manufacturer Pinggao Electric.
Report interpretation
Overview
This report comments on State Grid 2026 Second Batch transmission and transformation equipment procurement results. This batch tender total amount is Rmb21.4bn. Top 4 winning bidders are China XD, Pinggao Electric, TBEA and Sieyuan Electric. These companies were also among main winners in 2026 First Batch tender. Report believes new orders will mostly be delivered in 2027E, providing support for relevant companies' revenue and earnings.
Core views
Citi's core view is that China's grid capital expenditure remains in an upward cycle, expected to increase by 15% year-on-year in 2026E, benefiting transmission and transformation equipment leaders. High-voltage transformer suppliers Sieyuan Electric and TBEA, and high-voltage GIS supplier Pinggao Electric are preferred directions emphasized in the report. From bidding structure perspective, Transformers, Gas Insulated Switchgear and Power Cables account for higher proportions, showing strong demand for equipment related to UHV and main grid construction.
Analysis framework
Report mainly combines State Grid bidding amounts, category procurement structure, each company winning share and historical batch comparison to assess order contribution to 2027E performance. For valuation, DCF model is used for major covered companies, supplemented by P/E and P/B multiples cross observation.
Methodology notes
Derive target price based on long-term cash flow projections, terminal growth rate, cost of equity or WACC.
Target prices for Pinggao Electric, NARI Technology, Sieyuan Electric, TBEA and XJ Electric are all based on DCF models because China's grid equipment industry has relatively stable cash flows.
Compare State Grid different batches bidding amounts, category structures and company winning shares.
Report compares 2026 Second Batch with First Batch and multiple 2025 batches to judge leading companies' order continuity and relative competitive position.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Pinggao Electric (600312.SS)Core beneficiary, High-Voltage GIS Supplier.
- Strengths
- Won bid in this batch Rmb1,240m, 5.8% share; New orders equivalent to 7.2% of 2025 domestic new orders; GIS is important equipment for UHV transmission line construction.
- Weaknesses
- Performance sensitive to UHV approval and grid capital expenditure pace.
- Comparison
- Ranked 2nd in this batch, behind only China XD, maintaining leading position since first batch.
- Risks
- UHV project approval below expectations, raw material cost decline below expectations, China grid capital expenditure below expectations.
- Sieyuan Electric (002028.SZ)One of Citi's preferred High-Voltage Transformer directions.
- Strengths
- Won bid in this batch Rmb995m, 4.6% share; New orders equivalent to 3.4% of 2025 domestic new orders; Target price Rmb270.
- Weaknesses
- Valuation target corresponds to approx. 45x P/E and 10.6x P/B for 2026E, high requirement for growth realization.
- Comparison
- Belongs to high-voltage transformer beneficiary direction emphasized by report along with TBEA.
- Risks
- China grid capital expenditure below expectations, overseas new orders below expectations, raw material costs higher than expected.
- TBEA (600089.SS)One of Citi's preferred High-Voltage Transformer directions.
- Strengths
- Won bid in this batch Rmb1,223m, 5.7% share, ranked 3rd; Target price Rmb36.
- Weaknesses
- Besides transformer demand, also affected by polysilicon prices and steel, copper, aluminum and other raw material prices.
- Comparison
- Won bid amount in this batch close to Pinggao Electric, higher than Sieyuan Electric.
- Risks
- Polysilicon prices below expectations, steel/copper/aluminum prices higher than expected, transformer demand below expectations.
- XJ Electric (000400.SZ)Grid equipment coverage target, benefited from transmission and transformation and UHV construction.
- Strengths
- Won bid in this batch Rmb870m, 4.1% share; Target price Rmb33.
- Weaknesses
- Strong dependence on domestic grid capital expenditure and UHV construction progress.
- Comparison
- Winning share lower than top 4 winners, but still belongs to key winning bidders.
- Risks
- China grid capital expenditure below expectations, China UHV project construction slower than expectations, macroeconomic slowdown.
- NARI Technology (600406.SS)Grid automation and related equipment coverage target.
- Strengths
- Won bid in this batch Rmb571m, 2.7% share; New orders equivalent to 1.7% of 2025 domestic new orders; Target price Rmb25.
- Weaknesses
- Round order elasticity relatively smaller compared to Pinggao Electric and Sieyuan Electric.
- Comparison
- Winning share lower than Pinggao Electric, TBEA, Sieyuan Electric and XJ Electric.
- Risks
- Market demand below expectations, customer scheduling and EPC project progress delay, raw material costs higher than expected.
- China XD (601179.SS)Largest winning bidder in this batch, but report notes uncovered.
- Strengths
- Won bid in this batch Rmb1,583m, 7.4% share, ranked 1st.
- Weaknesses
- Report does not provide Citi rating and target price.
- Comparison
- Winning bid amount higher than Pinggao Electric, TBEA and Sieyuan Electric.
- Risks
- Since uncovered, report did not expand on company-level risks; Industry level still affected by grid capital expenditure and project pace.
Key data
- State Grid 2026 Second Batch Transmission and Transformation Equipment Bidding Total AmountRmb21.4bnReport core event.
- Top 4 Winning BiddersChina XD Rmb1,583m/7.4%; Pinggao Electric Rmb1,240m/5.8%; TBEA Rmb1,223m/5.7%; Sieyuan Electric Rmb995m/4.6%Four companies were also main winners in 2026 First Batch tender.
- Other Key Winning BiddersXJ Electric Rmb870m/4.1%; NARI Technology Rmb571m/2.7%All are grid equipment companies covered by Citi and given Buy ratings.
- Major Category AmountsTransformers Rmb4,430m/20.7%; Gas Insulated Switchgear Rmb3,906m/18.3%; Power Cables Rmb3,679m/17.2%; Switchgear Cabinets Rmb2,321m/10.8%High-voltage and transmission main equipment accounts for higher proportion.
- China Grid Capital Expenditure Assumption2026E increase by 15% year-on-year; Jan-Apr 2026 increase by 14.6% year-on-yearForms the macro order background for report's positive judgment.
- New Orders Equivalent Proportion of 2025 Domestic New OrdersPinggao Electric 7.2%; Sieyuan Electric 3.4%; NARI Technology 1.7%Report expects most new orders in this round will be delivered in 2027E.
- Target PricePinggao Electric Rmb24; NARI Technology Rmb25; Sieyuan Electric Rmb270; TBEA Rmb36; XJ Electric Rmb33All from DCF valuation.
Impact & implications
This round of bidding results strengthens grid equipment industry order sentiment, especially beneficial to suppliers with competitiveness in high-voltage transformers, GIS and UHV construction chains. Since report expects orders will mainly be delivered in 2027E, short-term stock catalyst may come from subsequent bidding pace and grid capital expenditure confirmation, while medium-term earnings elasticity depends on order delivery, gross margin and raw material prices.
Risks
- China grid capital expenditure below expectations.
- UHV transmission line approval or construction progress below expectations.
- Steel, copper, aluminum and other raw material costs higher than expected, compressing equipment enterprise profit margins.
- Transformer demand below expectations.
- Sieyuan Electric overseas new orders below expectations.
- NARI Technology related customer scheduling and EPC project progress delays.
- China macroeconomic slowdown affecting power equipment demand.
What to watch
- Scale and category structure of State Grid subsequent batches transmission and transformation equipment bidding.
- Changes in Transformer, Gas Insulated Switchgear, GIS and Power Cable order shares.
- Whether 2026E China grid capital expenditure actual growth rate approaches 15% assumption.
- Delivery confirmation pace and gross margin performance of this round orders in 2027E.
- UHV transmission project approval, commencement and construction progress.
- Price trends of key raw materials such as steel, copper, aluminum.