TGOOD Target Price Raised to RMB 55; AIDC Power Solutions Open New Growth

Overview

UBS issued a research report maintaining a Buy rating on TGOOD (300001.SZ) and significantly raised the 12-month target price from RMB 33 to RMB 55. The report argues that the company not only maintained steady improvement in fundamentals in its traditional power equipment and EV charging businesses but also successfully entered the upward cycle of AI data center capex by launching integrated AIDC power solutions and SST (Solid-State Transformer) technology, establishing a new growth engine. With more optimistic profit forecasts and a shift in valuation benchmarks, UBS is bullish on the company's long-term value re-rating.

Core views

The power equipment business shows dual drivers of steady domestic growth and accelerated overseas expansion. Domestically, benefiting from the recovery in wind power installations and accelerated distribution grid investments, the domestic bid value as of June 9, 2026, grew 46% year-over-year, with high-voltage prefabricated substations accounting for 62%. Product mix optimization drove margin improvement. Overseas, leveraging successful delivery experience in markets such as Saudi Arabia and international certifications like KEMA, the overseas revenue share is expected to rise from 9% in 2025 to 15%/20% in 2026/2027. With overseas gross margins significantly higher than domestic ones, this will pull overall profitability upwards. The electric vehicle charging business is on a track of rising volume and profitability. As EV penetration rates accelerate in both passenger and commercial vehicle segments, coupled with increased energy capacity per vehicle, UBS predicts a 24% CAGR in domestic EV charging demand from 2025-2030. Subsidiary TELD, backed by large-power fast-charging technology and scale advantages, has maintained its market share and continues to improve utilization rates. Although industry competition exists, the room for service fee declines is limited. Charging segment profits are projected to grow 14% and 28% in 2026 and 2027, respectively. AIDC power solutions serve as a key catalyst for valuation re-rating. The newly launched AI PowerHouse integrates 110/220kV prefabricated substations, 800V HVDC/SST modules, and TPS architecture. Compared to traditional solutions, it shortens the delivery cycle from 12-18 months to 150 days, reduces comprehensive costs by 20%, and improves power supply reliability to 99.9998%. Meanwhile, the SST 1.0 prototype has been released with a transmission efficiency of 98.51%, and a more mature 2.0 version is planned for 2027. Additionally, the company established a strategic partnership with global SST leader Eaton, further enhancing its competitiveness in the international large-scale data center market. The market has yet to fully price in the growth potential brought by this technological breakthrough.

Analysis framework

UBS employed a Sum-of-the-Parts (SOTP) valuation method to price TGOOD, reflecting the differentiated growth and risk characteristics of its different business segments. Given that the profitability of the charging business is stabilizing, analysts switched the valuation method from Price-to-Sales (P/S) to Price-to-Earnings (P/E), rolling the valuation benchmark year from 2026 to 2027. Specifically, referencing the industry average for domestic charging equipment and operations, a 20x 2027 PE is assigned to the charging business. Referencing peers with SST layouts in power equipment, a 30x 2027 PE is assigned to the power equipment business. Summing these yields a total market capitalization of approximately RMB 58 billion, corresponding to a target price of RMB 55. This valuation approach aims to more precisely capture the premium capability for the power equipment segment conferred by AIDC new technologies.

Methodology notes

• Valuation MethodologySOTP Segment Valuation

  Sum-of-the-Parts Valuation

  When a company has multiple business segments with vastly different business models, growth rates, or risk profiles, applying a single overall valuation multiple can be distorted. The SOTP method values each business segment independently before summing them, providing a more accurate reflection of a diversified enterprise's true value. In this report, UBS applied different PE multiples to 'Traditional Power Equipment' and 'EV Charging'.

• Valuation MethodologyPE/PEG valuation

  Switch from P/S Valuation to P/E Valuation

  For businesses in the growth phase that are not yet profitable, Price-to-Sales (P/S) valuation is typically used; when a business crosses the break-even point and profitability becomes stable and predictable, it switches to Price-to-Earnings (P/E). The report notes that TGOOD's charging business profitability stability has increased, prompting this methodological switch, which is generally viewed as a signal of improved fundamental maturity.

• Industry/Industrial Analysis FrameworkUpstream-Midstream-Downstream Value Chain Transmission

  Value Chain Transmission of the AIDC Capex Upward Cycle

  Analyzing how AI computing power demand translates into infrastructure investment. The report logic is: AI Large Model Boom → Increased Load Intensity and Reliability Requirements for Data Centers → Increased Capital Expenditure on AIDC Power Infrastructure → Benefit for power equipment vendors possessing High Voltage Direct Current (HVDC), Solid-State Transformer (SST), and Prefabricated Substation technologies. This is a key industrial logic for understanding the company's new growth points.

• Competition and Strategy FrameworkMoat / competitive advantage

  Technology Reuse and Cross-Border Synergy

  Refers to an enterprise migrating core capabilities accumulated in one field to a new field to establish advantages. The report emphasizes that TGOOD reused its '10 years of charging module R&D experience' into 'AIDC HVDC modules' and leveraged its global leading position in the 'High-Voltage Prefabricated Substation' field to serve data centers. This cross-scenario technology synergy constitutes a unique barrier distinguishing it from pure power supply manufacturers in the AIDC power sector.

Asset mapping & comparison

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

• TGOOD (300001.SZ)

  Core Beneficiary: Traditional business provides a safety net; AIDC power and SST technology open a second growth curve

  Strengths

  World's largest prefabricated substation manufacturer; TELD charging network scale and fast-charging technology lead; Full-stack self-developed AIDC power capability; Strategic partnership with Eaton

  Weaknesses

  Charging business service fees face competitive pressure; AIDC new products still in early commercialization stages

  Comparison

  Compared to pure charging pile enterprises, possesses a power equipment foundation; compared to traditional power equipment manufacturers, possesses first-mover advantage in AIDC power and SST

  Risks

  Intensifying competition in the power equipment industry; Decline in charging service fees; Charging pile utilization below expectations; EV penetration rate below expectations

Key data

• Target PriceRMB 55.00Up 67% from previous target price of RMB 33, implying 48.8% upside
• 2026/27 Net Profit Growth Forecast29.2% / 27.4%Dual-driven by power equipment and charging businesses
• Domestic Bid Value Growth (as of 2026.6.9)+46% YoY62% consists of high-voltage prefabricated substations; structure continuously optimizing
• Overseas Revenue Share Forecast15% (2026E) / 20% (2027E)Was 9% in 2025; significant increase driven by large projects in Saudi Arabia, etc.
• Domestic EV Charging Demand CAGR24% (2025-30E)Driven by accelerating EV penetration and increased battery capacity per vehicle
• AI PowerHouse Delivery Cycle150 DaysTraditional substation solutions require 12-18 months; efficiency significantly improved
• SST 1.0 Transmission Efficiency98.51%Outperforms mainstream UPS and HVDC solutions; Version 2.0 planned for 2027

Impact & implications

The report认为 that the market's perception of TGOOD remains confined to traditional power equipment and charging station operators, failing to fully price in its technological breakthroughs and order potential in the AIDC power sector. With the commercialization of AI PowerHouse and SST products, and deepening cooperation with international giants like Eaton, the company is expected to gain market share in the high-value-added track of AI data center power, thereby driving upward revisions to profit forecasts and reconstruction of the valuation system. For investors, this means that in addition to focusing on traditional grid bidding and charging pile utilization data, priority should be given to tracking the validation progress and order acquisition status of AIDC-related products.

Risks

• Revenue growth and profitability of the power equipment segment underperform due to industry competition
• Charging service fees decline further due to fierce competition, dragging down TELD performance
• Decline in charging pile utilization affects charging operating revenue and profits
• Slower-than-expected growth in EV penetration rates, falling below market expectations

What to watch

• Commercialization orders and delivery progress of AIDC power solutions (AI PowerHouse)
• R&D and release schedule of SST 2.0 (target: 2027)
• Acquisition of new orders and revenue recognition in overseas markets (especially Saudi Arabia)
• Domestic high-voltage prefabricated substation bid share and gross margin trends
• Dynamics of charging business utilization and service fees