April China power transformer exports rose 27% YoY; switchgear exports accelerated materially

Overview

This report is Goldman Sachs' monthly tracking of China grid technology and power transformer exports, with a focus on updating China export data, U.S. pricing, and the supply-demand gap through April 2026. The report shows that in April, export value of China's transformers above 10MVA total capacity rose 27% YoY, switchgear exports rose 77% YoY, the U.S. transformer PPI remained at a high level, and the three-month rolling average export price of China's 220-330MVA transformers to the U.S. rose 23% YoY.

Core views

The core view is that although the gap between U.S. power transformer local demand and supply is expected to gradually narrow as domestic capacity expands, it will still be around 60% by 2028E, meaning shortages will not disappear quickly and Chinese suppliers still have export opportunities. Among China grid technology names, Goldman is more positive on Sieyuan and NARI Technology: Sieyuan benefits from transformer export opportunities and a broader product portfolio; NARI Technology benefits from domestic grid capital expenditure and export potential in converter valves and secondary equipment; Huaming's growth potential in transformer components is believed to have already been largely reflected in the share price.

Analysis framework

The report cross-validates demand and price trends through multiple dimensions, including export value, export region structure, breakdowns of U.S.-bound exports by voltage level, U.S. PPI, China's export prices, and raw material prices, and combines the macro supply-demand gap with individual stock product exposure to form an investment ranking for grid equipment companies.

Methodology notes

• Factor profileGS Factor Profile

  growth, financial returns, valuation multiples, and composite score

  Goldman factor profiling provides investment context for individual stocks by comparing their growth, financial returns, valuation multiples, and composite metrics versus the coverage universe and industry peers.

• M&A frameworkM&A Rank

  score for potential acquisition probability

  Goldman uses an M&A score from 1 to 3 to measure the probability that a covered company becomes an acquisition target, where 1 indicates high probability, 2 medium probability, and 3 low probability.

• Database toolQuantum

  financial history, forecasts, and ratio database

  Quantum is Goldman Sachs' proprietary database for in-depth single-company analysis or cross-industry and cross-market company comparisons.

Asset mapping & comparison

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

• Sieyuan Electric

  A key Chinese grid technology name favored by Goldman, rated Buy

  Strengths

  Benefits from export opportunities amid global transformer supply tightness, and its broader product range allows it to benefit from growth in switchgear exports and other categories.

  Weaknesses

  Export growth may fluctuate with monthly orders and deliveries, and U.S. domestic capacity expansion will gradually narrow the supply-demand gap.

  Comparison

  Versus Huaming, Sieyuan is viewed as having stronger leverage to complete-system and multi-category export opportunities.

  Risks

  Slower overseas demand, trade policy changes, price declines, raw material cost volatility, and uncertainty in delivery schedules.

• NARI Technology

  A key Chinese grid technology name favored by Goldman, rated Buy

  Strengths

  Benefits from domestic grid capex and has export potential in converter valves and secondary equipment.

  Weaknesses

  Export opportunities may be less immediate than direct transformer export names, and part of the growth still depends on the pace of domestic grid investment.

  Comparison

  Versus Sieyuan, NARI Technology is more exposed to domestic grid capex and technical equipment such as grid automation and converter valves.

  Risks

  Changes in domestic grid investment pace, overseas project execution slower than expected, product certification for overseas expansion, and competitive pressure.

• Huaming

  A covered name at Goldman, rated Neutral

  Strengths

  Has stable growth potential in transformer components exports.

  Weaknesses

  The report believes the related growth potential has already been largely reflected in the share price.

  Comparison

  Versus Sieyuan and NARI Technology, Goldman has a more neutral risk-reward view on Huaming.

  Risks

  Valuation already reflects growth, component export growth falls short of expectations, and raw material and FX volatility.

Key data

• April growth in China's total transformer export valueYoY +27%Measured by export value of transformers with total capacity above 10MVA; slowed from +56% YoY in March.
• April growth in China's transformer exports to the U.S.YoY +95%Slowed from +118% YoY in March, but still maintained strong growth.
• April growth in China's switchgear exportsYoY +77%Accelerated sharply from +5% YoY in March; year-to-date growth was +38% YoY.
• U.S. power transformer demand/local supply gapCurrent 72%, expected 60% in 2028EGoldman expects domestic capacity expansion to narrow the gap, but shortages will still persist.
• China 220-330MVA transformer export price to the U.S.Three-month average from Feb-Apr +23% YoYThe single-month April price fell 14% YoY, but the rolling average still showed clear growth.
• U.S. switchgear PPIApril +14% YoYIndicates strong price inflation for U.S. switchgear.
• April regional contribution of China's transformer exportsAsia 30%, Africa 23%, Europe 21%, North America 19%, Middle East 12%, Latin America 3%Africa +681% YoY, North America +66% YoY, Asia +38% YoY, Middle East -26% YoY, Europe +9% YoY, Latin America -63% YoY.

Impact & implications

For investors, the persistent U.S. supply-demand gap, elevated PPI, and China export growth together support overseas revenue opportunities for Chinese grid equipment companies. Companies with clearer benefit paths include Sieyuan, which has export flexibility in transformers and switchgear, and NARI Technology, which benefits from domestic grid capex and export potential; Huaming also has a transformer components export growth thesis, but the report believes the stock price has already largely reflected the opportunity.

Risks

• U.S. domestic transformer capacity expands faster than expected, weakening import demand and price support.
• China transformer export prices are volatile, and the April single-month price for the 220-330MVA category was already down 14% YoY.
• Raw material price volatility may affect margins, especially grain-oriented electrical steel and copper.
• Trade policy, tariffs, export controls, or geopolitical changes may affect China's exports to the U.S.
• Monthly export data are volatile, and a single month of strong growth does not necessarily imply a linear continuation of the trend.

What to watch

• Subsequent China exports of large-power transformers to the U.S. and changes in voltage-level mix.
• Whether U.S. power transformer and switchgear PPI remain elevated.
• The pace of U.S. domestic transformer manufacturers' capacity expansion and its impact on the supply-demand gap.
• The three-month rolling trend in China 220-330MVA transformer export prices to the U.S.
• Whether the strength in switchgear exports can extend from April's acceleration into subsequent months.
• Changes in overseas orders, deliveries, gross margin, and valuations for Sieyuan, NARI Technology, and Huaming.