Nomura Initiates Coverage on Jinpan Intelligent: AI Data Centers Drive High Growth, Assigns Buy Rating

Overview

Nomura Orient International Securities has published its inaugural research report on Jinpan Intelligent Technology (688676.SH), assigning a Buy rating and a target price of RMB 121.55. The report argues that Jinpan Intelligent stands to benefit significantly from accelerating global AI data center construction and persistent tightness in the power equipment market. Leveraging its focus on transformers, integrated electrical equipment, energy storage products, and overseas production capacity, the company is well-positioned to capitalize on these trends. New orders signed in Q1 2026 surged 64.5% year-on-year, validating strong market momentum. The firm forecasts a 40% CAGR in net profit over the next three years, and views the company’s current valuation as attractive.

Core views

AI data centers have become the core growth driver. Jinpan Intelligent has made significant progress in AI data center-related products: its data center segment generated RMB 1.34 billion in revenue in 2025, up 196.8% year-on-year, and has emerged as a key growth engine. In 2026, the company will continue launching new power transmission and distribution products tailored for AI data centers and upgrading its core solid-state transformer technology to further strengthen its competitive position. Overseas exports enter an opportunity period. Global power equipment markets are expected to remain tight through 2026; customers seeking to mitigate supply chain risks are shifting procurement toward Chinese alternatives—creating incremental demand for Jinpan Intelligent. With manufacturing bases in China and Malaysia, the company possesses strong delivery capability and supply chain resilience, enabling it to effectively capture overseas demand. In Q1 2026, new orders signed reached RMB 3.34 billion, up 64.5% year-on-year, demonstrating robust order acquisition capacity. Financial forecasts and valuation. Based on expectations of strong global demand for power equipment and enhanced profitability from high-value AI data center products, Nomura forecasts 27% and 40% CAGRs for revenue and net profit, respectively, for 2026–2028. Gross margin is projected to rise from 25.9% in 2025 to 27.5% in 2028. Nomura’s earnings forecasts are more optimistic than Wind’s consensus estimates, primarily reflecting recognition of the company’s overseas data center customer base and product certification advantages.

Analysis framework

Nomura employs a relative valuation approach (P/E) to value Jinpan Intelligent. The firm selects domestic peers actively expanding overseas and involved in AI data center products—including Sieyuan Electric, Egger, Zhongheng Electric, and Sifang Co., Ltd.—as comparables. These peers’ average forecast P/E ratio for 2026 is 63x. Given Jinpan Intelligent’s forecast EPS growth rate (40%) is slightly below the peer group average (49%), Nomura assigns a 55x target P/E ratio for 2026—a modest discount to the peer average. Applying this multiple to the forecast 2026 EPS of RMB 2.21 yields a target price of RMB 121.55.

Methodology notes

• Valuation MethodPE/PEG valuation

  Relative valuation using price-to-earnings (P/E) multiples, adjusted for growth expectations via premium or discount

  The report compares the company’s P/E ratio with those of industry peers and applies a premium or discount based on whether its expected earnings growth rate (EPS CAGR) is faster or slower than the peer group average. In this case, a modest discount is applied due to the company’s slightly lower growth forecast relative to peers.

• Industry / Sector Analysis FrameworkSupply-demand framework

  Tight supply-demand conditions in the global power equipment market

  The report highlights that the global power equipment market will remain supply-constrained through 2026. This supply-side constraint, combined with robust demand drivers (e.g., AI data centers, grid upgrades), forms the core rationale for sector strength and enables leading players with strong delivery capacity to secure outsized order volumes.

• Company Fundamentals & Financial Framework

  Analysis of orders as a leading indicator of performance

  The report emphasizes ‘new orders signed’ (e.g., +64.5% YoY in Q1) as a leading indicator of future revenue and profit growth. In manufacturing, accelerating order intake often signals earnings realization in subsequent quarters.

Asset mapping & comparison

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

• Jinpan Intelligent (688676.SH)

  Direct beneficiary: Surging demand for AI data center transformers and energy storage products; accelerated overseas exports

  Strengths

  Early positioning in AI data center products; overseas manufacturing bases (e.g., Malaysia); resilient supply chain

  Weaknesses

  Slightly lower earnings growth forecast versus peer average constrains valuation multiple

  Comparison

  Compared to peers such as Sieyuan Electric, Jinpan has a more precise focus within the data center niche but operates at a smaller overall scale

  Risks

  Orders fall short of expectations; overseas expansion encounters obstacles; emerging business development lags

Key data

• Q1 2026 New Orders SignedRMB 3.34 billionUp 64.5% year-on-year
• 2025 Data Center RevenueRMB 1.34 billionUp 196.8% year-on-year
• 2026–2028E Net Profit CAGR40%Nomura forecast
• 2026E EPSRMB 2.21Basis for valuation calculation
• Target P/E Ratio (2026E)55xBelow peer average of 63x, reflecting growth differential

Impact & implications

The report concludes that Jinpan Intelligent is at a critical inflection point—transitioning from a traditional power equipment manufacturer to a high-end supplier of AI data center infrastructure. The surge in AI data center demand not only extends the company’s growth runway but also enhances overall profitability through higher-margin products. For investors, the focus should shift from domestic grid investment alone to the allocation of benefits arising from global AI compute infrastructure build-out. Jinpan Intelligent’s overseas footprint positions it among the few Chinese power equipment firms capable of directly benefiting from global supply chain restructuring.

Risks

• Orders miss expectations: Power equipment remains the core business; weak order intake would directly impair financial performance
• Overseas expansion proceeds slower than anticipated: Exposure to trade friction, shifts in industrial policy, and evolving competitive dynamics
• Emerging businesses underperform: Market expectations for AI data center new products are high; delays in R&D or commercialization could suppress valuation

What to watch

• Better-than-expected orders related to AI data centers
• Potential tailwinds from Chinese government policies aimed at reducing 'internal competition' in the energy storage sector
• R&D progress and commercial rollout of core technologies such as solid-state transformers