State Grid Tendering Recovers; Robust UHV Project Pipeline

Overview

This report tracks the latest developments in State Grid’s 2026 second batch of transmission equipment tendering, its first batch of UHV equipment tendering, and year-to-date grid investment. The core conclusion is: grid capital expenditure has begun the year strongly; the UHV equipment tendering pipeline is robust; Nari Tech has significantly benefited from converter valve tendering; and Sieyuan Electric’s performance has diverged across product categories.

Core views

Regarding grid investment, grid investment grew 43% year-on-year in January–March 2026, while power generation investment rose 27% year-on-year—setting a high-activity tone for the full year. After a 28% year-on-year decline in the first batch of conventional transmission equipment tendering, the second batch rebounded by 32% year-on-year, lifting the year-to-date cumulative growth rate to +4%. Growth in primary and secondary equipment was broadly synchronized. UHV equipment tendering is the focal point of this report. The first 2026 UHV tender batch totaled approximately RMB 4 billion—double the amount of the first 2025 batch. An additional ‘first supplemental batch’ followed, valued at RMB 5 billion, concentrated mainly in converter valves. Within this converter valve batch, Nari Tech emerged as the top winner, capturing 52% market share—approximately RMB 2.5 billion—supplying multiple lines including Chongqing–Guizhou, Hunan–Guangdong, Fujian–Jiangxi, and Anhui–Hubei. In the initial RMB 4 billion UHV batch, Sieyuan Electric secured RMB 163 million (including GIS and instrument transformers), while Nari Tech secured RMB 138 million (including measurement devices, secondary equipment, and monitoring systems). Looking ahead, the upcoming second UHV tender batch is expected to exceed RMB 9 billion, supporting lines such as Panzhihua West–Tianfu South (already under construction), Zhejiang Ring Network, Yantai–Weihai, Zhaoyuan Nuclear Power Outgoing, and Dalate–Western Inner Mongolia. The combined value of the three UHV batches is estimated to reach ~80% of the full-year 2025 UHV tendering value—reflecting a strong project pipeline. Two lines have already commenced construction this year (Panzhihua West–Tianfu South and Zhejiang Ring Network); Dalate–Western Inner Mongolia received approval in February 2026 and is expected to begin construction and tendering shortly. Nari Tech’s management also expects 3–4 new UHV lines to receive approval this year, with equipment tendering for 2–3 lines likely to occur. In terms of conventional transmission equipment market share by product category, the report details how Nari Tech and Sieyuan Electric’s shares evolved relative to 2025. Sieyuan Electric gained share in GIS (20% year-to-date vs. 17% in 2025), circuit breakers (23% vs. 18%), and SVC/STATCOM (26% vs. 19%), but lost share in disconnectors (34% vs. 49%), instrument transformers (12% vs. 21%), reactors (6% vs. 8%), arc-suppression coils (21% vs. 25%), and capacitors (17% vs. 19%). Nari Tech maintained its share in relay protection, saw notable gains in network system integration (25% vs. 18%), but experienced a substantial decline in SVC/STATCOM share (25% vs. 48%). This divergence reflects limited incremental room for expansion in mature, highly penetrated segments—leading naturally to uneven bidding outcomes across product categories.

Analysis framework

The report adopts a bottom-up order-tracking methodology, analyzing industry activity and company-specific benefits by disaggregating State Grid’s equipment tendering data across batches and product categories. Its analytical framework proceeds in three layers: First, macro-level capital expenditure data are used to confirm the upward trend in grid investment (year-on-year growth rate); second, at the meso-level, UHV and conventional transmission equipment tendering are separately analyzed—examining both the scale change of individual batches (year-on-year magnitude) and the depth of the cumulative project pipeline (future sustainability); finally, at the micro-level, Nari Tech’s and Sieyuan Electric’s winning bid values and market shares are calculated by product category and compared with prior years to assess where each company is gaining or losing share—yielding qualitative conclusions about specific firms. This hierarchical progression—from ‘aggregate → structure → company’—is typical of order-tracking research reports in the power equipment sector.

Methodology notes

• Industry/Industrial Analysis FrameworkVolume-price decomposition

  Tender tracking for order-driven equipment, implicitly decomposing industry activity into ‘tender volume × winning share × winning price’.

  Although the report does not construct a precise volume-price model, it fundamentally assesses companies’ revenue outlooks by tracking tender value (a composite of volume and price) and winning share—effectively answering the question: ‘How large is the pie, and what slice can the company capture?’

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

  Analyzing equipment procurement along a supply chain anchored by State Grid as the sole core buyer, tracing demand transmission from end-user investment to equipment suppliers’ revenues.

  As the ultimate demand source for transmission equipment, State Grid’s investment growth and tendering cadence serve as leading indicators for upstream equipment manufacturers (e.g., Nari Tech, Sieyuan Electric). This top-down transmission logic is the most fundamental analytical pillar in grid equipment industry research.

• Industry/Industrial Analysis FrameworkIndustry Concentration Analysis

  Tracking competitive landscape evolution within sub-segments using CR5 (concentration ratio of top five players) to assess leading firms’ pricing power and share stability.

  The report provides CR5 data across numerous sub-categories in extensive appendices (e.g., disconnector CR5 reached 94% in 2026), helping illustrate that certain segments are already highly consolidated—making share shifts largely reflect zero-sum competition among incumbent players.

• Industry/Industrial Analysis FrameworkPenetration S-curve

  Inferring future UHV equipment tendering ramp-up timing based on the ‘project-stage advancement’ logic—mapping project pipeline progress to near-to-medium-term tender value.

  By mapping UHV line approval, commencement, and tendering timelines, the report translates the project pipeline into anticipated near-term tender value—essentially gauging the penetration stage of UHV development (from planning to execution) to forecast the slope of equipment demand release.

Asset mapping & comparison

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

• Nari Tech

  Core beneficiary: Captured 52% market share in the newly added UHV converter valve batch, securing approx. RMB 2.5 billion in orders; also maintained or increased share in relay protection and network system integration.

  Strengths

  Strong competitiveness in UHV HVDC core equipment (converter valves); entrenched advantages in relay protection and system integration, with stable or rising market share.

  Weaknesses

  Market share in SVC/STATCOM fell sharply from 48% in 2025 to 25%.

  Comparison

  Compared with Sieyuan Electric, benefits more concentrated in UHV core equipment; however, Sieyuan retains competitiveness in primary equipment categories such as GIS and circuit breakers.

• Sieyuan Electric

  Partial beneficiary: Secured awards in conventional equipment and the first UHV batch; gained share in GIS, circuit breakers, and SVC/STATCOM, but faced pressure in several other categories.

  Strengths

  Increased share in GIS (20% YTD), circuit breakers (23%), and SVC/STATCOM (26%); broad product portfolio.

  Weaknesses

  Lost share in disconnectors (34% vs. 49% in 2025), instrument transformers (12% vs. 21%), and reactors (6% vs. 8%).

  Comparison

  Relative to Nari Tech, benefits less directly from UHV converter valve tendering, but maintains broader coverage across primary equipment categories.

Key data

• Jan–Mar Grid Investment YoY Growth+43%Strong start, significantly outpacing同期 power generation investment growth of 27%
• Second-Batch Transmission Equipment Tendering YoY+32%Recovering from first-batch decline of -28%; YTD cumulative growth now +4%
• First UHV Tender Batch ValueApprox. RMB 4 billionDoubled YoY; Sieyuan secured RMB 163 million, Nari Tech secured RMB 138 million
• First Additional UHV Tender Batch (Converter Valves)Approx. RMB 5 billionNari Tech captured 52% share, equivalent to approx. RMB 2.5 billion
• Expected Second UHV Tender BatchOver RMB 9 billionCombined value of three batches expected to reach ~80% of full-year 2025 UHV tendering; pipeline remains robust

Impact & implications

The report concludes that the robust grid investment and UHV tendering data constitute a clear positive signal for Nari Tech—particularly its outsized win in the converter valve supplemental batch, which underscores its competitiveness in high-end HVDC core equipment. While Sieyuan Electric gained share in select categories, its overall performance was mixed, reflecting limited headroom for further major share gains in already highly penetrated segments. For the broader industry, the accelerated pace of UHV tendering signals that domestic transmission equipment demand will remain elevated over the next one to two years—especially given the substantial number of reserve lines awaiting approval and commencement, implying continued upside potential for future tender volumes.

Risks

• Slower-than-expected approval of subsequent UHV lines could lead to tender volumes falling short of forecasts.
• Continued market share erosion for Nari Tech and Sieyuan Electric in certain sub-categories may indicate intensifying competition.

What to watch

• The announced value and detailed award list of the upcoming second UHV tender batch, to validate the >RMB 9 billion forecast.
• Construction launch and related tendering progress for the Dalate–Western Inner Mongolia line.
• Approval updates for the 3–4 additional UHV lines expected to be approved this year.