China's grid investment and UHV projects get off to a strong start; tender concentration rises

Overview

This report updates China grid investment and tendering conditions in 1Q26. The key conclusion is that grid investment and UHV projects started strongly, and the 15th FYP project pipeline is supported; however, the first batch of power transmission and transformation equipment tenders was weak, so subsequent five tender batches need to be tracked to determine whether equipment demand is recovering.

Core views

Goldman Sachs believes that strong growth in grid investment and UHV tenders is a positive signal for China's grid technology and power equipment supply chain; meanwhile, tender share continues to concentrate in leading companies, with Sieyuan, Pinggao, and XD standing out in key equipment categories. Negative or yet-to-be-confirmed factors are that the first batch of power transmission and transformation equipment tenders declined y/y, and Nari Tech's share performance diverged across business lines.

Analysis framework

The report mainly compares State Grid power transmission and transformation equipment tender batches, UHV project progress, winning shares by equipment category, and company competitive positions to judge industry demand strength and changes in leader concentration.

Methodology notes

• Industry demand trackingGrid investment and tender batch analysis

  Short-term demand is measured by y/y growth in grid investment, UHV tender amount, and y/y changes in batch tenders for power transmission and transformation equipment.

  The report compares data to date in 2026 with the same period or same batch in 2025 to distinguish demand dimensions such as grid investment, UHV equipment, primary equipment, and secondary equipment.

• Competitive landscape analysisTender share and concentration analysis

  Changes in winning market share across equipment categories are used to identify share gainers and concentration trends.

  The report focuses on share changes among leading companies in categories such as GIS, disconnectors, circuit breakers, transformers, protective relays, network system integrators, and SVC/STATCOM.

Asset mapping & comparison

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

• Sieyuan

  Power equipment company benefiting from higher tender share

  Strengths

  30% GIS share and 52% disconnector share, both ranked first year-to-date in 2026.

  Weaknesses

  The excerpt does not disclose its performance in other categories or any earnings impact.

  Comparison

  Compared with other competitors, Sieyuan stands out in both GIS and disconnector categories.

  Risks

  If power transmission and transformation equipment tenders remain weak, share gains may not be enough to offset industry demand volatility.

• Pinggao

  Share gainer in circuit breakers

  Strengths

  Circuit breaker market share rose to 24%.

  Weaknesses

  The excerpt does not provide its share in other equipment categories.

  Comparison

  Relatively benefited in the circuit breaker category.

  Risks

  Demand recovery still depends on subsequent State Grid tender batches.

• XD

  Share gainer in transformers

  Strengths

  Transformer market share rose from 8% in 2025 to 20% year-to-date in 2026.

  Weaknesses

  The excerpt does not disclose conditions in other business lines.

  Comparison

  The improvement in transformer share is fairly significant.

  Risks

  If overall power transmission and transformation equipment tenders remain weak, revenue recognition could be affected.

• Nari Tech

  Secondary-equipment-related company with mixed business performance

  Strengths

  Protective relay share increased.

  Weaknesses

  Network system integrator and SVC/STATCOM shares declined.

  Comparison

  Compared with some equipment companies that saw broad-based share gains, Nari Tech's tender performance was more mixed.

  Risks

  Declining share in key business lines may affect order mix and market expectations.

Key data

• Grid investment growth in Jan-Feb 202680% yoyThe report says China's grid investment got off to a strong start at the beginning of the year.
• Power generation investment growth in Jan-Feb 202632% yoyTogether with grid investment, this indicates a relatively strong start for power investment.
• First batch of UHV equipment tenders in 2026Rmb4bnDoubled versus the first batch in 2025.
• State Grid first-batch power transmission and transformation equipment tender growth-28% yoyThe report views this as relatively weak and says the next five batches need to be monitored.
• Primary equipment tender growth-30% yoyWeaker than secondary equipment.
• Secondary equipment tender growth-3% yoyRelatively stronger than primary equipment.
• Sieyuan GIS market share30%Ranked first year-to-date in 2026.
• Sieyuan disconnector market share52%Ranked first year-to-date in 2026.
• Pinggao circuit breaker market share24%The report says Pinggao's share rose in the circuit breaker category.
• XD transformer market share20% in 2026 ytd vs 8% in 2025Share in the transformer category improved significantly.

Impact & implications

For investors, UHV project approvals and starts, the doubling of first-batch tenders, and a stronger 15th FYP project pipeline support the medium- to long-term outlook for grid equipment; however, the y/y decline in power transmission and transformation equipment tenders means the near-term order pace remains uncertain. Rising tender concentration may benefit leading companies that are expanding share in core equipment categories.

Risks

• The first batch of power transmission and transformation equipment tenders fell 28% y/y, which may indicate weak short-term equipment demand.
• Primary equipment tenders fell 30% y/y, weaker than secondary equipment.
• The report explicitly states that the next five tender batches still need to be observed, so the current sample is not sufficient to fully confirm full-year demand strength.
• Some companies show divergent tender-share performance, for example Nari Tech improved in protective relays but declined in network system integrators and SVC/STATCOM.
• There is a time lag from UHV project approval and construction to equipment orders and revenue recognition.

What to watch

• The size and y/y changes of State Grid's subsequent five power transmission and transformation equipment tender batches.
• UHV line approvals, construction, and equipment tender pace, especially progress on projects such as North China-Mongolia West and Panxi-Tianfu South.
• Whether leading companies such as Sieyuan, Pinggao, XD, and Nari Tech continue to gain share in key equipment categories.
• Whether the growth gap between primary and secondary equipment tenders narrows.
• Whether the 15th FYP UHV project pipeline continues to materialize.