Wasion Holdings Maintains Overweight as Data Center and U.S. Businesses Strengthen Growth Optionality

Overview

This report is JPMorgan's company research conference note on Wasion Holdings Ltd - H (3393.HK) following the Global China Conference. The core conclusion is that the company's growth drivers remain intact, with data center business, domestic meter business, and U.S. market expansion jointly supporting earnings growth; despite a recent share price pullback due to sector weakness, valuation remains attractive.

Core views

First, data center orders are growing strongly, and revenue this year could triple, with order visibility extending into 2028-29. Second, domestic meter business is recovering in both volume and price under the new standards, and the relay subsidiary has nationwide certification qualifications and is lowering costs through vertical integration. Third, the U.S. market offers significant opportunity: transformers have obtained UL certification and won orders, meter certification is expected to be completed by mid-year, and management believes U.S. meter ASP can exceed that of other regions by more than three times. Fourth, management guided for FY26E revenue growth of 20% and profit growth of more than 30%, indicating that growth momentum across multiple business lines remains strong.

Analysis framework

The report uses a combination of management discussion takeaways from the conference, growth guidance by business segment, order and certification progress, peer and segment valuation, to assess Wasion Holdings' earnings drivers and support for its target price. The valuation section applies an SOTP framework, combining EPS contributions, 2027E P/E multiples, and NAV/sh for segments such as Power AMI, C&F AMI, and ADO to derive per-share NAV.

Methodology notes

• Valuation methodsSOTP valuation

  sum-of-the-parts valuation

  The report discloses Wasion's SOTP valuation table, estimating NAV/sh for Power AMI, C&F AMI, and ADO separately using 2027E P/E multiples and then summing them to arrive at HK$35/sh.

• fundamental_analysismanagement meeting takeaways

  management discussion notes

  The report mainly forms its investment view based on business trends, orders, certifications, and revenue and profit guidance from discussions with management at the China conference.

• earnings_drivergrowth driver analysis

  multi-growth-driver analysis

  The report identifies data centers, new domestic meter standards, overseas meters, and U.S. distribution equipment expansion as the main sources of future earnings growth.

Asset mapping & comparison

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

• Wasion Holdings Ltd - H (3393.HK)

  core coverage name

  Strengths

  Data center revenue may grow rapidly, with order visibility through 2028-29; domestic meter business is seeing a volume and price recovery; relay vertical integration brings cost advantages; and U.S. market ASP and gross margin are higher.

  Weaknesses

  The traditional meter business remains cyclical, and part of the growth depends on AIDC and overseas expansion being realized.

  Comparison

  The report says 1Q26 meter GPM was around 35%, above A-share peers; the stock trades at below 15x FY27E P/E, and valuation has yet to reflect the AIDC tailwinds.

  Risks

  Domestic meter business turnaround slower than expected, AIDC business development and market share gains slower than expected, exchange rate risk, and receivables risk.

• Willfar Information (688100.SS)

  related A-share entity / mentioned in tender data

  Strengths

  The report mentions 30% y/y growth in grid tender wins, including Willfar Information.

  Weaknesses

  The report does not provide separate earnings, valuation, or rating judgments for this entity.

  Comparison

  It is mentioned as part of the tender growth metric and is not the main valuation object of this report.

  Risks

  Lack of separate disclosure means no independent investment conclusion can be drawn from this report.

• Asia Power Equipment space

  industry comparison framework

  Strengths

  Grid upgrades, AIDC construction, and overseas power equipment demand together support the sector opportunity.

  Weaknesses

  The sector has been broadly weak recently, which may weigh on valuation performance.

  Comparison

  JPMorgan says Wasion Holdings is one of the preferred names in the Asian power equipment sector.

  Risks

  Industry demand, order delivery, certification progress, and macro risks may affect valuation.

Key data

• Target PriceHK$35.00The target price is for Dec-26.
• RatingOverweightJPMorgan says Wasion is one of the top picks in the Asian power equipment sector.
• Historical PriceHK$27.24The chart shows an OW rating on 2026-02-26, price of HK$27.24, and target price of HK$35.
• FY27E P/E<15xThe report believes the current share price does not reflect the AIDC tailwinds.
• Data center revenuecould triple this yearOrder visibility extends into 2028-29.
• FY26E revenue guidance+20%Management guidance.
• FY26E profit guidance+30%+Management guidance.
• Digital Energy Services FY26E guidance+60%+Segment revenue growth guidance.
• Smart Grid Solutions FY26E guidance+15-20%Segment revenue growth guidance.
• AI-Integrated Energy Efficiency Solutions FY26E guidance+15%+Segment revenue growth guidance.
• 1Q26 meter GPMaround 35%Higher than A-share peers.
• Full-year 2025 meter margin41%The report says full-year meter margin should remain stable.
• Grid tender win growth+30% yoyIncluding Willfar Information (688100 CH); growth would be even higher if regional utility company orders are included.
• FY26E overseas meter growth guidance25-30%FY27-28E growth is expected to remain above 20%.
• U.S. meter ASP>3x other regionsManagement believes the U.S. market has higher ASP and gross margin.
• SOTP Power AMINAV/sh HK$13, 37%EPS contribution of Rmb0.77/sh, with 2027E P/E of 15x.
• SOTP C&F AMINAV/sh HK$10, 29%EPS contribution of Rmb0.45/sh, with 2027E P/E of 20x.
• SOTP ADONAV/sh HK$12, 34%EPS contribution of Rmb0.30/sh, with 2027E P/E of 35x.
• SOTP totalNAV/sh HK$35, 100%EPS contribution of Rmb1.52/sh, with 2027E P/E of 20x.

Impact & implications

The report is moderately positive for Wasion Holdings: if data center orders, U.S. certification and deliveries, and domestic new-standard meter demand all proceed in line with management guidance, the company's earnings growth may continue to outpace its traditional cyclical meter profile, and valuation may also gain support from exposure to power equipment and AIDC. For investors, the key focus is on AIDC order conversion, the pace of U.S. business certification and delivery, and whether the volume and price recovery in domestic grid tenders can continue.

Risks

• China power meter business turnaround slower than expected.
• AIDC business development and market share gains slower than expected.
• Foreign exchange risk.
• Receivables risk.
• U.S. meter UL certification or initial year-end deliveries fall short of expectations.
• Continued sector weakness may keep pressuring share price performance.

What to watch

• Whether data center revenue achieves roughly triple growth this year as management expects.
• Whether data center order visibility continues to extend into 2028-29.
• Whether U.S. meter UL certification is completed by mid-year as expected.
• Whether U.S. transformer orders and initial meter deliveries at year-end are realized.
• Whether the volume and price recovery in domestic new-standard meter tenders can continue.
• Whether external sales revenue from the relay subsidiary becomes an additional contribution.
• Whether the FY26E revenue growth of 20% and profit growth of more than 30% guidance is achieved.
• R&D and commercialization progress of AIDC-related products such as CDU, HVDC, and SST.