Asia Power Equipment: AI Electricity Use and Energy Transition Drive Grid Investment, with India and Korea More Favored
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Asia Power Equipment: AI Electricity Use and Energy Transition Drive Grid Investment, with India and Korea More Favored
J.P. Morgan believes that power equipment demand in China, India, and South Korea is supported by growing electricity needs, renewable energy grid integration, and tight global high-voltage equipment supply, though Indian valuations are elevated, Korean orders remain robust, and short-term catalysts in China have weakened.
- Over the past two weeks, discussions with more than 50 clients indicate continued strong investor interest in Asian power equipment, primarily driven by AI-related power infrastructure demand and regional energy transition initiatives.
- Indian power equipment receives the most attention, owing to relatively light long-term foreign holdings, scarce new supply-chain ideas, and Indian manufacturers' combination of parent-company international branding, low-cost manufacturing, and solid earnings visibility.
- Korean stocks are already heavily held, yet investors remain bullish, thanks to Q1 new orders more than doubling quarter-over-quarter, high regulatory barriers in the U.S. utility market, and attractive ASPs.
- Interest in Chinese equities has waned following weaker-than-expected Q1 earnings and recent lack of near-term catalysts, though exports and UHV investments remain significant structural opportunities.
- The report's top picks include POWERIND, GVTD, Hyosung Heavy, Wasion Holdings, and Huaming Equipment.
Report interpretation
Overview
This report compares core similarities and investor debates across the power equipment sectors of India, China, and South Korea. It argues that all three regions benefit from structural increases in electricity demand, rising renewable energy penetration, grid modernization, and tight global supplies of high-voltage equipment. India and China share similar trends—around 5% annual compound growth in electricity demand and 8–10% annual compound growth in grid capital expenditures—while South Korea maintains an edge through its access to the U.S. regulated utility market and high entry barriers.
Core views
Key takeaways include: First, India's power equipment story best captures incremental investor attention, though its 60x+ CY27 P/E valuation suggests waiting for better entry points; second, both China and India plan to ramp up grid investments, with State Grid targeting at least Rmb 4tn during the 15th Five-Year Plan and India projecting roughly $85bn in transmission investment over the next decade; third, HVDC/UHV represents a critical investment opportunity, with China potentially building over 20 DC UHV projects and India developing approximately 80GW of RE-export-related HVDC pipeline by FY36; fourth, capacity expansions in China and India are unlikely to significantly threaten Korean firms' market share in the U.S. regulated sector, given certification cycles, national security concerns, and customer preferences; fifth, exports will continue to serve as a major growth engine for Chinese and Indian power equipment companies.
Analysis framework
Drawing on client roadshow feedback, regional electricity demand and renewable energy installation forecasts, grid capital expenditure plans, HVDC project pipelines, order backlogs, valuation comparisons, and export revenue structures, this report conducts a cross-regional comparison of power equipment firms in India, China, and South Korea.
Methodology notes
Demand growth, energy transition, grid capex, HVDC orders, and export opportunities collectively determine the growth visibility of power equipment companies.
The report places China, India, and South Korea within a unified supply-and-demand framework: on the demand side, it considers electricity consumption, AI/AIDC power usage, and renewable energy grid integration; on the supply side, it evaluates high-voltage equipment production capacity, costs, certification barriers, and export channels.
A promising sector does not necessarily translate into favorable entry points; valuation, positioning, and short-term catalysts dictate trading rhythms.
India's long-term narrative is acknowledged but its valuation remains expensive; Korea is widely held yet still supported by strong orders and U.S. market dynamics; China offers attractive valuations and export prospects, though short-term earnings and catalysts appear weaker.
Order books and TTM revenue multiples help gauge future revenue visibility.
POWERIND and GVTD boast OB/TTM revenue multiples of approximately 4.1x and 4.3x, respectively, compared to ENRIN's 2.1x, largely driven by HVDC order contributions.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- POWERINDCore beneficiary of India's HVDC and transmission equipment sectors
- Strengths
- Rs299bn order book, OB/TTM revenue multiple of 4.1x, large HVDC orders, strong local presence combined with Hitachi's global expertise.
- Weaknesses
- High valuation; some investors worry about HVDC execution and margin dilution.
- Comparison
- From an HVDC perspective, the report favors Hitachi Energy India, citing superior execution track record, global footprint, and localized capabilities compared to peers.
- Risks
- Middle East disruptions, import pressures on raw materials and components, freight volatility, and potential sell-the-news effects following Barmer HVDC orders.
- GVTDBeneficiary of India's transmission and HVDC opportunities
- Strengths
- Rs244bn order book, OB/TTM revenue multiple of 4.3x, 26.1% TTM EBITDA margin, strong export orientation.
- Weaknesses
- Compared to POWERIND, HVDC execution and localization advantages may be less pronounced.
- Comparison
- Investors expect India to maintain a dual-supplier setup for HVDC-LCC, so GVTD's incremental share could approach that of POWERIND.
- Risks
- Valuation, pace of HVDC projects, and global capacity expansion pressure on pricing.
- ENRINBeneficiary of India's basic power equipment and export opportunities
- Strengths
- Discounted valuation, approximately 40% of transmission revenue coming from exports, planned transformer capacity expansion from 15GVA to 30GVA, with further greenfield expansion to 30GVA.
- Weaknesses
- OB/TTM revenue multiple of only 2.1x, lower than POWERIND and GVTD; limited HVDC-LCC participation, relying more on foundational orders.
- Comparison
- While ENRIN demonstrates good execution, its HVDC purity and order coverage lag behind those of POWERIND and GVTD.
- Risks
- Potential delays in generating additional orders, uncertainty surrounding execution and export demand rhythms.
- Hyosung HeavyBeneficiary of South Korea's high-voltage power equipment and U.S. regulated market
- Strengths
- Strong order backlog and growth outlook, particularly oriented toward U.S. regulated utilities where high barriers exist.
- Weaknesses
- Already heavily held by global investors; some valuations reflect optimistic expectations.
- Comparison
- Compared to Chinese and Indian firms, Korean companies enjoy certification, national security, and customer relationship advantages in the U.S. regulated utility market.
- Risks
- If U.S. order growth slows or valuations adjust downward, profit-taking may occur.
- Wasion HoldingsBeneficiary of China's power equipment exports
- Strengths
- Overseas revenue accounting for approximately 30%+, benefiting from tight global supply of grid equipment and diversified utility suppliers.
- Weaknesses
- Entirely affected by weaker-than-expected Q1 earnings and lack of near-term catalysts.
- Comparison
- Similar to Wasion, Huaming Equipment also benefits from global supply constraints, yet penetration into mature markets like the U.S. and Europe remains challenging.
- Risks
- Geopolitical tensions, trade restrictions, overseas certifications, and customer acceptance issues.
- Huaming EquipmentBeneficiary of China's transformers and export chain
- Strengths
- Overseas revenue accounting for approximately 30%+, with Chinese transformer exports achieving over 30% CAGR since 2023.
- Weaknesses
- Short-term market interest has declined due to underwhelming corporate earnings.
- Comparison
- Like Wasion, Huaming benefits from global supply tightness, yet struggles to penetrate highly regulated developed markets.
- Risks
- Geopolitical factors, trade restrictions, overseas certifications, and customer acceptance challenges.
Key data
- Number of Client Conversations50+ clientsFeedback gathered from Asian power equipment roadshows over the past two weeks.
- China's Electricity Demand ForecastApproximately 5% CAGR through 2030EDriven by economic expansion and electrification across transportation, industry, and other sectors.
- China's Wind and Solar Installed Capacity ForecastExpected to grow from about 1,840GW in 2025E to roughly 3,400GW by 2030ERenewables are projected to increase their share of total installed capacity from around 47% to 60%.
- India's Peak Electricity Demand ForecastAround 5% CAGR through FY36Annual peak demand expected to rise by approximately 20GW, with a target of adding roughly 60GW of new generation capacity each year.
- China's Grid Investment PlanAt least Rmb 4tn during the 15th Five-Year PlanAn approximate 40% increase, with 8–10% annual compound growth, covering UHV, energy storage, distribution digitalization, and domestic component localization.
- India's Transmission Investment PlanApproximately $85bn over the next decadeAbout $8–9bn per year, focused on supporting renewable energy exports and constructing high-voltage transmission infrastructure.
- India's HVDC Project OpportunitiesApproximately 80GW of RE-export-related HVDC pipeline, with potential orders worth $10–15bn or $14–15bnLCC technology opportunities primarily favor Hitachi Energy India and GE Vernova T&D India.
- India's Major Order BooksPOWERIND Rs299bn, GVTD Rs244bn, ENRIN Rs176bnPOWERIND and GVTD hold two and one large HVDC orders, respectively.
- Order Book/TTM Revenue MultiplesPOWERIND 4.1x, GVTD 4.3x, ENRIN 2.1xMultiples around 4x suggest support for over 30% revenue growth over the next three years.
- China's Transformer ExportsGrew by 35% in 2025, with Q1 2026 showing approximately 40% growthReflects strong overseas demand amid an upward cycle in global grid investment.
Impact & implications
For investors, Asian power equipment remains a central theme linking energy transition, AI-driven electricity use, and grid modernization. India offers the highest growth visibility and HVDC options, though valuation and short-term supply-chain disruptions may affect entry timing; Korea benefits from the U.S. regulated market and backlog of orders, with reports suggesting that risks of being displaced by China and India are overstated; China shows weaker short-term sentiment, yet UHV investment, exports, and low-cost manufacturing continue to provide structural opportunities.
Risks
- Indian power equipment valuations are elevated, with CY27 P/E ratios exceeding 60x, potentially limiting short-term upside.
- Supply-chain disruptions related to the Middle East, freight volatility, and raw material shortages could impact Indian firms' June/Sept-Q performance and margins.
- HVDC project execution might dilute profit margins, while significant global and Indian transformer capacity expansions could suppress future pricing.
- Barmer HVDC project implementation may trigger sell-the-news events, leaving uncertainty regarding subsequent HVDC pipeline confirmation schedules.
- Chinese firms' Q1 earnings falling short of expectations and recent lack of near-term catalysts may continue to dampen investor interest.
- Geopolitical and national security concerns could restrict Chinese and Indian firms' access to the U.S. regulated utility market.
What to watch
- The allocation of shares between the two parties involved in India's Barmer HVDC project, along with the confirmation rhythm of subsequent HVDC pipeline projects.
- The quarterly order inflow, revenue execution, and margin trends of POWERIND, GVTD, and ENRIN over the coming quarters.
- The impact of imported components, raw material supplies, and freight fluctuations on Indian firms' June/Sept-Q results.
- Progress in approving DC UHV projects under China's 15th Five-Year Plan, State Grid's annual UHV capex, and the adoption of flexible transmission technologies.
- The growth rate of Chinese transformer exports, penetration into private U.S./European markets, and changes in access to regulated markets.
- The progress of order backlogs, ASPs, and capacity expansions among Korean firms such as Hyundai Electric and Hyosung Heavy.