Zhongjin: New energy enters the market comprehensively, and the pace of grid construction is accelerating in January and February.

CICC released a research report stating that according to the State Grid, the company entered a peak period of resumption of work and production by the end of February. As of February 18th, more than 1000 projects of 35kV and above transmission and transformation projects have started. In February, the National Development and Reform Commission and the Energy Bureau issued a notice to promote the comprehensive entry of new energy into the market, and the Mongolia-West spot market turned positive on February 24th. Continued optimism for the accelerated development of new power systems, the increasing investment enthusiasm of domestic power grids, it is recommended to pay attention to Sieyuan Electric (002028.SZ), Henan Pinggao Electric (600312.SH), Xj Electric Co., Ltd. (000400.SZ), NARI Technology (600406.SH), China XD Electric (601179.SH). Key points from CICC are as follows: The southern and northern power grids have positive attitudes, and power grid investments remain at a high level. The State Grid announced that the investment in power grids by 2025 will exceed 650 billion yuan for the first time, focusing on optimizing the main power grid, strengthening the distribution grid, and serving the high-quality development of new energy, continuing to promote the implementation of major projects; South China Grid will invest 17.5 billion yuan in fixed assets by 2025, reaching a new historical high. CICC predicts that the CAGR of national power grid engineering investment from 2025 to 2026 is expected to be around 10%. Ultra-high voltage projects accelerate, with strong demand for ultra-high voltage. 1) Ultra-high voltage: Driven by the demand for large-scale new energy bases to transmit power, the approval and start of ultra-high voltage projects have peaked in recent years, and it is expected that by 2025 as the final year of the "14th Five-Year Plan", "Five straight four cross" projects will be approved. State Grid has announced the bidding results for the Datong-Tianjin South project equipment in 2025, and issued bids for the Yanwei project and the Pingwei Power Plant project. 2) Non ultra-high voltage main grid: In 2025, State Grid's first batch of transformer equipment bidding amount reached 15.2 billion yuan, up 23.5% year-on-year, the highest value of transformer equipment bidding amount since 2020. The construction demand for the backbone ultra-high voltage grids in the northwest has significantly accelerated, with bidding quantities for 750kV transformers/combiner apparatus up by 159%/147% year-on-year. New energy enters the market comprehensively, with the construction of the spot market accelerating. In February 2025, the National Development and Reform Commission and the Energy Bureau jointly issued a notice on deepening the marketization reform of the new energy grid electricity price to promote the high-quality development of new energy, promoting the comprehensive entry of new energy into the market, which may affect the enthusiasm for new energy investment in the short term. However, assets with market understanding and trading capabilities have long-term investment value, and will also lay the foundation for the construction of a national unified electricity market in the next steps. The Mongolia-West spot market officially started operation on February 27th, becoming the 5th electricity spot market in China to start operation. It is expected that the construction of electricity spot markets in various regions will accelerate in 2025, benefiting new energy power forecasting and electricity trading software service providers. Risk factors: New energy installations are lower than expected, power grid investment is lower than expected, and macro policy environment impacts.