Zhongjin: The power grid and engineering industries are stable and heading upwards, focusing on structural opportunities.

CICC released a research report stating that the overall performance of the power grid and industrial control industries in 2025 is stable and upward, with a focus on structural opportunities. In terms of the power grid, domestic power grid investment prosperity continues, and ultra-high-voltage projects are entering an accelerated phase of approval and bidding in the second half of the year. CICC believes that the power grid is a new energy investment in the later cycle, and there is still a large investment gap waiting to be filled. It is optimistic about the continued prosperity of power grid investment. As for industrial control, the overall cycle remains unchanged and is currently in an endogenous repair phase. Looking ahead to next year, CICC believes that demand is expected to continue to grow steadily. In addition, CICC emphasizes two high-elasticity investment directions, focusing on AIDC and overseas expansion. Key points of CICC are as follows: Power Grid: Continued prosperity in the "14th Five-Year Plan" period. We expect the annual growth rate of national power grid engineering investment in the "14th Five-Year Plan" period to exceed 5%. We are optimistic about 1) the construction of ultra-high-voltage projects maintaining high intensity under the demand for wind-solar bases and hydropower export, 2) main grid investment remaining high; 3) long-term optimism about smart grid upgrade and transformation. Industrial Control: Overall demand is stable, and we continue to be optimistic about structural growth market opportunities. From the perspective of demand and inventory, the market is showing a moderate recovery; the high increase in demand for energy storage and other new energy industries this year has driven OEM rebounds. Looking ahead to next year, we believe that structural growth will remain the main driver of the current market. AIDC: Optimistic about high-slope directions such as strong and weak side power supplies. On the strong power side, the trend of upgrading power density to 800V DC power supply is clear. We are optimistic about the penetration rate of HVDC/Panama power/SST gradually increasing, and we are paying attention to the progress of leading manufacturers with technology and channel advantages. On the weak power side, we are optimistic that the continuous upgrading and iteration of server power supplies will significantly increase product ASP, and power supply manufacturers are expected to continue to benefit from changes in Power Rack. Overseas Expansion: Seize the opportunity of exporting power equipment in the global electricity boom cycle. We believe that in the context of load growth, retirement of coal and nuclear power plants, and increased proportion of wind and solar power, the global risk of power shortage is rising, and the world is experiencing a boom in electricity investment. China's transformer exports have increased significantly this year. We continue to be optimistic about the overseas expansion of China's power equipment enterprises, with profit elasticity being released; opportunities for breakthroughs in overseas expansion in the gas turbine and SOFC industry chains. Risks Failure to meet expectations in power grid investment; macroeconomic fluctuations; slower than expected development pace of emerging industries; risks of changes in international trade policies and exchange rate fluctuations.