CITIC Securities: High-voltage and smart grid sectors are expected to see a reversal in prosperity.

CITIC Securities research report stated that the "Suggestions of the CPC Central Committee on Formulating the 15th Five-Year Plan for National Economic and Social Development" further clarifies the important position of the new energy system, and guides the long-term development focus of absorption, resilience, electrification, and other aspects in the construction of the electric power system. We believe that the policy further guides and solidifies the medium- to long-term opportunities in ultra-high voltage, flexible DC transmission and distribution, and digitized power grids. At the same time, in the short to medium term, there is resonance between the inside and outside demand of transmission and transformation equipment, and structural demand continues to be evident, ultra-high voltage, smart grids and other aspects are expected to see an upturn in demand. It is recommended to focus on segments that resonate with long-term development goals and short-term business sentiment: 1) transmission and transformation equipment and leading companies in the offshore sector; 2) core companies in ultra-high voltage; 3) leading enterprises in smart meters; 4) core companies in the industry chain related to DC transmission and distribution technologies.