Against the backdrop of energy transition, the rapid growth of global renewable energy installations, coupled with the replacement and upgrading of power grid equipment, has led to a stable increase in global power grid construction investment. China's power equipment products have technological and cost advantages, making them highly competitive, and their penetration rate in overseas markets is expected to continue to rise. Products such as transformers, meters, switches, and cables are expected to continue benefiting from exports. Among them, the export value of transformers (>16kVA) has been steadily increasing. Looking at the regions of destination, China's transformer exports to Asia and Europe have increased month-on-month, while exports to Africa, North America, and Latin America have declined. Notably, the Asian market is highly prosperous, with export volumes reaching a new high for this year, and the European market has been stable, with export volumes being close in the past three months.

Transformers (>16kVA): Export value steadily increases, with high prosperity in the Asian market

In September 2024, China's transformer export value was 3.355 billion yuan, a month-on-month increase of 12.55%, and a year-on-year increase of 31.06%. From January to September 2024, China's cumulative transformer export value was 22.971 billion yuan, a year-on-year increase of 46.34%, maintaining steady growth.

Looking at the regions of destination, China's transformer exports to Asia and Europe increased month-on-month, while exports to Africa, North America, and Latin America declined. The Asian market is highly prosperous, with export volumes reaching a new high for this year, and the European market has been stable, with export volumes being close in the past three months. In September 2024, China's transformer export value to Asia and Europe were 1.794 billion and 685 million yuan, respectively, with month-on-month increases of 47.23% and 8.08%, and year-on-year increases of 85.11% and 13.09%. In September 2024, China's transformer export value to Africa, North America, and Latin America were 221 million, 276 million, and 334 million yuan, respectively, with month-on-month decreases of -40.56%, -1.41%, and -4.65%, and year-on-year increases of 55.96%, 19.30%, and -38.07%.

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Meters: Export value decreases month-on-month, with a significant drop in the Asian region

In September 2024, China's meter export value was 943 million yuan, a month-on-month decrease of 19.96%, and a year-on-year increase of 9.34%. Recently, the monthly export value of meters has shown monthly fluctuations, with increases in June and August, and decreases in July and September. Looking at the full year, from January to September 2024, China's cumulative meter export value was 8.199 billion yuan, a year-on-year increase of 12.26%, maintaining steady growth.

Looking at the regions of destination, Asia, Africa, and Europe are the main markets for China's meter exports. In September 2024, China's meter exports to Asia, Africa, and Europe all decreased month-on-month. The export value of meters to Asia, Africa, and Europe were 322 million, 259 million, and 269 million yuan, respectively, with month-on-month decreases of -35.46%, -20.03%, and -12.68%, and year-on-year changes of -1.96%, +41.64%, and +6.65%.

Switches (>1kV): Demand in Asia and Europe has somewhat declined

In September 2024, China's switch export value was 397 million yuan, a month-on-month decrease of 20.55%, and a year-on-year decrease of 26.75%. From January to September 2024, China's cumulative switch export value was 4.603 billion yuan, basically the same as the same period last year.

Looking at the regions of destination, in September 2024, China's cable export value to Asia and Europe were 241 million and 64 million yuan, respectively, with month-on-month decreases of 26.25% and 15.67%.Cables (>1kV): Fluctuating demand in Asia, better performance in Latin America

In September 2024, the export value of cables from our country was 1.11 billion yuan, a decrease of 33.13% month-on-month and an increase of 9.39% year-on-year. From January to September 2024, the cumulative export value of cables from our country was 12.337 billion yuan, an increase of 35.89% year-on-year.

Looking at the regions of destination, the export value of cables from our country to Asia, Europe, and North America decreased month-on-month, while the export to Latin America increased month-on-month. In September 2024, the export value of cables to Asia, Europe, and North America was 442 million, 225 million, and 117 million yuan, respectively, with a month-on-month decrease of 49.88%, 19.48%, and 29.92%; the export value of cables to Latin America was 122 million yuan, with a month-on-month increase of 35.41% and a year-on-year increase of 39.77%.

Investment Advice: Against the backdrop of energy transition, the rapid growth of global renewable energy installations, coupled with the replacement and upgrading of power grid equipment, has led to a stable increase in global power grid construction investment. Our country's power equipment products have technical and cost advantages and strong competitiveness. The penetration rate in overseas markets is expected to continue to increase, and exports of products such as transformers, meters, switches, and cables are expected to continue to benefit. It is recommended to focus on leading stocks with smooth overseas market development, good product reputation, and leading technology.

Risk Factors: Overseas market demand is lower than expected, global power grid investment is lower than expected, changes in trade policy, extreme weather impact, increased industry competition, and product price decline, etc.