China's Power Equipment Stocks Lag Global Peers Amid AI Boom
nashnova research
The global AI data-center buildout is driving a surge in power-equipment demand, yet Chinese transformer and T&D gear makers have sharply underperformed US, European and Japanese rivals year-to-date — orders are booming but profits are barely moving, pinned down by state-owned buyers who control pricing.
How far behind are China's equipment makers?
Hainan Jinpan Smart Technology is down 29% year-to-date; Sieyuan Electric is down 13%.
Over the same period, GE Vernova rose 42%, Schneider Electric 22%, Siemens Energy 18%, and Hitachi 12%.
This means → the same AI-driven power demand is lifting global peers but weighing on Chinese names, because the profit story is fundamentally different.
Orders are surging — why aren't profits keeping up?
CITIC Securities data: 65 major T&D equipment makers posted combined H1 revenue up 15% YoY to RMB 327.2 billion, but net profit grew just 1% to RMB 22.4 billion.
Jinpan reported H1 revenue of RMB 3.5 billion (+13%) and net profit of RMB 300 million (+14%). GE Vernova's net profit over the same period jumped more than sevenfold to US$5.3 billion.
In plain terms = Chinese firms are winning more orders but barely earning more money; overseas peers riding the same demand wave are seeing profits multiply. That gap — orders up, profits flat — is what the market calls a "scissors spread."
What is the root cause of the profit squeeze?
The dominant buyers are State Grid, state-owned telecom operators, and local-government-backed AI data-center investment platforms — all powerful price-setters.
Suppliers have weak bargaining power and cannot pass rising costs downstream.
This reflects a structural issue: the profit bottleneck is not insufficient demand — it is who holds the purchasing power.
Where is the transformer shortage already biting?
The *Economic Observer* reports that AI servers at a Nantong data center have been sitting in a warehouse for over four months; storage fees alone run to hundreds of thousands of yuan.
Multiple projects have servers still sealed in packaging — the reason is a lack of specialized transformers rated for AI-server loads, blocking grid connection and commissioning.
This means → much of the computing capacity announced on paper is not actually running. The gap between "declared FLOPS" and "operational FLOPS" keeps widening.
Can exports rescue margins?
Jinpan's order backlog grew over 40% YoY to RMB 10.6 billion; overseas new orders hit RMB 4.1 billion, up nearly fourfold.
China's transformer exports reached a record RMB 64.6 billion in 2025, per the *Wall Street Journal*.
But the export push may backfire — domestic transformer supply is already tight, and shipping more units abroad deepens the shortage at home.
What would it take to break the deadlock?
Variable one: whether state-owned buyers' procurement pricing loosens — if buyers keep squeezing, margins stay pinned.
Variable two: how the tension between export growth and domestic supply is managed — exports earn better margins but drain domestic capacity.
In plain terms = Chinese power-equipment makers are caught between "can't make money at home" and "exporting makes the home shortage worse." No clear resolution is in sight near-term.
市场有风险，内容仅供研究参考，不构成投资建议。