CITIC Securities: AIDC Power Supply System Upgrade and Iteration Create New Opportunities; Overseas Power Grid Upgrade Trends Are Clear

CITIC Securities Research Report states that the upgrade and iteration of AIDC power supply systems create new opportunities, with clear trends in overseas grid upgrades. AI power supply systems are evolving from uninterruptible power supplies (UPS) to full DC systems, with output voltage levels continuously increasing, and SST solutions accelerating; as server power density improves, product volume and prices rise simultaneously, driving demand for supercapacitors. CITIC Securities is optimistic about the domestic brands gaining market share in server power supplies, and sees investment opportunities in new products like supercapacitors and SSTs for export, driven by capacity shortages and system upgrades. Additionally, AIDC and new energy sectors are also boosting overseas grid upgrade demands. It is expected that overseas markets may replicate China’s “14th Five-Year Plan” for power system upgrades, focusing on three stages: 1) energy storage, 2) base load power equipment, and 3) grid infrastructure.

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Electricity & New Energy | AIDC & Overseas Market Boom Resonance, Balancing Grid Domestic Demand Safety Margins

Looking ahead to March 2026, we are optimistic about the synchronized boom in AIDC and overseas markets, represented by space photovoltaics, AIDC, power equipment, and energy storage; we also recommend paying attention to high safety margin sectors like the power grid during the policy window period. 1) Space photovoltaics: with computing power support, the power of individual satellites is clearly increasing; solar wings are the largest “inflation” component in satellite value, and demand-driven overseas capacity deployment is accelerating. 2) AIDC & Overseas: we believe domestic brands will increase their share in server power supplies, and see opportunities in distribution systems, energy storage, and solid-state transformers (SST) for export and technological upgrades; long-term, we expect overseas power systems to undergo continuous upgrades around energy storage, gas turbines, and other base load power sources, as well as grid equipment, in three phases. 3) Domestic demand for power grids: expectations for domestic policies continue to rise, and leading companies in the power grid sector may see valuation recovery.

▍ Space Photovoltaics: Computing power support drives satellite power increases, solar wings are the biggest “inflation” factor.

We forecast that the long-term market space for photovoltaic cells in satellites could approach one trillion yuan; from 2026 to 2035, annual satellite launches are expected to grow from 5,000 to 100,000, driving total space photovoltaic demand from 0.1 GW to 5-10 GW. Currently, gallium arsenide (GaAs) cells will remain dominant in the short term, with a penetration rate of around 70%. As costs decrease and technology advances, P-type heterojunction (HJT) and perovskite/silicon tandem cells are expected to gradually increase their market share, especially with perovskite & silicon tandem cells projected to reach 70% penetration in the long term. We predict that by 2035-2040, the overall market for satellite photovoltaic cells could reach approximately 297.7 billion yuan.

▍ AIDC & Overseas: Upgrades in AIDC power systems create new opportunities, with clear trends in overseas grid upgrades.

AI power systems are evolving from uninterruptible power supplies (UPS) to full DC systems, with output voltage levels continuously rising, and SST solutions accelerating; as server power density improves, product volume and prices are rising together, creating demand for supercapacitors. In terms of competition, VRT and Delta Electronics dominate in the HVDC segment; CSP vendors and NV solutions are advancing in parallel. Rack power supplies are generally advantageous for Taiwanese manufacturers, with companies like MEGMEET entering NVIDIA’s supply chain. In secondary and tertiary power supplies, Infineon, MPS, and Vicor lead in DC/DC power chip technology. We are optimistic about domestic brands increasing their share in server power supplies, and see investment opportunities in new domestic supercapacitors, SSTs, and power systems for export driven by capacity shortages and system upgrades. Furthermore, AIDC and new energy sectors are also driving overseas grid upgrade demands. We believe that overseas markets may replicate China’s “14th Five-Year Plan” for power system upgrades, focusing on three stages: 1) energy storage, 2) base load power equipment, and 3) grid infrastructure.

▍ Domestic Power Grid Demand: Approaching the “Two Sessions” policy window in March, with policy and projects resonating; focus on GIS leaders.

The “14th Five-Year Plan” for the power grid maintains steady and strong investment, with major projects like ultra-high voltage (UHV) expected to be continuously catalyzed. In January 2026, State Grid announced a plan to invest 4 trillion yuan during the “14th Five-Year Plan,” a 40% increase compared to the “13th Five-Year Plan,” reinforcing expectations for steady and strong growth in power grid investments over the next five years. According to CCTV, State Grid stated that this 4 trillion yuan investment will primarily focus on green transformation, with annual additions of about 200 GW of wind and solar capacity within operational areas, aiming for non-fossil energy consumption to reach 25% and electricity to account for 35% of terminal energy consumption, helping to establish a new energy system. We believe that the current boom in major projects like UHV construction could see further uplift, benefiting core equipment segments.

▍ Risk Factors:

• Global power system upgrade demand underperforming expectations;
• Slowing investment in AIDC;
• Chinese companies’ overseas expansion falling short of expectations;
• Domestic power grid investment underperforming.

▍ Investment Strategy:

1. March 2026 Focus: Emphasize AIDC and overseas market boom resonance, with sectors like space photovoltaics, AIDC, power equipment, and energy storage; also, pay attention to high safety margin sectors like the power grid during the March “Two Sessions” policy window.
2. Mid to Long Term: Continue monitoring the long-term upgrade trend of overseas power grids driven by AIDC and new energy, focusing on leading Chinese companies with deep overseas market presence, multi-product export capabilities, and active participation in AIDC power system upgrades. Balance resource acquisition in core European and American clients with domestic demand stability, favoring leading companies that are expanding globally while maintaining stable domestic performance.

(Source: People’s Financial News)