The typically low-profile transformer sector has become active in the A-share market. On January 13th and January 14th, transformer concept stocks rose against the broader market's downward trend, with San Bian Science&Technology Co.,Ltd. (002112.SZ) hitting the daily limit-up for two consecutive days, Hainan Jinpan Smart Technology Co.,Ltd. (688676.SH) rising over 4% on both days, and Eaglerise Electric&Electronic(China)Co.,Ltd. (002922.SZ) gaining nearly 10% over the two-day period. On January 15th, San Bian Science&Technology Co.,Ltd. continued its limit-up streak. Increased demand in both domestic and international transformer markets is a significant driver behind this surge. Eaglerise Electric&Electronic(China)Co.,Ltd. stated: "Currently, the demand for transformers overseas is quite tight, firstly because there has been no new production capacity added abroad in the past two years, and another more important reason is the explosion in demand from overseas data centers and energy storage, which is driving the transformer industry. Against this backdrop, overseas customers are leaning towards Chinese companies, especially those with production capacity overseas." The most eye-catching performer is San Bian Science&Technology Co.,Ltd., whose stock price hit the daily limit-up on January 13th, 14th, and 15th. In recent interactions with investors, the company explained its business, products, and overseas market situation, stating that its main business is the R&D, production, and sales of various types of transformers, primarily used for power conversion and transmission, with current exports to countries in North America and Southeast Asia. During the bull market of 2025, San Bian Science&Technology Co.,Ltd.'s stock price saw some gains but not significantly, rising 19.14% for the full year. However, entering 2026, the company's stock surged 59.5% in just half a month, with its market capitalization increasing from 3.9 billion yuan to 6.221 billion yuan. Both Hainan Jinpan Smart Technology Co.,Ltd. and Eaglerise Electric&Electronic(China)Co.,Ltd. saw combined gains of nearly 10% over the two days. Hainan Jinpan Smart Technology Co.,Ltd. is a leading enterprise in the transformer industry; after two days of gains, its total market capitalization reached 44.571 billion yuan. It is understood that the company has been operating in the dry-type transformer industry for many years and has recently expanded into complete sets of products, energy storage product series, and liquid-immersed transformers. The main products of Eaglerise Electric&Electronic(China)Co.,Ltd. include new energy transformers and industrial control transformers; after two days of increases, its stock price hit a record high of 38.48 yuan per share. Tbea Co.,Ltd. (600089.SH) has a diversified business, but power transmission and transformation remain its largest segment, including products like transformers, wires and cables, and switches. Its stock hit the limit-up on January 13th but fell 1.97% on January 14th. In terms of performance, most transformer companies have shown solid results. In the first three quarters of 2025, Hainan Jinpan Smart Technology Co.,Ltd. achieved operating revenue of 5.194 billion yuan, a year-on-year increase of 8.25%, and a net profit of 486 million yuan, up 20.27% year-on-year; Tbea Co.,Ltd. achieved operating revenue of 72.918 billion yuan, a slight increase of 0.84% year-on-year, and a net profit of 5.484 billion yuan, surging 27.55% year-on-year. Jiangsu Huachen Transformer Co.,Ltd. (603097.SH), whose main business is also transformers, reported revenue of 1.443 billion yuan for the first three quarters of 2025, up 37.46% year-on-year, and a net profit of 72.2038 million yuan, an increase of 15.41% year-on-year. However, the performance of San Bian Science&Technology Co.,Ltd. and Eaglerise Electric&Electronic(China)Co.,Ltd. was less ideal. In the first three quarters of 2025, San Bian Science&Technology Co.,Ltd. achieved operating revenue of 1.239 billion yuan, a decrease of 16.91% year-on-year, and a net profit of 40.155 million yuan, plunging 56.71% year-on-year; Eaglerise Electric&Electronic(China)Co.,Ltd. achieved operating revenue of 3.808 billion yuan, an increase of 17.32% year-on-year, but its net profit was 178 million yuan, down 12.71% year-on-year. Behind the activity in transformer concept stocks lies a market entering a period of high prosperity. Due to increasing market demand, Jiangsu Huachen Transformer Co.,Ltd. expanded its production capacity and put the first phase of its new energy power equipment industrial base into operation in 2025. The company's chairman, Zhang Xiaojin, previously stated in an interview: "Facing the rapid growth in market demand, our previous production capacity was insufficient. We invested in building a factory of about 30,000 square meters around the time of our IPO, but the total capacity was not high, and we could only operate at full capacity. In the industry, there are many companies capable of producing similar products, but without new investments, it is impossible to meet current market demand; the slower the pace, the easier it is to miss opportunities. According to current customer demands, the capacity and weight of individual products have increased significantly. If the hardware cannot keep up, even with sufficient technical preparation, we cannot supply the goods." It is understood that the current incremental demand for transformers mainly comes from the upgrade and renovation of traditional power grids in Europe and America, as well as new requirements brought about by the development of new energy. "Based on the analysis from our overseas business department over the past two years, most power grid equipment in Europe has been in operation for 40-50 years, and in the US for 30-40 years, while the designed service life of this equipment is between 20-30 years; they are now operating beyond their intended lifespan. This is quite different from the domestic situation, where equipment is updated much faster," Zhang Xiaojin commented. According to the "Global Transformer Industry Market Analysis Report" published by Industrial World, with the rise of new energy, the structural changes in transformer market demand are particularly significant. Procurement in traditional power generation and transmission and distribution sectors is stabilizing, while demand from the new energy sector is growing at a pace far exceeding the industry average. "Specifically, step-up transformers serving wind and solar power stations, and smart distribution transformers adapted for distributed energy integration are in high demand. It is estimated that between 2025 and 2030, the annual new capacity of transformers directly supporting renewable energy will account for nearly 40% of the total new capacity globally. The replacement cycle driven by rising energy efficiency standards, the explosive growth of digital infrastructure like data centers, and the construction of electric vehicle charging networks together create diversified, multi-layered market opportunities." Hainan Jinpan Smart Technology Co.,Ltd. stated: "The development of the era is inseparable from energy and electricity; wherever electricity is used, involving voltage step-up or transformation, transformers are essential. Wind power, photovoltaics, and energy storage all have demand for transformers. The '14th Five-Year Plan' period is a time of rapid development for new energy, and we have achieved our own development during this era, including growth in performance." What truly fuels the imagination for transformers is AI computing power. In early 2026, Elon Musk explicitly stated at an internal US tech summit that the power demand for AI supercomputing clusters and data centers is growing explosively, and high-performance transformers are key to energy conversion; the current situation of "difficulty in obtaining a single unit" far exceeds expectations. "2023 was considered the first year of AI. AI has a huge demand for power and energy. Back then, we realized the AI era was coming, so we proactively embraced AI, focusing on the data center sector. Our data center business has grown very quickly." Hainan Jinpan Smart Technology Co.,Ltd. stated in its 2025 interim report: "From the perspective of AI's energy demand, data centers have become a new engine on the electricity consumption side. With the rapid global development of AI technology, the demand for AI computing power is growing exponentially, leading to high-speed growth in global AI data center investment and its associated power demand." According to a research report from Guojin Securities, equipment investment costs account for about 70%-80% of the total construction investment cost of a data center, with the power supply and distribution system investment cost accounting for about 10%-15% of the equipment investment cost. Data from GlobalMarket Insights indicates that the global data center transformer market size will grow from $9.2 billion in 2023 to $16.8 billion in 2032, with a compound annual growth rate of 6.92%. It is expected that data center transformers will become one of the important growth sources for the global transformer market in the next decade. It is worth mentioning that the aforementioned companies have almost unanimously identified the application of transformers in data centers and AI computing as a key development direction. Eaglerise Electric&Electronic(China)Co.,Ltd. stated in its 2025 interim report that, based on its forward-looking layout and technological accumulation in the data center field, data center transformer capacity was gradually released in the second quarter, and the company achieved breakthroughs in both the product structure and market expansion of data center transformers: the product categories expanded from phase-shifting transformers for data centers to epoxy resin cast dry-type transformers and oil-immersed transformers for data centers. Eaglerise Electric&Electronic(China)Co.,Ltd. told reporters: "Energy storage and data centers are bringing incremental growth to the domestic transformer market. Looking ahead to the next two to three years, the demand for overseas power equipment is also promising. We believe it is a very prosperous industry."
Comments