Transformer exports rise by 36%! These companies are benefiting from the AI computing power boom

Text | Cheng Cheng Editor | Li Zhuang

The demand for AI computing power drives a significant increase in transformer exports, with industry performance showing differentiation amid cost pressures and overseas opportunities, leading to adjustments in institutional attention.

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AI capital investment remains high, continuously reshaping the global energy and infrastructure landscape. Among them, the transformer industry is undergoing profound changes driven by the demand for “computing infrastructure” and squeezed by “rising costs.”

According to data from the General Administration of Customs, China’s transformer exports are projected to grow by 36.3% year-on-year in 2025; from January to February 2026, cumulative exports increased by 41.42% year-on-year, confirming the strong demand brought by the explosive growth of AI data centers (AIDC). However, industry prosperity and capital market performance are showing notable divergence. Prices of core raw materials such as copper and aluminum have surged significantly, continuously eroding profit margins, causing some companies’ performance to fall short of expectations, and their stock prices to undergo deep corrections.

This industry transformation triggered by AI, amid export prosperity and cost pressures, tests the resilience of each transformer company’s operations.

Benefiting from increased AI capital investment

Positive export data for transformers

Recently, the General Administration of Customs released data on electrical equipment exports in February 2026. The data shows that from January to February, the total export value reached 9.27B yuan, a 41.42% year-on-year increase, with the industry maintaining a steady growth momentum. Previously, the full-year 2025 transformer export value had reached 64.6 billion yuan, a 36.3% increase year-on-year.

Behind the positive export data is the explosive growth of AI data centers in 2025, primarily reflected in the capital expenditure of downstream cloud service providers (CSP).

According to Guoxin Securities research reports, domestically, Alibaba’s capital expenditure on AI + cloud in Q1 2026 reached 38.7 billion yuan, a 220% increase year-on-year, and a 57% increase quarter-on-quarter. It is expected to invest over 380 billion yuan in the next three years for cloud and AI hardware infrastructure. Tencent’s capital expenditure in Q2 2025 was 19.1 billion yuan, up 119% year-on-year.

Overseas, the four major cloud providers continued to increase their capital expenditure in 2025, expected to exceed 350 billion USD, a roughly 46% increase. Among them, Amazon is projected to spend 100 billion USD in 2025, up 29%, mostly on AI and cloud services AWS; Microsoft’s capital expenditure in 2025 (calendar year) is expected to surpass 100 billion USD, up 32%, mainly for building AI data centers; Google’s full-year capital expenditure was raised from the original plan of 75 billion USD to 85 billion USD, a 62% increase, mainly for building and upgrading data center infrastructure; Meta’s annual capital expenditure is revised upward from 64 billion to 72 billion USD, a 68% to 84% increase, mainly investing in data centers and AI hardware.

Global computing power infrastructure is growing rapidly, significantly increasing electricity demand. The latest IEA report “Electricity 2026” states that by 2030, the additional electricity consumption worldwide will be equivalent to more than two current EU electricity usages. The IEA emphasizes that large-scale AI applications are a key driver of the surge in electricity demand. The agency’s latest forecast predicts that by 2030, global data center electricity demand will more than double, reaching about 945 TWh.

With the acceleration of overseas data center construction in 2025, the demand for core equipment—transformers—has increased accordingly, which is directly confirmed by the export data released by the General Administration of Customs. Data shows that China’s transformer export cycle has continued for 26 months. Since early 2024, exports have maintained positive year-on-year growth, with full-year 2025 exports reaching 64.6 billion yuan, a record high; in January–February 2026, growth remains around 40% at a high level.

Guoxin Securities believes that the power capacity of data center power distribution equipment is generally 3–5 times the computing load. Based on a conservative estimate of 3 times the load, from 2025 to 2030, the demand for AIDC electrical equipment will be 29 GW, 48 GW, 60 GW, 67 GW, 70 GW, and 74 GW, with an average annual growth rate of 20%. The market space for supporting dry-type transformers, low- and medium-voltage switchgear, UPS, HVDC (including traditional HVDC and 800V HVDC), and solid-state transformers is expected to reach 8.5 billion yuan, 34.1 billion yuan, 4.1 billion yuan, 38 billion yuan, and 23.9 billion yuan, respectively.

Some companies’ profits are dragged down by rising raw material prices

Notably, despite the continued positive export data, the recent market performance of the transformer sector has been less than ideal. According to Dazhihui data, from March 11 to March 30, the Dazhihui Transformer Index fell by 16.12%, with all 38 concept stocks in the sector declining. Among them, Huaming Equipment, Jingquan Hua, and Yinneng Electric Power saw declines exceeding 20% in the period.

The core factor driving the stock prices of listed companies is their fundamentals. It is understood that some companies’ performance fell short of expectations, including global dry-type transformer leader Jinpan Technology and transformer switchgear leader Huaming Equipment. According to their financial reports, in 2025, their net profits attributable to parent increased by 14.82% and 15.54%, respectively.

Quarterly, Jinpan Technology and Huaming Equipment’s net profits attributable to parent in Q3 2025 grew by 39.92% and 7.79% quarter-on-quarter, but in Q4, they declined by 21.2% and 39.41%. Similarly, gross profit margins also decreased by nearly 1 percentage point and nearly 4 percentage points compared to Q3.

In the transformer industry chain, upstream includes core raw materials such as copper, aluminum, and oriented silicon steel, as well as key components like iron cores, windings, and switch switches. Wind data shows that LME copper futures prices rose by 21.7% in Q4 2025, up 42.52% for the year; LME aluminum futures prices increased by 11.81% in Q4 2025, up 17.46% annually. Entering 2026, by the end of Q1, the maximum increase for LME copper was 24.17%, and for LME aluminum, 19.03%. Additionally, the price of oriented silicon steel increased by about 5%–10% in 2025.

The rise in raw material prices undoubtedly weighs on transformer companies’ performance. Although Jinpan Technology and Huaming Equipment did not specify this in their annual reports, other companies in the same sector such as Manyuan Intelligent, Sanbian Technology, and Taiyong Changzheng explicitly mentioned in their 2025 earnings forecasts or quick reports that raw material price increases have put pressure on gross margins.

Head Leopard Research Institute previously analyzed that “copper accounts for over 40% of transformer production costs, and its price trend directly impacts corporate profitability. In 2024, China’s copper prices increased by 4.3%–6.8% to 64,000–68k yuan/ton, compressing the gross profit margin of some small and medium-sized manufacturers by 3–5 percentage points.”

Of course, despite some companies facing raw material cost pressures, most transformer companies still have good fundamentals. According to Wind data, among 18 companies that issued 2025 performance forecasts, 9 companies are expected to see performance increases or profit recovery. In terms of net profit change, 10 companies are expected to achieve year-on-year growth. Additionally, among the 9 companies that recently published formal annual reports, all saw revenue growth, with only 1 company experiencing a decline in performance.

New changes in institutional attention

In 2025, the market maintained high attention to the transformer sector, reflected both in stock price performance and in changes in fund holdings.

Statistics show that, under the backdrop of the Shanghai Composite Index rising by 18.41%, the Dazhihui Transformer Index increased by 40.5%. Of the 38 concept stocks in the sector, 31 saw their stock prices rise, with 13 outperforming the transformer index.

From the perspective of fund holdings, most of the well-performing companies received increased fund positions in all four quarters of 2025. Wind data shows that at the end of Q4 2025, compared to the end of Q1, 27 companies saw increased fund holdings. The largest increases were in Jinpan Technology and Igor, with increases of 9.47 and 8.65 percentage points, respectively. Jinpan Technology’s fund holding ratio at the end of Q1 was 3.69%, rising to 13.15% by the end of Q4.

In addition to changes in fund holdings, institutions conducted research on 38 companies in 2025, except for Senyuan Electric, which had no research records. Among them, 10 companies were researched more than 10 times, including Huaming Equipment, Shunluo Electronics, Samsung Medical, Sifang Co., and Tebian Electric. Huaming Equipment and Shunluo Electronics were researched 74 and 35 times throughout the year, with 616 and 464 institutions participating.

However, in 2026, institutional research enthusiasm for transformer companies has cooled compared to the last quarter of 2025. According to Wind data, in Q4 2025, 22 of the 38 transformer companies received institutional research; in Q1 2026, this number dropped to 11, a 50% decline.

It is worth noting that companies such as Jiezhi Environmental, Jiuzhou Group, Taiyong Changzheng, and Jinpan Technology, which received 4 or more research visits in Q4 2025, did not receive any in 2026. Similarly, industry leaders Tebian Electric, China Western Electric, and Igor also did not attract attention. Nonetheless, Huaming Equipment and Shunluo Electronics remain popular, with 8 and 3 research visits in Q1 2026.

Huaming Equipment is a leader in transformer switchgear. During a survey on February 27, the company responded to questions about growth drivers. The company stated, “Both sales volume and sales prices have increased. The gross profit margin of switchgear remains high, mainly due to business structure optimization driving up the average sales price, combined with scale effects from increased sales. The structure of sales growth is also key—changes in the proportion of high-value-added products versus general products will influence the overall average price.”

(This article was published in the April 4 edition of Securities Market Weekly. The stocks mentioned are for illustrative analysis only and do not constitute investment advice.)