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 systems are evolving from uninterruptible power supplies (UPS) to full DC systems, with output voltage levels continuously increasing, accelerating SST solutions; 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 solution upgrades. Additionally, AIDC and new energy sectors are also boosting overseas grid upgrade demands. It is expected that overseas power system upgrades will replicate China’s “14th Five-Year Plan” cycle, focusing on three stages: 1) energy storage, 2) base load power equipment, and 3) grid infrastructure.

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Electricity & New Energy | AIDC & Export Prosperity Resonance, Balancing Grid Domestic Demand Safety Margins

Looking ahead to March 2026, we are optimistic about the synchronized prosperity of AIDC and exports, represented by space photovoltaics, AIDC, power equipment, and energy storage; we also recommend paying attention to high safety margin sectors like the 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 & exports: we believe domestic brands will increase their market share in server power supplies, and see opportunities in distribution systems, energy storage, and solid-state transformers (SST) for exports 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 grid demand: expectations for domestic policies continue to rise, and leading grid companies may see valuation recovery.

▍ Space Photovoltaics: Computing power support drives satellite power increases, with solar wings as the largest “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 cell demand from 0.1 GW to 5-10 GW. Currently, gallium arsenide (GaAs) cells will remain dominant in the short term, maintaining a 70% penetration rate, but as costs decrease and technology advances, P-type heterojunction (HJT) and perovskite/silicon tandem cells will gradually increase their market share, especially with perovskite & silicon tandem cells expected to reach 70% penetration in the long term. We predict that by 2035-2040, the overall market for satellite photovoltaic cells could reach 297.7 billion yuan.

▍ AIDC & Export: Upgrades and iterations of 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 the HVDC segment; CSP vendors and NV solutions are advancing in parallel. Rack power supplies are generally advantageous for Taiwanese manufacturers, with companies like Magmet 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 market share in server power supplies, and see investment opportunities in new domestic supercapacitors, SSTs, and power systems for export driven by capacity shortages and solution upgrades. Furthermore, AIDC and new energy sectors are also driving overseas grid upgrade demands. We believe that overseas power system upgrades will likely follow China’s “14th Five-Year Plan” cycle, focusing on three stages: 1) energy storage, 2) base load power equipment, and 3) grid infrastructure.

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

The “14th Five-Year Plan” for grid investment remains steady and strong, with major projects like ultra-high voltage (UHV) expected to see continued catalysis. In January 2026, State Grid announced a plan to invest 4 trillion yuan during the “14th Five-Year Plan,” a 40% increase over the “13th Five-Year Plan,” reinforcing expectations for steady and strong growth in grid investment 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 prosperity of major projects like UHV construction could further improve, benefiting core equipment segments.

▍ Risk Factors:

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

▍ Investment Strategy

1. Key recommendations for March 2026: Focus on the prosperity resonance of AIDC and exports, such as space photovoltaics, AIDC, power equipment, and energy storage; also pay attention to high safety margin sectors like the grid during the “Two Sessions” policy window period.

2. Mid to long-term: Continue monitoring the long-term upgrade trend of overseas power systems driven by AIDC and new energy, with a focus on leading Chinese companies with deep overseas market presence, multi-product export capabilities, and active participation in AIDC power system upgrades. Balance resource acquisition with core customer bases in Europe and America and domestic stability, favoring leading companies that are expanding globally while maintaining stable domestic performance.

(Source: People’s Financial News)