GF Securities: NARI Technology(600406.SH) — Secondary-Equipment Leader Set for Non-Linear Growth in the "15th Five-Year" Plan
GF Securities expects NARI Technology, China's secondary-equipment leader, to benefit from non-linear grid secondary and power-electronics demand in the 15th Five-Year Plan, projecting 2026-2028 net profit of RMB 9.22-11.18bn. The gap: 1H2026 profit grew only 4.08%.
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All financial data and projections are based on publicly available company filings and a third-party research report (GF Securities, NARI Technology Deep Report, 15-Jul-2026). Figures are presented in RMB (CNY) unless otherwise noted. Cross-market accounting treatments (e.g., PRC GAAP vs. IFRS vs. US GAAP) may result in material restatements.
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GF Securities expects NARI Technology Co., Ltd. (600406.SH), as a secondary-equipment leader, to benefit substantially from non-linear growth in grid secondary and power-electronics equipment during the "15th Five-Year Plan" period (2026–2030), with AI power-computing coordination and grid-forming storage technology supporting a steady ~10% net-profit CAGR over 2026–2028.
The industry-logic inflection lies at the "high-penetration renewables tipping point": GF Securities estimates that during the "14th Five-Year Plan," State Grid headquarters' primary-equipment tender amounts grew at a ~17.6% CAGR, markedly above the ~7.9% for secondary equipment; yet by end-2025, cumulative wind-and-solar installed capacity had risen to 47%, approaching the high-penetration threshold where power balance pressure and control-mechanism demands intensify — hence secondary and power-electronics equipment is expected to see non-linear growth in the "15th Five-Year Plan" (Source: GF Securities, NARI Technology Deep Report, 15-Jul-2026). NARI holds persistently top-tier State Grid headquarters share in converter valves, DC control and protection, dispatch, relay protection, and monitoring; in AI it deploys a power-computing coordination dispatch platform and AIDC power-supply systems, with subsidiary Ruiteng moving into AIDC liquid cooling and intelligent-computing dispatch; in storage it pioneered grid-forming control technology, and GF Securities projects global storage installations at +45%/+29% in 2026/2027. On this basis, GF Securities projects 2026–2028 net profit attributable to shareholders of RMB 9.22bn/10.18bn/11.18bn (+11.3%/+10.4%/+9.8%), applying a 23.0x P/E to 2026 earnings for a fair value of RMB 26.40 per share, maintaining a Buy rating (all figures are broker forecasts, not realized results).
A gap worth monitoring: GF Securities projects 2026 net profit growth of +11.3% (RMB 9.22bn), whereas 1H2026 net profit attributable to shareholders actually grew only +4.08% — the "revenue-profit gap" reflecting low-margin storage scaling, FX losses of RMB 100-200mn, and credit impairments of RMB 80-90mn, implying a significant second-half acceleration would be required to meet the full-year forecast. The report elaborates on "non-linear growth in secondary and power-electronics equipment" and the AI opportunity, but devotes limited attention to the current-period earnings-quality pressure — precisely the key variable determining whether the projection is achievable. Three items warrant tracking: whether the storage gross margin stabilizes, whether UHV/flexible-DC orders and converter-valve revenue convert on schedule, and whether power-computing coordination and AIDC power-supply orders progress — the core anchors for validating the "non-linear growth + ~10% CAGR" thesis.
Risk disclosure: The above is a summary of a brokerage research report and does not constitute investment advice. All projections are broker forecasts and subject to uncertainty; actual results may differ materially. The risks cited in the original report include grid-investment shortfalls, slower-than-expected renewable-generation and storage installations, and overseas operating risks.
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