Guangfa Securities: The fourth regulatory cycle of electricity transmission and distribution prices has been implemented, and the big investment in distribution network will begin.

Guangfa Securities released a research report stating that the upgrade and transformation of the distribution network is becoming increasingly urgent, and the firm expects distribution network reinforcement to become a key focus of the "15th Five-Year Plan". Due to factors such as the delivery of low-priced orders in the previous period and the sustained high level of copper prices in the fourth quarter of 2025, the performance of distribution equipment companies in the first half of 2026 is still under pressure, but the second half of 2026 is expected to see a systemic reversal. It is recommended to focus on distribution companies with multiple layouts in on-grid, off-grid, overseas, and AIDC power supply.