FY25和1Q26业绩符合预期；增长加速

Nari Tech FY25 and 1Q26 Results Inline; Faster GrowthExpected with AIDC and Overseas Biz targets 12-13% rev growth in 2026 (lower carbonization biz rev growth of+30%, core smart grid biz rev growth of +10-13% and energy digitalizationbiz rev flat yoy). It is to grow R&D and double capex inputs for new AIDCbiz and overseas expansion from2026.MaintainHOLD,waitingfor new biztaking off. rev grew 6% yoy in 2025, while domestic non-grid and overseas rev increased by >30% and80% respectively.Non-qrid segments like EsS, wind, solar,and coal iPP rose more than 37%as a % of sales fell 0.8ppt yoy. Net profit grew 9% yoy, constrained by higher AR impairmentand lower interest income. Rev grew 7.5% yoy in 1Q26, but new contract wins jumped over 20% yoy, suggesting strongerfuture growth. GPM improved 0.9ppt YoY,and SG&A plus R&D costs as a % of sales dropped0.3ppt. Lower financing income limited net profit growth to 6%. 2026 growthtargets (10-15%typical range)exceed grid capexincreases, while profit margin Smart grid rev is projected to rise 10-13%, supported by grid's flexible transmission andpowerdistribution investments.Energy digitalization rev is expected to stay flat due to strategic adjustments in low-margin platforms.Energy decarbonization rev should increase by over 30%, led by Ess (the fastest-growingsegment), while thermal power growth drops to 10% and wind/solar/hydro grows 10-15%.Industrial loT rev may accelerateto20%thanks to newcontracts.Other (EPC) rev are set to grow by more than 10%. New business in AIDC and overseas expansion to diversify revenue outside the grid: Narianticipates a 15-16% yoy increase in SG&A, incl R&D,for 2026 as it develops new products andexpandsoverseas.Capex is expectedto double in2026alsoforthenewproductandoverseasexpansion. The company targets high-growth overseas markets like the Middle East, ASEAN,Latin America,and Europe,focusing on interconnection,energy trade, demonstrationprojects,andflexible DC transmission.Nari uses its State Grid experience to compete in the EsS sector,with installations in Germany and the UK.Nari releasedatechnical whitepaper in 1Q26 and ismarketing solutions for State Grid data centers, with plans for global expansion as productsmature. It continues developing advanced SST devices for EV charging and data centers. Kelly Zou* [Equity Analyst852376711161kelly.zou@jefferies.com Jefferies FY25 rev grew 14.5%, but profit lagged due to margin contraction. 1Q26 rev and net profit only rose >6-7% yoy, but new contracts grew >20% yoy. Naritargets 12-13% rev growth in 2026 (lower carbonization biz rev growth of+30%, core smart grid biz rev growth of +10-13% and energy digitalizationbiz rev flat yoy). It is to double R&D and capex inputs for new AIDC biz and Upside Scenario,CNY35, +33% Downside Scenario,CNY21, -20% Base Case,CNY28, +7% Our bear-case PT of Rmb21.00 is based onthe same SOTP valuation methodology, but weuse the same target P/E multiple of 15x toderive Nari's fair value of its hardware part ofthe business and a lower target P/S multipleof 5x to derive Nari's fair value of its recurringsoftware part of the business. Nari's earningsperformance in the short term might not keepup with market expectations on power sectorinvestment. same SOTP valuation methodology, but we usethe same target P/E multiple of 15x to deriveNari's fair value of its hardware part of thebusiness and a higher target P/S multiple of15x to derive Nari's fair value of its softwarebusiness as China's 'dual carbon" goal mightfurther boost market sentiment on the powersector and, hence, Nari Our base-case PT of Rmb28.00 is based on aSOTP valuation methodology. We use a targetP/E multiple of 15x to derive Nari's fair valuefrom its hardware part of the business and a P/Smultiple of 10x to derive Nari's fair value from itsrecurring software part of the business Catalysts SustainabilityMatters always been committedto providing technical support for the rapid development of China's power grid,information and communication, power generation, energy conservation, environmental protection,industrial control and other industries. As a high-tech enterprise,keeping good talents is also criticalfor Nari's business development and futuresuccess Grid investment growth exceeding marketexpectations. Power sector pricing reform or green energytrading and carbon emission trading schemeprogress. power system by promoting advanced technology and reliable equipment and providing high-qualityservices to serve the development of new energy. 2) With talent capacity building as the core, NariTech constantly improves the construction of talent training system and realizes the comprehensiveimprovementof staffsprofessional ability,professional qualityandprofessionalspirit. Grid digitalization and distributed power systemdevelopment faster than market expectations. sustainability? 2) What are you investing in to promote IP protection and product quality? Jefferies Jefferies Nari Tech Na