1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited View HSBC Global Investment Research at:https:/ Click

2、to viewBullsonthemarch|The 21steditionof theEMSentimentSurvey Chinas speeding-up of new builds of traditional power supply benefits Harbin,one of the three major equipment suppliers Better risk/reward than peers given a more focused business,better growth/margin outlook,and more attractive valuation

3、 Initiate coverage at Buy with a PE-based TP of HKD17.00.Key catalyst next year potential inclusion in Stock Connect Riding on Chinas traditional energy push:Harbin Electric is one of Chinas three major power equipment suppliers.It commands around one-third to half of the domestic market share in co

4、al,nuclear and hydro power equipment.Since the power shortages in 2021-22,China has sped up approvals of traditional energy supply,with the industry now entering the delivery cycle.We believe Harbin is well-positioned to ride on this robust demand,with stable market share and upside to margins.Coal

5、power equipment(47%of revenue):New orders likely peaked in 2025,but revenue will grow and peak until 2027e.We see China adding 50GW of coal power p.a.in 2025-30e(vs market at 30-60GW).To meet Chinas sustainability goals(p.42),Harbin uses advanced technologies for energy saving and emission reduction

6、s.Nuclear equipment(13%of revenue):We expect China to continue to approve 10 new units p.a.Harbins new orders and revenue could double from 2024-27e and we see more secular growth beyond 2030 given the long development cycle.Hydro equipment(12%of revenue):China seeks to double pump storage hydro cap