On March 18, the stocks of several power equipment companies, including XJ Electric, Guodian NARI, and Pinggao Electric, suffered significant declines due to the spread of false news claiming that "State Grid Corporation of China was demolished into five." Some of these stocks fell by as much as 9.99% or even 10% on that day, while others dropped by around 6.17%. However, the following day, on March 19, Pinggao Electric showed a quick recovery, with its stock price stabilizing and even rebounding slightly. Meanwhile, the declines for State Power Nanrui and Xuji Electric also narrowed, showing signs of market stabilization.
Looking at the margin financing and stock data from March 18, it appears that investors were not overly concerned about the long-term impact of the rumors. Some stocks, like XJ Electric, saw net short-term repayments, indicating that some investors were taking profits or engaging in short selling. At the same time, there were also traders who decided to go against the market trend, buying at lower prices and increasing their positions, anticipating a potential rebound.
To better understand whether the domestic power equipment sector was truly affected by the misinformation and what the future might hold, a reporter reached out to Lu Xiaobing, General Manager of the Oriental Capital Financial Products Department. As a seasoned analyst with extensive experience in the electrical equipment sector, Lu explained that the sharp drops in the shares of Xuji Electric, State Power Nanrui, and Guodian South were largely an overreaction to the false news. He emphasized that rational investors should not be swayed by such market fluctuations. “It's normal for investors to react to negative news,†he said, “but this kind of overreaction can lead to unnecessary losses.â€
Lu further explained that the reason behind this overreaction lies in the fact that, in recent years, the State Grid Corporation of China has been actively promoting the development of ultra-high voltage (UHV) transmission and smart grid technologies. This has already created strong demand for high-quality electrical equipment in the market.
Electrical equipment is typically divided into primary and secondary categories. Regardless of the type, all equipment must meet strict requirements for security and stability. Achieving these standards requires long-term technical development and practical application. Only through years of accumulated experience can manufacturers meet the rigorous demands of the power grid. Several major Chinese electrical equipment companies have gone through long periods of growth and refinement before reaching their current level of maturity and stability. Their products are now well-established and reliable.
As a result, it is highly unlikely that the entire industry will face major disruptions. The stock prices of listed electrical equipment manufacturers are expected to remain relatively stable over the long term. Investors who understand the fundamentals of the sector are likely to view the recent volatility as temporary and avoid making hasty decisions based on rumors.
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