ab 21 September 2026 Global Research Downgrading the sector on trade concerns and looser supply We cut 2026-28E earnings by 3-66% and price targets by 38-67% across sector The sector has fallen 30-50% from this year's highs, for two reasons: 1) positioning, as the short leg of the AI trade; and 2) fundamentals, as the global transformer and gas turbine shortage has eased faster than we and the market expected. We see further downside for exporters, with share and margins under pressure from 2028-29E on more Western capacity and rising trade risk in Europe. On domestic names, we see the sudden slowdown in grid capex as a concern, while we believe coal-fired equipment demand could hold up better than the market fears. We downgrade Sieyuan, Huaming, Yingliu, Sanxing and Willfar from Buy to Neutral;