UBS: China's power sector is expected to enter a multi-year growth cycle. Power ETF Tianhong (Subscription code 560453) will start fundraising next Monday!

Recently, the UBS Wealth Management Investment Director’s Office (CIO) issued an institutional view, saying that, driven by policy support, growth in structural demand, and overseas expansion, China’s electric power and resources sector is expected to enter a multi-year growth cycle.

UBS said that investment in China’s power grid and renewable energy will increase significantly. Combined with rising loads at artificial intelligence (AI) data centers and the acceleration of electrification, these factors are reshaping the structure of power demand. From 2026 to 2030, China’s power demand growth rate may be notably higher than in the past. UBS expects demand to remain at a 6% to 7% annual compound growth rate on average. Chinese companies have cost and technology advantages (especially in renewable energy and energy storage), and they are expanding businesses globally, forming a full value-chain layout spanning upstream materials, power grid infrastructure, and downstream power, renewable energy, and energy storage equipment.

Against this backdrop, next week, an ETF product that allocates to power-related assets will open subscriptions.

According to a public notice by Tianhong Fund, Tianhong CSI All-Share Electric Power Utilities Exchange-Traded Open-Ended Index Securities Investment Fund (on-exchange expanded abbreviation: Power ETF Tianhong; subscription code: 560453; fund code: 560450) will officially begin fundraising on April 13 (Monday). The fundraising period runs from April 13 to April 17, with total subscribed units of no less than 200 million units.

Power ETF Tianhong (subscription code: 560453) tracks the CSI All-Share Electric Power Utilities Index. The index holds a basket of leading power sector firms, strictly selects 57 constituent stocks, and the top ten weightings account for more than 48%, covering leading companies in various sub-sectors such as Yangtze Power, China Nuclear Power, and China Three Gorges Energy. In addition, electric power utilities have natural operating stability and defensive attributes. Wind data shows that, as of now, the dividend yield of the CSI All-Share Electric Power Utilities Index (trailing 12 months) is still 2.49%.

CITIC Securities pointed out that dual carbon targets and the development of a new power system will remain the main theme in future power system construction. Large-scale ultra-high-voltage projects being added/expected to be added to the plan will strengthen construction and development expectations for major ultra-high-voltage projects. On the other hand, amid AI-driven continued increases in power demand and a global multi-year cycle of upgrading power equipment, new business formats such as power-generation-and-computation coordination will continue to be explored and developed.