GF Securities: High growth in demand for overseas data centers, potential opportunities for domestic gas turbine matching.

GF SEC released a research report stating that according to data cited by two dynamic power control public accounts, Mitsubishi Power Ltd. predicts that by 2026, the annual order volume of global gas turbines will increase by 50% compared to the past three years, partially due to the growth of data centers. The global leaders in gas turbines mainly include Mitsubishi Heavy Industries, Siemens Energy, and General Electric (GE Vernova), with the above three companies holding 76% of the global market share. Currently, domestic gas turbine manufacturers mainly focus on light gas turbines, while the domestic substitution of heavy-duty gas turbines is in progress. Major manufacturers include Dongfang Electric Corporation, United Heavy Industries (Shanghai Electric Group joint venture), AECC Aviation Power, and the progress of domestic substitution is expected to accelerate in the future. The main points of GF SEC are as follows: Gas turbines are typically used as the main power source for North American data centers. Traditional data centers rely on the grid as the main power source, with diesel generators as backup power. However, due to the instability of the North American grid and the large power consumption of large data centers built in North America, the basic power infrastructure in the United States is unable to meet the demand. Therefore, mid-sized gas turbines (10-100MW) or heavy-duty gas turbines (100MW or more) are usually needed as the main power source. Several overseas cloud companies are heavily investing in the construction of data centers, and the North American data center construction is experiencing a strong boom. According to Microsoft Vice President Brad Smith, Microsoft will invest approximately $80 billion in the 25 fiscal year to build AIDC for training AI and deploying AI applications globally. Benefiting from the wave of North American data center construction demand, international giant gas turbine orders are growing rapidly. According to data cited by two dynamic power control public accounts, Mitsubishi Power Ltd. predicts that by 2026, the annual order volume of global gas turbines will increase by 50% compared to the past three years, partially due to the growth of data centers. According to the gas turbine focus public account, GE Vernova expects to win 20GW of global gas turbine orders per year in the next four years, with over half of the orders coming from the United States. According to the financial reports of various companies, Siemens Energy's new signed orders for gas services in the 24 fiscal year (23Q4-24Q3) amounted to 16.365 billion euros, a year-on-year increase of +26.89%; GE Vernova had 78 new gas turbine orders (corresponding to 14GW) in the 2024 Q1-3 period, with a power-based growth of 90.5% year-on-year. The global pattern of gas turbines is concentrated, and there are significant potential opportunities for domestic supporting manufacturers. The global leaders in gas turbines mainly include Mitsubishi Heavy Industries, Siemens Energy, General Electric (GE Vernova), with the above three companies holding 76% of the global market share. Currently, domestic gas turbine manufacturers mainly focus on light gas turbines, while the domestic substitution of heavy-duty gas turbines is in progress. Major manufacturers include Dongfang Electric Corporation, United Heavy Industries (Shanghai Electric Group joint venture), AECC Aviation Power, and the progress of domestic substitution is expected to accelerate in the future. In addition, domestic manufacturers have opportunities to supply gas turbine components (blades, cylinders, etc.) and unit accessories (steam turbines, generators), with potential opportunities for component suppliers due to the shortage of orders from foreign giants, including Anhui Yingliu Electromechanical, Allied Machinery, Himile Mechanical Science and Technology, Jiangsu Zhenjiang New Energy Equipment. Stock recommendations: Recommend Anhui Yingliu Electromechanical (603308.SH) (gas turbine blades), Allied Machinery (605060.SH) (supplier of Caterpillar gas turbine castings), Himile Mechanical Science and Technology (002595.SZ) (gas turbine cylinders), suggest keeping an eye on Jiangsu Zhenjiang New Energy Equipment (603507.SH) (supplier of steel structures for Siemens gas turbines). Risk warning: Fluctuations in downstream AIDC capital expenditures; fluctuations in supply chain prices; domestic market share expansion may not meet expectations.