HK Stock Market Move | Dongfang Electric Corporation (01072) rose over 5%. Citigroup believes that the company is more likely to receive new orders from Southeast Asian data centers or utility customers.

Dongfang Electric Corporation (01072) rose by more than 5%, as of the time of submission, it increased by 3.71% to HK$31.36, with a turnover of HK$166 million. Citigroup released a research report stating that Dongfang Electric Corporation's stock price has increased by approximately 65% in the past six months. The bank believes that this is mainly due to investors' expectations that the company may sell gas turbines to overseas data centers. Compared to American clients, Dongfang Electric Corporation is more likely to receive new orders from Southeast Asian data centers or utility customers. The bank predicts that the selling price of their 50MW gas turbines for both domestic and overseas markets will be less than RMB 100 million per unit, with a gross profit margin expected to be between 10% and 15%. The bank believes that the company's selling price and gross profit margin are lower compared to overseas competitors, mainly due to technological differences and a lack of economies of scale. The company developed China's first F-class 50MW gas turbine in October 2022, with a turbine temperature reaching 1400 and a combined cycle efficiency of 38%. In comparison, GE Vernova's model has a turbine temperature of 1600 and a combined cycle efficiency of 64%. It takes the company 1 to 1.5 years from receiving a new order to delivering the product. This year, the company plans to add a production line with an annual production capacity of up to 10 units of 50MW gas turbines.