HK Stock Market Move | Dongfang Electric Corporation (01072) once rose more than 6%. Institutions pointed out that the market is overlooking the domestic demand for power replacement, and the company's export of gas turbines has increased its revenue.

Dongfang Electric Corporation (01072) once rose by more than 6%, at the time of publication, it rose by 2.73%, reaching 40.66 Hong Kong dollars, with a turnover of 6.42 billion Hong Kong dollars. UBS released a research report stating that conservatively estimating, each 1 gigawatt gas turbine sold to the United States by Dongfang Electric Corporation would increase its revenue by about 16% to 20%, and the bank views the company as the preferred choice in the Chinese energy sector. Investors generally believe that China does not have a power shortage issue, and that the power infrastructure is relatively new, leading to low expectations for domestic power equipment. The bank believes that such views are mistaken. The bank estimates that China's mid-term electricity demand growth is 8-9%, which is double the market consensus of 4-5%. In the bank's above-market-consensus forecast, about 2.5 percentage points come from artificial intelligence, 1.5 percentage points come from manufacturing, and 1 percentage point comes from electrification. Additionally, there is a significant replacement demand for coal-fired power plants, with about 420GW (10% of total capacity) needing to be replaced in the next 5-8 years. While some of this demand may be taken up by renewable energy or nuclear power, the bank believes that investors are overlooking this part of the replacement demand.