Orient: Overseas demand for gas-fired power generation exceeds supply, domestic supply chain ushering in new growth opportunities.

Orient released a research report stating that from an investment strategy perspective, with the overseas gas turbine supply unable to meet demand, gas generators will become the optimal alternative to gas turbines, and the gas generator market is expected to experience rapid growth. Domestic suppliers, with their product competitive advantages, global localization delivery capabilities, rapid production expansion response capabilities, cost control capabilities, etc., will quickly enter the overseas gas turbine supply chain system, achieving higher growth. The main points of Orient are as follows: Gas generators will become the preferred alternative to gas turbines The continuous growth in electricity demand for American data centers has led to a supply gap for gas turbines, with orders from the three major gas turbine manufacturers already scheduled until 2029-2030, forcing data center developers to seek alternative solutions. Currently, the main forms of primary power sources for distributed data centers include gas turbines, gas generators, SOFC (solid oxide fuel cells), etc., with diesel generators mainly used as backup power sources for data centers. Gas generators have advantages in delivery speed, flexibility, etc., and are expected to become the preferred alternative solution for primary power sources for data centers in the event of a shortage in gas turbine supply. Large market space for overseas gas generators It is expected that by 2030, the biggest factor constraining the power supply for American data centers will be on the supply side rather than the demand side. Referencing predictions from various institutions and plans for American data center projects, considering the scarcity of gas turbine capacity and the advantages of flexible deployment of gas generators, it is assumed that gas generators will occupy a certain share within the power generation equipment of data centers and considering the reserve redundancy, it is estimated that the demand for gas generators for American data centers in 2030 will be around 99.4 billion RMB, with a CAGR of around 17% from 2026 to 2030. Gas turbine industry chain: engine, post-processing, and heat exchange cooling are important components The gas turbine industry chain is divided into upstream, midstream, and downstream. The upstream mainly consists of gas engines, generators, control systems, cooling systems, post-processing systems, as well as additional components such as bases and shock absorbers. The engine is the core component of the gas generator set, and post-processing and heat exchange cooling systems are also important components. The cooling system of gas generators mainly consists of components such as heat exchangers, three-way valves, water pumps, control systems, expansion tanks, temperature regulators, and radiator reservoirs. American data center generator sets have strict emission requirements, and exhaust aftertreatment is a systematic integrated engineering, requiring professionalism in system design and integration capabilities, catalyst formulations, temperature control, etc., with high technological barriers. Competition in the gas generator market: market share concentrated towards industry leaders According to Business Insider, Caterpillar holds the largest market share in backup power sources for American data centers, reaching 42%, while Cummins and MTU account for 24% and 21% respectively. In terms of gas generators, according to Intelmarket Research, Caterpillar and INNIO are leading enterprises, with a combined global market share of around 44%. It is expected that Caterpillar, as a leading company, with a strong willingness to expand production and sufficient order backlog, will likely dominate a major share of the gas generator market for American data centers in the future. Domestic suppliers enter the overseas gas turbine chain to achieve higher growth Against the background of rapid growth in overseas gas generator demand and the inability of foreign suppliers to meet the demand for expanded production capacity, it is expected that domestic suppliers with strong competitiveness in areas such as globalization delivery, overseas customer resources, rapid response, synchronized development and integration capabilities, cost control, etc., will have a better opportunity to enter the overseas gas generator supply chain, obtain customer project orders, continuously improve market share, and achieve higher growth. Some companies such as Zhejiang Yinlun Machinery and Weichai Power have already received orders for overseas data center generator projects. Risk warning Gas generator orders lower than expected, slower progress of domestic gas turbine chain companies going global, intensified market competition, changes in assumption conditions affecting calculation results.