Guolian Minsheng Securities: Tight supply and demand situation in the electricity sector will continue for the next 2-3 years, and the overseas value of aircraft engine overhaul will be re-evaluated.

Guolian Minsheng Securities released a research report stating that the structural electricity gap is caused by the delay in global grid construction and the overflow of heavy fuel engine delivery cycles. The capacity growth of major international manufacturers is limited in the short term, and the tight supply-demand situation is expected to continue for the next 2-3 years. Domestic fuel engines have made breakthroughs in extreme conditions of marine energy applications, and their product strength has been fully validated. Fuel engines are used in various sectors of the oil and gas industry and are expected to become another important stronghold for domestic fuel engines to expand internationally. Key points from Guolian Minsheng Securities are as follows: Aviation-modified fuel engines: "Fast, light, stable, and maintainable," suitable for distributed energy and other scenarios The core advantage of aviation-modified fuel engines in filling the electricity gap and meeting the rapid deployment requirements of scenarios such as data centers is their "fast, light, stable, and maintainable" characteristics. According to research by Global Market Insights Inc., the global aviation-modified gas turbine market is estimated to be around $7.3 billion in 2025, accounting for 41.06% of the total gas turbine market share. This market is expected to grow from $8.2 billion in 2026 to $21.5 billion in 2035, with a compound annual growth rate of 11.3%. However, the capacity growth of major international manufacturers is limited in the short term, and the tight supply-demand situation is expected to continue for the next 2-3 years. This huge gap has given rise to new power supply models such as aviation-modified fuel engines, which can be rapidly deployed. Compared to reciprocating engines and solid oxide fuel cells, aviation-modified fuel engines have significant cost and environmental emissions advantages. Currently, this is a critical starting point for domestic fuel engines to enter mass order execution and concentrate on overseas market volume. Main avenues for fuel engines to go international: 1) North America and global electricity shortage markets: North America and many parts of the world continue to face electricity shortages, especially driven by the trend of self-built power supply for data centers in the United States, which will become an important incremental market for domestic fuel engines to go international; 2) Marine energy and the full oil and gas industry chain market: Domestic fuel engines have made breakthroughs in extreme conditions of marine energy applications, and their product strength has been fully verified. Fuel engines are used in various sectors of the oil and gas industry and are expected to become another important stronghold for domestic fuel engines to go international. Risk warning: 1) Market demand lower than expected; 2) Domestic fuel engines going international lower than expected.