Key Takeaways:
- CLSA initiates coverage on 5 Chinese gas turbine stocks citing AI data center power demand
- Top pick JEREH gets Conviction List Buy with RMB221 target price
- Global gas turbine demand forecast at 120GW annually from 2025 to 2030
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CLSA initiates on 5 Chinese gas turbine stocks, JEREH top pick at RMB221
CLSA initiated coverage on 5 Chinese gas turbine stocks, naming JEREH as top pick with a Conviction List Buy rating and RMB221 target price.
"AI data center-driven power demand is pushing the gas turbine industry into a structural upcycle, while tight global supply opens a window for Chinese manufacturers to expand internationally," CLSA said in a research report published Thursday.
The broker forecast global annual gas turbine demand at about 120 gigawatts between 2025 and 2030, a 20% increase from the 100-gigawatt baseline in 2025. The three traditional original equipment manufacturers — GE Vernova Inc., Siemens Energy and Mitsubishi Heavy Industries — control about 80% of the market, but their order books are already scheduled through 2030, creating entry opportunities for Chinese players.
CLSA expects JEREH's gas turbine skid assembly business to achieve rapid growth from a near-zero base, with gross profit contribution projected to reach 33% by 2028. The other four stocks — YINGLIU, HIMILE, HARBIN ELECTRIC and SH ELECTRIC — all received Outperform ratings.
The broker set target prices of RMB80 for YINGLIU, RMB62 for HIMILE, HKD18 for HARBIN ELECTRIC, and HKD3.9 for SH ELECTRIC H-shares, with SH ELECTRIC A-shares at RMB8. CLSA also reiterated its Conviction List Buy ratings on global gas turbine leaders GE Vernova and Siemens Energy, with target prices of USD1,333 and EUR250 respectively, saying both companies will continue to dominate the heavy-duty gas turbine market.
Unlike previous speculative order cycles, the current upcycle is supported by real and visible project pipelines, CLSA said. The broker's analysis suggests Chinese manufacturers are positioned to capture market share as traditional OEM capacity remains constrained through the end of the decade.
The initiation reflects institutional conviction that AI infrastructure buildout will drive multi-year demand for power generation equipment. Investors will watch for order wins from Chinese manufacturers as a lead indicator of market share gains against the incumbent OEMs.
This article is for informational purposes only and does not constitute investment advice.
