DONGFANG ELEC (01072) saw its shares rise more than 3% again. At the time of writing, the stock was up 1.07%, trading at HK$45.1, with a turnover of HK$666 million. A Citigroup research report stated that DONGFANG ELEC has achieved a key strategic breakthrough by securing a landmark order from a Canadian customer for 20 units of 50MW gas turbine generator sets. The unit price is RMB 200 million, with a gross profit margin of 40-50%. The report indicated that based on the expected revenue from the gas turbine generator sets, it has raised its net profit forecast for DONGFANG ELEC for the 2026-2027 fiscal year by 14-21%. Calculated at 22 times PE for its H-shares and 26 times PE for its A-shares in 2026, the valuation is considered attractive within the global gas turbine industry. China Securities Co., Ltd. believes that the power shortage in North America presents an opportunity for DONGFANG ELEC to export its self-developed gas turbines to developed countries. The scale of the supply-demand gap is sufficient to support Chinese gas turbines beginning to enter the global supply chain during this once-in-30-years gas turbine cycle. According to estimates, the total value of the company's gas turbine export business could potentially reach hundreds of billions, or even thousands of billions of RMB. The variance in expectations for its main business stems from skepticism about growth and neglect of after-sales services. The diversification of DONGFANG ELEC's business and the growth of its existing service operations are gradually mitigating the cyclicality associated with new power installation capacity.
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