Power Equipment Stocks Lead Declines in Hong Kong Market as Rising Oil and Gas Prices Threaten Gas Turbine Demand

Power equipment stocks are leading the market's downward movement.

At the time of writing, shares of DONGFANG ELEC (01072) have fallen by 9.77% to HK$26.42. HARBIN ELECTRIC (01133) shares are down 7.17% at HK$16.19. WEICHAI POWER (02338) has declined by 6.52% to HK$34.42, and CHONGQING M&E (02722) is 2.59% lower at HK$2.63.

The backdrop for this sector-wide weakness is a new expansion cycle for diesel generator demand, driven by the global build-out of AI computing infrastructure, worsening grid bottlenecks, and stricter power supply standards for A-grade data centers. In some North American markets, diesel generators are commonly used as the primary power source.

The sustained increase in international oil and gas prices may substantially curb demand for complete gas turbine units. It is important to note that the role of diesel generators as a backup power source remains firmly established.

Currently, gas-fired generators still hold a relatively low share of the overall power supply mix. While diesel generators were previously the main power source for some clients in North America, the lower operational costs of gas generators are now making them the more preferred choice for power supply among current customers.