Oracle Data Center Turmoil and UBS Rating Cut Weigh on Hong Kong Power Equipment Stocks

Deep News
09/25

On September 25, Hong Kong-listed power equipment stocks posted significant declines, with Flat Glass Group dropping more than 5%, while Shanghai Electric, Weichai Power, and Tianneng Power each fell over 4%.

Xinyi Solar and Dongfang Electric declined more than 3%, while Goldwind Science & Technology, GCL Technology, and Harbin Electric each dropped over 2%.

On the news front, Oracle issued a force majeure notice to Blue Owl Capital regarding its Project Jupiter data center located in New Mexico. Oracle is attempting to delay payments if the project is postponed.

As a result, Blue Owl Capital and Bloom Energy both closed more than 3% lower in overnight U.S. trading. Project Jupiter reportedly utilizes Bloom Energy's fuel cells.

Notably, investor concerns about the project's prospects have spread from core participants to the surrounding supply chain, and growing public resistance to data center construction is adding further selling pressure.

Mark Hackett of Nationwide noted that this resistance, combined with uncertainty over capital expenditure expectations, has hit power equipment and construction machinery stocks particularly hard.

Additionally, UBS released a report on September 24 downgrading China's power equipment sector due to trade concerns and easing supply conditions, cutting earnings forecasts for 2026 to 2028 by 3% to 66% and reducing target prices by 38% to 67%.

The report pointed out that the sudden slowdown in domestic grid capital expenditure is the core concern. State Grid investment growth fell sharply year-on-year from January to July, bidding projects have been delayed with no clear timeline for resumption, and the global shortage of transformers and gas turbines is easing faster than expected, leaving exporters facing further downward pressure.

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