Chongqing M&E (02722) saw its shares climb nearly 6% during morning trading. As of the latest update, the stock was up 4.51%, trading at HK$2.78, with a turnover of HK$21.89 million. The surge follows Cummins' recent release of its fourth-quarter and full-year results. Despite ongoing weakness in the North American truck market, Cummins delivered strong operational performance in both the fourth quarter and the full year. The distribution and power systems divisions achieved record-high sales and profitability, driven by operational efficiency and robust demand for backup power in data centers. Cummins reported fourth-quarter revenue of $8.5 billion, up 1% year-over-year, with net profit reaching $593 million, compared to $418 million in the same period of the previous year.

An Industrial Securities research report highlighted that Chongqing M&E is a leading equipment manufacturer under the Chongqing State-owned Assets Supervision and Administration Commission. The company holds stakes in both Chongqing Cummins and Chongqing Hitachi Energy. The report noted that Chongqing Cummins is Cummins' sole large-bore engine enterprise in China, benefiting from the growing demand for large-bore engines and the expansion of data centers. Meanwhile, Chongqing Hitachi Energy primarily produces transformers rated at 220kV and above, positioning it to gain from the ongoing construction of high-voltage power grids overseas. Both Chongqing Cummins and Chongqing Hitachi Energy are expected to demonstrate strong growth certainty in the coming years.