Chongqing Machinery & Electric Co., Ltd. (02722.HK) witnessed a dramatic surge in early trading, with shares jumping 17.97% to HKD 1.51 and turnover hitting HKD 92.83 million. This rally stems from catalysts in China's AI data center (AIDC) sector, notably NVIDIA's July 15 announcement to resume H20 chip sales in the country.

CITIC Securities projects that AI companies will likely boost infrastructure investments significantly in the second half of 2025 to meet escalating artificial intelligence demands, potentially unlocking growth for supply chain players. GF Securities adds that the third quarter should mark a return to normal IDC bidding activity among major domestic firms. Diesel generator prices have remained stubbornly high despite recent lulls, reflecting unchanged supply-demand fundamentals and hinting at a phase of price hikes and profit realization later this year.

Guotai Junan Securities earlier highlighted soaring demand for high-end diesel generators, driven by China's robust AIDC and data center expansion. Overseas giants like Cummins are reaping benefits, with their power systems units reporting strong revenue and margin gains. Chongqing Machinery & Electric's deep-rooted partnership with Cummins, beginning in 1981, evolved into a 50-50 joint venture—Chongqing Cummins Engine Co., Ltd.—in 1995. Today, this collaboration positions Chongqing Cummins as a top-tier manufacturer of high-horsepower engines domestically.