Caitong Securities Co.,Ltd. has released a research report stating that gas turbines are suitable for regional primary peak regulation and large-scale cluster baseload power supply due to their higher efficiency and lower cost per kilowatt-hour. Overseas heavy-duty gas turbine manufacturers are maintaining restrained expansion, leading to a persistent supply-demand gap. The core reason is that the expansion cycle of leading manufacturers lags behind the surge in demand from data centers and peak regulation. Looking at the three major manufacturers—GE Vernova, Siemens Energy, and Mitsubishi Heavy Industries—order backlogs are full, with production schedules extending to 2029. Benefiting from factors such as the increasing share of natural gas as a clean energy source, growing off-grid power demand from overseas industrial mines, and the explosive growth in data center power demand, the outlook for the entire gas turbine and gas engine industry chain is positive. The main views of Caitong Securities Co.,Ltd. are as follows:

AI power demand is driving the growth momentum for gas turbines and gas engines. Gas turbines, with their minute-level response, serve as the primary baseload power source, while gas engines, with their second-level response, are suitable for peak regulation. Gas turbines are suited for regional primary peak regulation and large-scale cluster baseload power supply due to higher efficiency and lower cost per kilowatt-hour. Reciprocating gas generator sets, with moderate investment and rapid response, meet the backup and peak regulation needs of data centers. An increasing number of North American data centers are adopting gas engines as their primary power source.

For gas turbines, overseas order backlogs for the three major heavy-duty turbine manufacturers extend to 2029, highlighting a significant power supply-demand gap. Overseas manufacturers are expanding cautiously, suggesting the supply-demand gap will persist. Estimated global intent orders for heavy-duty turbines in 2025 exceed 80GW, while actual deliverable capacity is only about 50GW. Mitsubishi Heavy Industries estimates market demand for GTCC combined cycle heavy-duty turbines could be close to 100GW, indicating a significant supply-demand imbalance. The core reason remains the lag between manufacturer expansion cycles and the surge in demand. Production for all three major manufacturers is scheduled through 2029. The peak power shortfall for US data centers by 2028 is projected to reach 42.8GW. Given the difficulty of rapidly scaling ground-based solar, nuclear, or space-based solar power, gas turbines are becoming a core reliance, and supply constraints will continue to create opportunities for alternative technologies.

For gas engines, overseas manufacturers have clear expansion plans, and an increasing number of data centers are using them as a primary power source. Benefiting from strong data center demand, growth in mining truck and off-grid power needs, manufacturers like Caterpillar, Cummins, and Wärtsilä have established differentiated product strategies. Caterpillar aims to double its combined capacity from 25GW in 2024 to 50GW by 2030, having already secured four data center power orders exceeding 1GW in 2025, with data center orders expected to surpass $2 billion in 2026. Cummins focuses on high-speed 95L engines for small-to-medium data center backup and peak regulation, planning to double 95L capacity by 2025, with power generation business production scheduled through 2028. Wärtsilä specializes in medium-speed 50SG engines for large data center baseload power, securing over 1GW in North American data center orders in late 2025 and early 2026, and planning a 35% increase in energy sector capacity by Q1 2028.

Related investment targets include: Gas Engines: WEICHAI POWER Marine Engines: China Shipbuilding Industry Group Power Co., Ltd., Weichai Heavy Machinery Co., Ltd. Gas Turbines: Jereh Group Co., Ltd. Independent Control: Dongfang Electric Corporation Ltd. Core Components: Yingliu Co., Ltd., Himile Mechanical Science And Technology(Shangdong) Co., Ltd., WANZE ENGINEERED MATERIALS Co., Ltd., Liande Power Co., Ltd. Heat Recovery Steam Generators: BOWAY Stainless Steel Welded Pipe Co., Ltd., Xizi Energy Conservation Technology Co., Ltd.

Risk warnings include technology iteration and supply chain risks; fluctuations in downstream demand, policies, and energy prices; and risks of market competition and profit deterioration.