Citic Securities: Firm Optimism on the Overseas Expansion of Domestic Gas Turbines

The research report from Citic Securities stated that according to a report released by Deutsche Bank, it is expected that global gas turbine orders will peak in 2026, and will decline from 2027 onwards. In addition, the promotion of supplementary solutions such as SOFC and fuel cells may lead to oversupply after 2030. Citic Securities believes that expanding production is not as easy as imagined, and the supply side may not necessarily grow as expected. Predictions for the supply side cannot be simply extrapolated linearly, as it takes time for industry expansion plans to develop stable delivery capabilities, and the differences in delivery capabilities among different manufacturers, types of machines, and regions are significant. Constraints on the delivery of heavy gas turbines come from various aspects such as engine heads, high temperature core components, long cycle forgings, supply chain support, complete integration, and on-site engineering. Domestic gas turbines themselves are important supplementary routes to fill the gap, equivalent to new routes such as SOFC + engines: Overseas discussions on faster delivery technology routes for SOFC, engines, and other technologies. On one hand, some routes are still in the early stages of adoption and there is still a lot of uncertainty. On the other hand, domestic gas turbines are an important supplement with shorter delivery times. In the worst-case scenario, if global gas turbine orders decline, domestic gas turbine orders will not decline. We can only see that the industry still maintains high prosperity, domestic gas turbine orders continue to grow, delivery cycles remain long, and effective supply remains tight.