The 2030 gas turbine supply model is revised upward, and the risk of overcapacity in the off-balance sheet market intensifies (Morgan Stanley)
Morgan Stanley has raised its 2030 gas turbine and power solutions supply model to 146GW (originally 135GW), including 82GW for medium and large turbines and 64GW for small turbines/reciprocating engines/fuel cells for the data center aftermarket.
Morgan Stanley has raised its 2030 gas turbine and power solutions supply model to 146GW (originally 135GW), including 82GW for medium and large turbines and 64GW for small turbines/reciprocating engines/fuel cells for the data center aftermarket. This adjustment verified the expansion of production capacity such as GEV and orders from new entrants, but intensified the market's concerns about the imbalance of supply and demand in the off-balance sheet market. The key data is that Morgan Stanley highlights overweighting Siemens Energy and underweighting Wärtsilä, optimistic about the former due to its valuation discount and gas service profit improvement potential. The logic behind it is that the explosive growth in demand for AI computing power is driving investment in power infrastructure, but the small unit market may face overcapacity due to the influx of too many players. The current report does not clearly indicate whether the market has fully priced in this structural change, but concerns about overcapacity are a new negative factor recently. The implication of potential trading is that investors should pay attention to signs of stronger pricing and capacity digestion paths, which are critical to medium-term profit expectations. One-sentence conclusion: AI-driven power demand expansion is a deterministic trend, but we need to be wary of the risk of overcapacity in the off-balance sheet market (small units), and prefer Siemens Energy, which has valuation advantages and healthy profit prospects. Positive/negative: Positive for Siemens Energy (valuation discount + service profit improvement, may not be fully priced in yet); negative for Wärtsilä (cautious rating rating); neutral to positive impact on GEV (capacity expansion validates demand, but competition needs to be paid attention to). The risk of overcapacity in the off-balance sheet market may not yet be fully priced in by the market. Catalysts: 1) Subsequent signing of data center power purchase contracts; 2) Order data and capacity expansion plans announced by various manufacturers; 3) Changes in the competitive landscape and profit margin data of the small turbine/engine market.