Siemens Energy: Gas and power grid businesses provide cyclical support, wind power turning point is approaching, reiterate buy (HSBC)
The core logic is that the demand base for the gas services and power grid technology businesses is solid, and Siemens Gamesa is expected to achieve a turning point in profitability.
The core logic is that the demand base for the gas services and power grid technology businesses is solid, and Siemens Gamesa is expected to achieve a turning point in profitability. Higher peer valuation multiples and improved profit margin expectations provide an implied upside of 35%. The recent stock price pullback has partially priced in the risks of approaching quarterly results. Investors are advised to pay attention to its multiple energy equipment business advantages while being wary of the downside risks related to wind power quality and production capacity ramp-up. One-sentence conclusion: Siemens Energy's regular business (gas, power grid) provides a solid safety cushion, while the turnaround of the wind power business (Gamesa) will be the biggest catalyst for the future stock price, and the current valuation provides a favorable entry point. Positive/negative: Positive for Siemens Energy (ENR.GR). The market may have partially digested the short-term risks of the wind power business, but it has insufficient expectations for the stability of the traditional business and Gamesa's profit turning point. Catalyst: Siemens Gamesa's quarterly order and profit report verifies its profit turning point. Major new contract announcement for the Grid Technology business. The extent to which global energy transition policies support investment in gas services and grids.