The world's leading oil service equipment company, can be expected to accelerate breakthroughs overseas in the future. The company is a leading domestic manufacturer of oilfield special equipment and oilfield service provider. Its business scope covers high-end equipment manufacturing, oil and gas engineering and oil and gas field technical services, environmental management, and new energy. Since 2020, oil prices have remained high, and the capital expenditure of oil service companies has continued to rise, and the company's performance has shown a steady upward trend. Currently, global upstream oil and gas capital expenditure remains high, and the performance of overseas oil service companies is recovering. The future crude oil production capacity will expand moderately, and the importance of natural gas extraction and utilization will continue to be highlighted. The company as a whole has benefited from the high upstream boom, and the share of electric drive fracturing in the stock market has increased, and there is still plenty of room for development in the future.

AI data centers are driving a rapid increase in electricity demand, and gas turbines will become an important solution in recent years. As AI technology continues to break through, global data centers have ushered in a period of rapid development. Among them, the US and China are the dominant forces. Since electricity is the majority of data center expenses and costs, and data centers are mostly distributed in some regions, data center power demand will surge in the future, and electricity consumption related to China and the US may double in the next 4-5 years. Among them, the North American power grid infrastructure is relatively weak, and the power gap and pressure are greater. In the short term, North America is rich in natural gas resources and has strong flexibility in generating gas turbines, and it may become an important power supply scheme for new data centers in recent years. Currently, 5MW-50MW gas turbines are in short supply.

Siemens Energy is an authorized complete supplier, and the North American market space is vast and promising. Since 2018, the company has continued to expand its gas turbine generator business and established a deep strategic partnership with Siemens Energy to develop 6MW gas turbine generator sets based on the Siemens SGT-A05 aviation modified gas turbine to deeply serve the domestic market. At the same time, the company developed the 35MW mobile gas turbine generator set “PowerGo2” in the US to serve US oil and gas development customers; starting in 2024, the company expanded power supply services and leasing business to provide integrated solutions for downstream customers. We believe that the company's current gas turbine business mainly serves oil and gas field users, which is beneficial to the company's downstream customer development, especially in the more strategically significant North American market, and can form a unique competitive advantage. At the same time, the turbine products mainly used by 5-50MW gas turbines to power data centers are expected to create another growth pole for the company if it opens up the North American data center market in the future.

Profit forecast: Maintain the company's “gain” rating. We expect that in 2024-2026, the company will achieve operating income of 14.616/16.614/18.557 billion yuan and net profit to mother of 2.745/3.183/3.603 billion yuan. The corresponding PE is 14.80x/12.77x/11.28x, respectively.

Risk warning: Domestic and foreign macroeconomic fluctuations exceed expectations, oil and gas capital expenditure falls short of expectations, market competition intensifies, overseas policy risks, North American market development falls short of expectations, profit forecasts and valuation models fall short of expectations