[Electrical Equipment Stock Analysis] Dongfang Electric rose 7% yesterday, then fell back 2% today. Analysis: Optimistic about power equipment stocks. AI development and energy demand are expected to keep the power gap at least until 2030.

Power equipment stocks failed to take over the upward momentum from the previous day. Dongfang Electric （01072） The company’s last-year results increased profits by 31% and also paid out an increased final dividend. After the share price rose 7.8% on Wednesday, it gave back more than 2% on Thursday. Shanghai Electric （02727） , Harbin Electric （01133） Last year profits rose by 60% and 58% respectively, and the share price also softened by 2% to 4% on Thursday.

A securities analyst said on this newspaper’s video program that he is optimistic about the long-term investment trend in the power equipment industry. This is because the development of AI and the growth in energy demand are expected to keep the power supply gap at least going through 2030. “With more pressure to increase power generation demand, power generation companies naturally need to purchase equipment earlier,” so the past period has driven up related shares. After a recent pullback, current valuations are not particularly expensive, but the P/E ratios of individual stocks are more than 20 times, and valuations may have further room to decline.

The analyst believes that the three major power equipment stocks had strong earnings drivers last year, and he expects growth to remain sustainable until 2026. Investors may consider making long-term allocations during the recent share-price pullbacks. He is more bullish on Dongfang Electric because the company’s business has multiple growth drivers, especially with a high proportion in the nuclear power equipment sector. Its earnings growth also accelerated in the second half of last year, which is worth looking up another level. He is also bullish on nuclear-power-related stock China General Nuclear Power （01816） , believing that its results help support the current valuation. He is also bullish on another energy-equipment stock China Energy Engineering （03996） , saying that its products help improve power supply stability.

After power equipment stocks pulled back from their high in March, since the beginning of this year, Dongfang Electric’s share price has still accumulated gains of more than 43%, Harbin Electric has risen more than 25%, China Energy Engineering is up 21%, while Shanghai Electric is down more than 2%.

		Finance Hot Talk
	





	Will the US-Iran conflict turn into a prolonged war? Is the market underestimating the global economic recession risk?