Daily Investment Strategy
Daily focus：Dongfang Electric (1072)
The company is benefiting from the rising demand for backup power for US data centers driven by AI. It is in talks with multiple clients to export 15-50MW gas turbine units. The power range of its products is highly compatible with the redundancy requirements of multiple units in industrial parks, and its overseas contract fulfillment capabilities have been verified through a project in Kazakhstan. Against the backdrop of tight global gas turbine capacity and the pre-locked capacity of international leaders, similar AIDC orders in the industry are showing high profitability characteristics of over 100 MW and a gross profit margin of approximately 40%, providing considerable upside potential for the company to enter the North American market and improve its overall profitability. However, risks such as export compliance, raw material costs, and intensified competition still need to be monitored.
The CEWC emphasized a loose monetary policy to stimulate the market and strongly promoted domestic demand.
The CEWC sent a clear signal that the government will maintain a moderately loose monetary policy, flexibly using interest rate and reserve requirement ratio cuts to ensure ample funds, and directing resources towards technology and small and medium-sized enterprises (SMEs). Regarding real estate and local government debt, the government will promote the conversion of unsold housing into affordable housing to stabilize the housing market, while strictly mitigating debt risks. Furthermore, the policy emphasizes a "domestic demand-driven" approach, planning to revitalize the market by increasing residents' income and lifting consumption restrictions. Overall, these measures to stabilize growth and prevent risks will provide positive support for the investment environment.
Hong Kong Stock Connect saw a net inflow of HK$790mn on Thursday, with Meituan (3690) experiencing the largest net inflow at HK$1.28bn, followed by Xiaomi Group (1810). On the other hand, CNOOC (0883) recorded the largest net outflow at HK$520mn, followed by Alibaba (9988).
Leung Kai Tong is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to https://apps.sfc.hk/publicregWeb/indi/ADU276/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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