The analyst rating for DONGFANG ELEC was elevated to "Buy" by BofA Securities due to several key factors:
1. Increased Demand: There has been a noticeable increase in gas turbine inquiries from both emerging and developed countries, driven by the demand for power equipment, particularly from US AI data centers.
2. Capacity and Competitive Advantage: DONGFANG ELEC is the only Chinese gas turbine manufacturer capable of exporting F-class products and has ample capacity, competitive pricing, and shorter delivery times compared to overseas manufacturers, whose delivery periods exceed two years.
3. Revised Profit Forecasts: BofA Securities raised its net profit after tax forecasts for DONGFANG ELEC for 2026 and 2027 by 13% and 30%, respectively.
4. Valuation Method Change: The broker changed its valuation method to a Sum of the Parts (SOTP) valuation based on the price-to-earnings (PE) ratio, which contributed to the increase in target prices for the company's shares.
These factors collectively led to the positive rating and increased target prices for DONGFANG ELEC's H-/A-shares.
