Citi: Jereh’s annual gas turbine capacity reaches 2.5 GW; AIDC integrated orders still await formalization

What has changed with gas turbine capacity expansion and core-unit supply?

Jereh leased a new plant in July and began renovation in August; it is now fully operational, with annual capacity of about 100 units, totaling 2.5 GW. The company intends to retain some capacity for 2027 for potential orders from hyperscalers and its own AIDC integrated power-supply projects. Capacity for 2028 is scheduled to begin sales in the fourth quarter of 2026.
Tight supply is the industry backdrop to the capacity expansion: the report says lead times are about 3 years for standard light gas turbines and more than 5 years for heavy-duty units. Jereh’s gas turbine lead time has lengthened from an initial 26–28 months to 36–42 months. FTAI has committed to exclusively supply at least 2.5 GW of core units annually. Monthly deliveries are expected to begin at 5–10 units in early 2027, reaching 10–15 units per month by year-end 2027, equivalent to an annualized 120–180 units.

The gas turbine generator business has secured seven new sales contracts. Jereh, however, says that although multiple potential AIDC integrated-service projects are progressing, it has not disclosed any formally signed orders. The two businesses are at different stages, and generator contracts should not be equated directly with integrated projects coming to fruition.
The modular production facility in Zhongshan has been completed, and certification of thermal management equipment is set to begin in the second half of 2026; the company has also prepared capacity in advance. Jereh has developed most core components in-house, including energy storage, UPS, EMS and liquid-cooling CDUs. These capabilities are preparations for project delivery, but current order progress remains at the potential-opportunity stage.

Citi says that when core-unit costs rise, Jereh correspondingly raises gas turbine selling prices, passing cost inflation on to customers. When market conditions allow, the company also raises prices proactively beyond the cost increase. In Citi’s view, these two pricing approaches are expected to gradually increase absolute profit per megawatt, rather than merely boost sales.

Citi maintains a Buy rating with a target price of 196 yuan, valuing the shares at 26 times forecast 2027 earnings per share. Based on the share price of 88.27 yuan listed in the report for 5 November, the expected share-price return is 122%. Citi believes a breakthrough in the US AIDC power business, sustained high demand and a shortage of gas turbine supply support a valuation multiple above the average during the US market’s breakthrough period in 2021–22.
This view also has business-specific limits: Citi’s downside risks include lower-than-expected Chinese oil and gas exploration and development spending, a slowdown in shale oil and gas development, and slower-than-expected adoption of electric-drive fracturing.