Core Viewpoint - The demand for off-grid power supply in North American data centers is rapidly increasing, leading to the adoption of natural gas medium-speed and high-speed engines as primary power sources [1][2]. Group 1: Industry Trends - The global electricity consumption of data centers is projected to reach approximately 415 TWh in 2024, doubling to 945 TWh by 2030 [2]. - The share of engines used in data centers is expected to rise significantly, from 28.6% in 2020 to 53.7% in 2024, corresponding to a market size of 300 billion RMB, and further to 70.8% by 2030, equating to 1018 billion RMB [4]. Group 2: Company Insights - Wärtsilä, a leader in medium-speed marine engines, holds a market share of about 45% and anticipates a robust annual growth rate of 6% in demand for marine medium-speed engines [1]. - The backlog of orders for Wärtsilä's power generation business is expected to double from 2024 to 2025, reaching 800 million euros [1]. Group 3: Technological Developments - Caterpillar has formed a strategic alliance with AIP and Boyd CAT to secure a multi-billion dollar order for 2 GW of rapid-response natural gas generator sets for the Monarch data center project [3]. - Medium-speed engines are projected to grow from 4 GW in 2024 to 19 GW by 2030, with a compound annual growth rate (CAGR) of 28%, primarily driven by the U.S. market [4]. Group 4: Advantages of Medium-Speed Engines - Medium-speed engines offer several advantages, including shorter delivery times (as fast as 18 months), operational capability in high-temperature and high-altitude environments, and modular design for high availability and redundancy [5][6]. - Cost-effectiveness is highlighted, with capital expenditures (CAPEX) reduced by 20-30% compared to heavy gas turbines, and fuel consumption lower by 20-35% [5].

Investment Rating - The report maintains an investment rating of "Leading the Market-A" for the general machinery sector [1][10]. Core Insights - The demand for power in North American data centers is increasing, leading to opportunities for domestic gas generator replacements and overseas expansion [1][10]. - The global power consumption of data centers is projected to double from approximately 415 TWh in 2024 to 945 TWh by 2030, indicating a significant growth trajectory [5]. - Caterpillar's revenue reached a historical high of $67.6 billion in 2025, with a 71% year-on-year increase in orders, driven by the surge in demand for data center backup power and gas engines [6][10]. Summary by Sections Market Performance - The general machinery sector has shown strong performance over the past year, with significant growth in the energy and power segment, which achieved a revenue of $9.4 billion, a 23% year-on-year increase [2][6]. Data Center Power Solutions - The increasing reliance on off-grid power solutions in data centers is driven by the mismatch between data center construction cycles and grid expansion timelines, necessitating the use of gas engines as primary power sources [5][8]. - Wärtsilä has secured orders for 507 MW of gas engines for data centers in the U.S., highlighting the growing trend of using gas engines for primary power supply [3][7]. Engine Market Dynamics - The share of gas engines in data center power generation is expected to rise from 28.6% in 2020 to 53.7% by 2024, with projections indicating a further increase to 70.8% by 2030, corresponding to a market size of approximately 101.8 billion RMB [8][10]. - The advantages of medium-speed engines include shorter delivery times, operational reliability in various environments, cost-effectiveness, and compliance with low emissions standards [9]. Investment Opportunities - The imbalance in supply and demand for gas engines in overseas markets presents an opportunity for domestic manufacturers to expand internationally [10][11]. - Key companies to watch include Weichai Heavy Machinery and Weichai Power, which have advantages in the North American market and in the production of gas engines [11].