Yingliu Co. Sees Strong Demand for Gas Turbine Blades, Improved Pricing, and Active Capacity Expansion

Overview

This report is a summary of Goldman Sachs' 2026 AI Data Center and Power Supply Virtual Corporate Day, focusing on gas turbine blade suppliers Yingliu Co. and Wedge. The core conclusion is that demand for gas turbine blades remains robust, driven by U.S. AI data center power needs and global OEM capacity constraints. Yingliu Co., as a leading high-end casting supplier, is well-positioned to capture spillover demand due to its capacity, cost, and R&D advantages. The report maintains a Buy rating for Yingliu Co. with a target price of RMB 92, citing its potential for margin improvement through product mix optimization and scale expansion.

Core views

Demand remains strong with notable structural differentiation. Yingliu Co. excels in heavy-duty gas turbines, accounting for 63% of Q1 2026 orders, while Wedge performs well in light-duty turbines. Yingliu's Q1 2026 order intake reached RMB 840 million, with overseas orders at around RMB 700 million. By the end of April, order intake exceeded RMB 1 billion, with a backlog of RMB 2.11 billion. Pricing and profitability trends are improving. Yingliu's new order prices have slightly increased since March, and while margin recovery may lag delivery, the overall pricing structure is improving with new orders. Wedge employs a fixed-margin pricing model, effectively passing on rising raw material costs. Its high-temperature alloy revenue grew over 40% YoY in Q1 2026, with gross margins around 30%. Aggressive capacity expansion plans. Yingliu has raised its 2030 capacity guidance to over RMB 6 billion, with accelerated equipment deployment in H2 2026 likely to boost current-year capacity. Capex for the next two years is estimated at RMB 300-500 million. Wedge plans to reach capacity of RMB 1.7-1.8 billion by end-2026 and RMB 5.5-6 billion by 2030, with a CAGR of 30-40%. Limited competition and ample growth space. The two suppliers overlap partially with customers like Siemens Energy but serve different models. Market growth can accommodate Yingliu's heavy-duty positioning and Wedge's light-duty and aerospace focus. Yingliu's global share is below 1% and is expected to remain single-digit by 2030, but as a complementary supplier to Western incumbents, it has a long growth runway.

Analysis framework

The report uses a supply-demand framework to analyze industry trends, identifying U.S. AI data center (AIDC) power demand as a key driver, with ~60% expected to come from gas turbines. It also examines severe capacity constraints faced by global OEMs (e.g., Siemens Energy, GE Vernova), noting that blades are a critical bottleneck due to strict metallurgical requirements and Western suppliers (e.g., PCC, Howmet) prioritizing aerospace. Under this logic, Yingliu Co. is positioned to capture spillover demand due to available capacity, lower ASPs, comparable quality, and strong R&D and customer relationships. Valuation employs a 2030 forward P/E discounting method to reflect long-term growth value.

Methodology notes

• Industry Analysis FrameworkSupply-demand framework

  Supply-Demand Analysis

  The report analyzes downstream AI data center power demand (demand side) and global OEM capacity and blade supply bottlenecks (supply side) to assess industry trends and company benefits.

• Valuation methodsPE/PEG valuation

  Forward P/E Discounting

  The report calculates the target price by discounting a 2030 forward P/E (30x) back to 2027, suitable for long-term valuation of high-growth companies.

• Competition & Strategy FrameworkMoat / competitive advantage

  Supply Chain Bottlenecks & Substitution Effects

  The report highlights supply bottlenecks due to metallurgical requirements and labor shortages among Western suppliers, positioning Yingliu as a complementary supplier with capacity and cost advantages.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Yingliu Co. (603308.SS)

  Benefit: Captures global OEM spillover demand, driven by AI data center power needs

  Strengths

  Available capacity, lower ASP, comparable quality, strong R&D and customer ties

  Weaknesses

  Remains a complementary supplier to Western incumbents, single-digit global share

  Comparison

  Focuses on heavy-duty turbines, differentiating from Wedge's light-duty focus

  Risks

  Slower-than-expected capacity ramp, weaker order growth, AIDC demand slowdown

• Wedge (000534.SZ)

  Benefit: Light-duty turbine and aerospace demand growth, fixed-margin pricing model

  Strengths

  Fixed-margin orders pass through costs, expected 50% share in commercial engine blades

  Weaknesses

  Not covered in detail, limited financial projections

  Comparison

  Focuses on light-duty turbines and aerospace, complementary to Yingliu's heavy-duty focus

  Risks

  Execution risks in capacity expansion, raw material price volatility

Key data

• Q1 2026 Order IntakeRMB 840 millionOverseas ~RMB 700 million, heavy-duty gas turbines account for 63%
• BacklogRMB 2.11 billionAs of end-Q1 2026, overseas ~80%
• 2030 Capacity GuidanceOver RMB 6 billionYingliu's revised capacity target
• 12-Month Target PriceRMB 92.0Based on 2030E P/E 30x discounting
• 2025E-30E Sales/Profit CAGR29%/51%Goldman Sachs estimates
• Wedge 2026E Capacity PlanRMB 1.7-1.8 billionVs. expected revenue of RMB 700-800 million

Impact & implications

The report suggests this opens long-term growth runways for related companies. Yingliu Co., with a global share below 1%, can achieve high sales and profit growth by capturing spillover demand amid Western OEM capacity constraints. Product mix improvement, scale expansion, and asset turnover will drive margin, net profit, and ROE expansion over the cycle. For the industry, gas turbine blades are a key bottleneck for AI data center power supply, with capacity and technology-ready suppliers positioned to benefit first.

Risks

• Slower-than-expected capacity ramp due to yield improvements or technician hiring delays
• Long new SKU development cycles leading to weaker order intake growth
• Hyperscale data centers canceling gas turbine orders, weakening AIDC demand

What to watch

• Progress in Siemens Energy's new North American turbine R&D design and pricing finalization
• 4000F prototype development submission and bulk order negotiations
• Dongfang Electric's G50 platform blade tender participation
• Commercial engine CJ-1000 model certification and blade share acquisition progress