GEV/ABB results reinforce the view of an upward cycle in Asian power equipment
AI summary card
GEV/ABB results reinforce the view of an upward cycle in Asian power equipment
J.P. Morgan believes that the strong performance of GEV and ABB in data centers, electrification, HVDC, and gas turbine orders has positive read-through implications for power equipment companies in Korea, China, and India.
- GEV 1Q26 electrification orders reached US$7.1 billion, above J.P. Morgan's forecast of US$4.4 billion, with a book-to-bill ratio of about 2.4x, and segment backlog rose to US$42.4 billion.
- GEV's data center-related orders reached US$2.4 billion in 1Q26, already exceeding the full-year FY25 total in a single quarter, indicating exceptionally strong demand for data center power infrastructure.
- ABB electrification orders grew 44% organically, and data center orders achieved triple-digit growth, reinforcing the positive demand outlook for low- and medium-voltage electrical equipment.
- GEV's HVDC backlog is close to US$10 billion, with strengthening momentum in Asia, benefiting Korean, Chinese, and Indian companies with HVDC exposure.
- The report believes that although valuations are being questioned by investors, the structural and sustainable upcycle is still in its early stages, and investors should not take profits too early on quality names.
Report interpretation
Overview
This report uses the latest results from GE Vernova and ABB as a starting point to assess their read-through implications for Asian power equipment companies. The core conclusion is that data center electricity demand, US transmission and distribution demand, HVDC projects, and demand for gas turbines/grid connection equipment together support the continuation of the power equipment cycle, and Asian peers are expected to benefit in high-voltage transformers, switchgear, low- and medium-voltage electricals, HVDC, and data center power supply solutions.
Core views
The report believes the market already fully recognizes the structural tailwinds in the power equipment industry, but the orders, margins, and new demand data from GEV and ABB further validate the strength of demand. GEV electrification orders and EBITDA margin significantly exceeded expectations, while ABB data center orders posted triple-digit growth, indicating that demand for data centers, transmission and distribution, and high-voltage equipment has not slowed. J.P. Morgan recommends investors continue holding quality power equipment names to capture earnings upgrades and compounding returns, rather than taking profits too early due to valuation pressure.
Analysis framework
The report uses an earnings read-through approach, mapping changes in GEV and ABB's 1Q26 orders, backlog, margins, data center demand, HVDC projects, and gas turbine capacity reservations onto Asian power equipment companies across the value chain, including HD Hyundai Electric, Hyosung Heavy Industries, LS Electric, Nari Technology-A, Xuji Electric-A, and GE Vernova T&D India.
Methodology notes
Infer regional peer demand and earnings trends through the order and margin performance of global leaders.
The report maps GEV and ABB's strong orders, backlog, margin improvement, and growth in data center orders to potential opportunities for orders, capacity expansion, and earnings upgrades among power equipment companies in Korea, China, and India.
A structural upcycle driven jointly by data centers, transmission and distribution upgrades, HVDC, and on-site power generation.
The report argues that current power equipment demand is not a short-term fluctuation, but is supported by large-scale upgrades in data center power architecture, grid investment, and tight supply of high-voltage equipment.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- GE Vernova (GEV.US)Source of earnings read-through and global power equipment leader
- Strengths
- Electrification orders, data center orders, HVDC backlog, and gas turbine reservations all showed strong performance, and margin guidance was raised.
- Weaknesses
- Valuation may be questioned by investors, and part of the demand realization depends on multi-year delivery cycles.
- Comparison
- Compared with Asian peers, GEV directly reflects the intensity of global demand for data centers, transmission and distribution, and gas turbines.
- Risks
- Order delivery timing, capacity expansion, pricing sustainability, and fluctuations in data center demand.
- ABB (ABBN.SW)Source of earnings read-through and validator of low- and medium-voltage electrical demand
- Strengths
- Electrification orders grew 44% organically, data center orders posted triple-digit growth, and medium-voltage UPS has differentiated advantages.
- Weaknesses
- The report assigns an N rating, implying that relative return potential may be less compelling than OW-rated names.
- Comparison
- ABB is better positioned to validate demand for low- and medium-voltage electrical equipment and upgrades in data center power architecture.
- Risks
- A slowdown in data center order growth from a high base, intensifying competition, and execution risk.
- HD Hyundai Electric (267260.KS)Asian beneficiary in high-voltage power equipment
- Strengths
- Expansion in high-voltage transformer and switchgear businesses, benefiting from favorable pricing and operating leverage.
- Weaknesses
- Share price and valuation have already risen significantly, and investors may remain focused on valuation pressure.
- Comparison
- Similar to GEV's electrification margin expansion logic, both benefit from demand for high-voltage equipment and improving backlog.
- Risks
- Pace of new capacity additions, decline in order pricing, and fluctuations in Korean export demand.
- Hyosung Heavy Industries (298040.KS)Asian beneficiary in high-voltage equipment and potential HVDC
- Strengths
- Strong demand for high-voltage transformers and switchgear, with earnings likely to benefit from pricing and capacity utilization.
- Weaknesses
- Historically strong share price performance has raised the bar for valuation and earnings delivery.
- Comparison
- Along with HD Hyundai Electric, it is one of the core Korean beneficiaries in high-voltage equipment.
- Risks
- Execution of capacity expansion, customer concentration, project delivery, and exchange-rate fluctuations.
- LS Electric (010120.KS)Beneficiary in low- and medium-voltage electrical equipment for data centers
- Strengths
- Has product supply capabilities from low voltage to high voltage and continues to win data center-related switchgear and transformer orders.
- Weaknesses
- The report rates it N, indicating a more balanced risk-reward profile than OW-rated names.
- Comparison
- Compared with high-voltage transformer companies, LS Electric is more directly exposed to demand for low- and medium-voltage products, power management, and integrated data center solutions.
- Risks
- Sustainability of data center orders, competitive landscape, and margin delivery.
- Nari Technology-A (600406.SS)Potential Chinese beneficiary in HVDC and grid equipment
- Strengths
- Has HVDC exposure and may benefit from the Asian HVDC pipeline and potential export opportunities.
- Weaknesses
- The read-through logic is relatively indirect and requires follow-up order validation.
- Comparison
- Compared with Korean equipment companies, Nari is more aligned with China's grid automation and HVDC technology chain.
- Risks
- Uncertainty in export projects, pace of domestic grid investment, and valuation volatility.
- Xuji Electric-A (000400.SZ)Potential Chinese beneficiary in HVDC and high-voltage electrical equipment
- Strengths
- Has relevant HVDC exposure and may benefit from Asian projects and export demand.
- Weaknesses
- The report does not provide detailed company-level financial forecasts, so the investment conclusion depends on industry read-through.
- Comparison
- Like Nari, it represents China's HVDC opportunity set, but actual earnings leverage depends on orders and product mix.
- Risks
- Project awards, delivery cycles, price competition, and policy timing.
- GE Vernova T&D India Limited (GETD.NS)Indian read-through beneficiary of GEV orders and HVDC opportunities
- Strengths
- Expected to benefit from increased export assignments from GEV and domestic HVDC orders in India.
- Weaknesses
- Affected by GEV's internal order allocation and the pace of domestic Indian projects.
- Comparison
- Compared with Korean and Chinese companies, this company is more directly linked to GEV's global supply chain and Indian grid investment.
- Risks
- Execution of export assignments, securing domestic Indian orders, and execution risk.
Key data
- GEV 1Q26 electrification ordersUS$7.1 billionAbove J.P. Morgan's forecast of US$4.4 billion, with a book-to-bill ratio of about 2.4x.
- GEV electrification backlogUS$42.4 billionDriven by demand for grid equipment such as substations, HVDC, switchgear, and transformers.
- GEV electrification EBITDA margin17.8%Expanded 590 basis points year over year, with FY26 margin guidance raised to 18%-20%.
- GEV data center ordersUS$2.4 billionData center electrification orders in 1Q26 alone exceeded the full-year FY25 total.
- GEV HVDC backlogabout US$10 billionMainly located in Europe, but momentum in Asia is strengthening, and another large HVDC order was secured this quarter.
- ABB electrification order growth44% organic growthSignificantly above J.P. Morgan's forecast of 8.7% and consensus expectations of 12.5%.
- ABB data center orderstriple-digit growthProducts such as medium-voltage UPS are benefiting from the future trend toward 800V DC architecture.
- GEV gas turbine backlog and reservations100GWIncreased from 83GW to 100GW, with only about 10GW of combined capacity remaining for 2029/2030.
- Potential demand for on-site data center power generationabout 90GWEstimated from on-site power generation demand within a total pipeline of about 190GW.
Impact & implications
For the Asian power equipment sector, the results of GEV and ABB reinforce three investment themes. First, data center demand is spreading from low voltage to high voltage and from grid connection equipment to on-site generation, benefiting LS Electric and Chinese low-voltage and switchgear companies. Second, ongoing US transmission and distribution and high-voltage equipment demand supports orders and margins for HD Hyundai Electric and Hyosung Heavy Industries. Third, rising HVDC backlog and momentum in Asian projects create medium-term opportunities for Nari, Xuji, Korean companies expanding in HVDC, and GE Vernova T&D India.
Risks
- Valuations of power equipment names have risen significantly, and if earnings upgrades slow, a correction may follow.
- If demand for data center power infrastructure falls short of expectations, the order read-through for low-, medium-, and high-voltage equipment will weaken.
- HVDC projects have long delivery cycles, and there is uncertainty around regional project progress, approvals, and award timing.
- New capacity may enhance long-term revenue visibility, but also brings risks related to capital expenditure, utilization, and supply-demand rebalancing.
- If supply chain tightness in gas turbines, transformers, and switchgear eases, pricing and margin expansion may slow.
- The report discloses that J.P. Morgan has market-making, client service, or non-investment banking compensation relationships with some covered companies, and investors should pay attention to potential conflict-of-interest disclosures.
What to watch
- Whether GEV's subsequent electrification orders, backlog, and FY26 margin guidance continue to be revised upward.
- Whether ABB's triple-digit growth in data center orders can continue, and the adoption progress of medium-voltage UPS and 800V DC architecture.
- Whether Korean power equipment companies secure more data center and high-voltage equipment orders in the coming quarters.
- Evidence of supply participation by Chinese HVDC and low-voltage/switchgear companies in US and Asian data center projects.
- New Asian projects in GEV's HVDC backlog, delivery timing, and export assignment allocation to GE Vernova T&D India.
- Gas turbine capacity reservations for 2029/2030, pricing momentum, and changes in demand for on-site data center power generation.