Investment Rating - Investment rating: Positive (maintained) [1] Core Insights - The silicon photonics era is accelerating, with leading companies showcasing competitive advantages and numerous new technologies creating investment opportunities [5][12] - The communication industry is experiencing continuous upgrades, with the demand for AI computing driving growth in the optical communication sector [5][12] - The 26th China International Optoelectronic Exposition (CIOE 2025) highlighted the maturity and market focus on silicon photonics technology, which is becoming the mainstream solution for 1.6T high-speed optical modules [5][12] Summary by Sections 1. Investment Outlook - The report emphasizes the competitive advantages of leading companies in the silicon photonics era and the emergence of new technologies such as OCS, hollow-core fibers, thin-film lithium niobate, and CPO [12] - The 800G optical module has become mainstream, with 1.6T expected to ramp up production imminently [13][14] - The report identifies key investment targets including Zhongji Xuchuang, NewEase, and Tianfu Communication, with beneficiaries including Huagong Technology and Guangxun Technology [7][14] 2. Optical Modules - Zhongji Xuchuang has begun mass production of 1.6T optical modules and is developing 3.2T products, while NewEase has significantly ramped up its 1.6T module supply to overseas clients [13][14] - The report notes that 800G has become the mainstream technology, with many manufacturers actively preparing for 3.2T technology [14] 3. Silicon Photonics Technology - The report highlights the rapid development of silicon photonics technology, with increasing market attention and maturity for OCS, CPO, and thin-film lithium niobate technologies [19][20] - Companies like Huagong Technology are advancing their CPO technology, showcasing integrated chips with low power consumption and high bandwidth density [19][20] 4. Optical Chips - The demand for CW laser chips is increasing, with companies like Yuanjie Technology successfully mass-producing CW70mW laser chips [25] - Long光华芯 has released a 200mW Uncool CW DFB optical communication chip to support the silicon photonics integration needs of 800G and 1.6T optical modules [25] 5. Cables - The report notes the gradual advancement of optical and copper cable solutions, with hollow-core fibers gaining attention [27] - Long飞公司 demonstrated a 100km hollow-core fiber link with a low attenuation of 0.089dB/km [27] 6. Investment Recommendations - The report suggests focusing on seven key industry directions for investment, including network equipment, AIDC data center construction, IT equipment, computing power leasing, cloud computing platforms, AI applications, and satellite internet & 6G [31][32] - Recommended targets for optical modules and devices include Zhongji Xuchuang, NewEase, and Tianfu Communication, with beneficiaries such as Yuanjie Technology and Huagong Technology [31][32]

Investment Rating - The industry investment rating is "Overweight" (maintained) [1] Core Insights - Century Internet has received a 40MW wholesale order from a leading internet company, which will be delivered in phases, focusing on customized services and the deployment of domestic chips, indicating that domestic chips will be a key growth driver for the company's IDC business in the future [1] - As the supply of domestic chips gradually increases, the demand for AIDC (Artificial Intelligence Data Center) is expected to continue rising, leading to sustained order releases in AIDC [1] Summary by Sections AI Chips, Servers, and Power Supplies - Recommended stocks: ZTE Corporation; Beneficiary stocks: Haiguang Information, Cambricon, Chipone Technology, Inspur Information, Huaqin Technology, and Oulu Tong [3] AIDC Data Centers - Recommended stocks: Guanghuan New Network, Aofei Data, Xinyi Network Group, Runze Technology, and Baoxin Software; Beneficiary stocks: Dawi Technology, Global Data, Century Internet, Kehua Data, Dataport, and Dongyangguang [3] Liquid Cooling and Air Cooling - Recommended stocks: Invec; Beneficiary stocks: Shenling Environment, Kehua Data, Tongfei Co., Yilun Co., and Sixuan New Materials [3] Optical Communication - Recommended stocks: Zhongji Xuchuang, Xinyi Sheng, and Tianfu Communication; Beneficiary stocks: Huagong Technology, Guangxun Technology, Yuanjie Technology, Changguang Huaxin, Shijia Photon, Dongshan Precision, Zhishang Technology, Taichen Light, Changxin Bochuang, and Changfei Fiber [3] Switches & Chips - Recommended stocks: ZTE Corporation, Unisoc, and Shengke Communication; Beneficiary stocks: Ruijie Networks [3] HVDC & Diesel Generators - Beneficiary stocks: Kehua Data, Zhongheng Electric, Tonghe Technology, KOT Power, and Weichai Heavy Machinery [3] Computing Power Leasing - Beneficiary stocks: Hongjing Technology, Runjian Co., Zhiwei Intelligent, Capital Online, Hainan Huatie, and Youfang Technology [3]

Investment Rating - The industry investment rating is "Positive" (maintained) [2] Core Insights - The release of the Rubin CPX inference chip by Nvidia emphasizes cost-effectiveness and is designed specifically for large-scale context AI models, providing 20 PFLOPS of computing power with a memory bandwidth of 2TB/s, significantly reducing memory costs by over 50% by switching from HBM to GDDR7 [5][6] - The introduction of the Rubin CPX chip expands the VR200 server architecture into three versions, which is expected to create new opportunities in the supply chain, particularly increasing demand for PCB and copper cable connectors due to the complexity of interconnections [6][7] Summary by Sections Industry Investment Rating - The report maintains a "Positive" rating for the industry, indicating expectations for the industry to outperform the overall market [2] Nvidia Rubin CPX Chip - The Rubin CPX chip is designed for two critical stages of AI inference: Prefill and Decode, with a focus on maximizing computational throughput while minimizing memory bandwidth waste [5] - The chip features a design that prioritizes computational FLOPS over memory bandwidth, making it suitable for high-demand AI applications [5] Supply Chain Opportunities - The new architecture introduced by the Rubin CPX chip is anticipated to generate additional demand in the supply chain, particularly for PCB and copper cable connectors, as the complexity of interconnections increases [6][7] - Beneficiary companies in the PCB segment include Huadian Co., Shenghong Technology, and others, while copper cable connector beneficiaries include Huafeng Technology and others [7]

Quantitative Models and Construction Methods - **Model Name**: Chip Return Feature **Model Construction Idea**: The chip structure estimates the average holding cost of investors at different price levels, and the chip return measures the profitability of the current price relative to historical chip costs. It reflects the market's profit-making effect, which exhibits momentum effects in strong markets and reversal effects in weak markets[24] **Model Construction Process**: The chip return is calculated as the return rate of the current price relative to the historical chip cost. The detailed methodology is elaborated in the research team's report "Fusion of Momentum and Reversal from the Perspective of Chip Structure"[24] **Model Evaluation**: The model effectively captures the market's profit-making effect and provides insights into momentum and reversal dynamics[24] Model Backtesting Results - **Chip Return Feature**: Current profit-making effect of the solid-state battery index is 11.11%[5][25][26]

Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Viewpoints - The report emphasizes the potential of space-based computing, highlighting the launch of the "Three-Body Computing Constellation" which includes 12 satellites capable of in-orbit data processing, thus overcoming traditional data transmission limitations [4][5] - The satellites are equipped with advanced computing capabilities, achieving a maximum single-satellite computing power of 744 TOPS and a total constellation computing power of 5 POPS, with plans for over 50 satellites by 2025 [5] - The report suggests that the integration of AI in space will significantly enhance data processing efficiency and open new avenues for applications in astronomy and other fields [4][5] Summary by Sections Industry Overview - The report discusses the ongoing investment wave in AI computing, particularly in the context of space applications, driven by advancements in satellite technology [3] Technological Advancements - The "Three-Body Computing Constellation" aims to create a comprehensive space-based intelligent computing infrastructure, with a target total computing power of 1 EOPS, which is expected to surpass most ground-based data centers [5] Investment Opportunities - The report recommends investment opportunities in space computing, identifying key beneficiaries such as Putian Technology, China Science and Technology Star, and Aerospace Hongtu [6]

Inflation Data Summary - The U.S. CPI for August 2025 increased by 2.9% year-on-year and 0.4% month-on-month, exceeding market expectations[2] - Core CPI rose by 3.1% year-on-year and 0.3% month-on-month, aligning with market expectations[2] Inflation Trends - Overall inflation has rebounded, while core inflation remains stable, indicating a clearer impact from tariffs on U.S. inflation[3] - Energy inflation turned positive with a 0.2% year-on-year increase, while food prices rose by 3.2%, up 0.3 percentage points from July[3][18] - Core goods inflation increased by 0.37 percentage points to 1.54% year-on-year, while core services saw a slight decline of about 0.05 percentage points[3][21] Future Outlook - The rebound in inflation may be temporary, with core inflation expected to trend downward due to high base effects and stable tariff policies[3][33] - The Federal Reserve is likely to cut rates by 25 basis points in September 2025, with a total of three rate cuts anticipated for the year[5][44] Market Implications - The Fed's economic forecasts and rate cut paths will significantly influence asset prices, especially in light of labor market risks and inflation expectations[5][43] - If the Fed raises inflation forecasts while lowering economic growth expectations, market risk appetite may be suppressed, affecting short-term Treasury yields[5][43]

Group 1 - The report highlights the recent performance of the Hong Kong stock market, indicating a moderate upward trend since the impact of "reciprocal tariffs" in 2025, although its relative performance compared to A-shares has weakened due to tightening liquidity and competitive pressures in the internet sector [6][9][10] - The report identifies three main reasons for the underperformance of Hong Kong stocks relative to A-shares: tightening of the monetary policy by the Hong Kong Monetary Authority, delayed expectations for interest rate cuts by the Federal Reserve, and intensified competition among major internet platforms [6][9][10] - The report suggests that the relative advantage of Hong Kong stocks is beginning to emerge as A-shares enter a valuation digestion phase, with potential inflows into Hong Kong stocks providing valuation support [10][12] Group 2 - The report provides insights into the import and export data for August 2025, noting a year-on-year increase in imports by 1.3% and exports by 4.4%, with a trade surplus growth of 11.8% [7][14][16] - It mentions that the import value is at the mid-range of the past five years, while the export value is at a high point, indicating a stable growth trend in foreign trade [15][16] - The report emphasizes the performance of specific sectors, highlighting that high-tech products and machinery are key drivers of export growth, while certain categories like agricultural products and labor-intensive goods have shown declines [15][16] Group 3 - The report discusses the introduction of the Rubin CPX GPU by NVIDIA, which is expected to significantly enhance demand for optical modules and liquid cooling solutions, indicating a positive outlook for the optical communication and liquid cooling sectors [19][20] - It identifies key investment opportunities in the optical module and liquid cooling markets, recommending specific companies that are likely to benefit from the increased demand driven by advancements in AI and cloud computing [19][20][21] - The report highlights Oracle's strong performance in cloud services, with a notable increase in revenue and a significant backlog of cloud contracts, reflecting robust demand for AI and cloud infrastructure [20][21]

Investment Rating - The industry investment rating is "Overweight" (maintained) [1] Core Insights - The launch of the Rubin CPX by NVIDIA is expected to enhance AI application inference and reduce inference costs, which may lead to increased demand for network interconnectivity and liquid cooling solutions, thus positively impacting the optical communication and liquid cooling sectors [4] - Oracle's strong performance in cloud business, with a revenue increase of 27% year-on-year, indicates robust demand for AI services, further supported by significant contracts with leading AI companies [5] - The report highlights a positive outlook for the global AI computing power supply chain, recommending various companies in sectors such as optical modules, liquid cooling, and AI chips [6] Summary by Sections Industry Overview - The report emphasizes the growth potential in the optical communication and liquid cooling sectors due to advancements in AI technologies and infrastructure [4][5] Key Developments - NVIDIA's Rubin CPX offers significant computational power, with 30 Pflops NVFP4 precision and 128GB GDDR7 memory, which is expected to drive demand for AI applications [4] - Oracle's cloud revenue reached $14.9 billion, with a notable increase in cloud infrastructure revenue by 54% year-on-year, indicating a strong market for AI-related services [5] Investment Recommendations - Recommended stocks in the optical module sector include Zhongji Xuchuang and Xinyi Technology, while liquid cooling recommendations include Yingweike [6] - The report identifies potential beneficiaries in various segments, including AI chips, servers, and data centers, suggesting a broad investment opportunity across the AI computing ecosystem [6]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][3] Core Insights - In H1 2025, the company achieved a net profit attributable to shareholders of 67 million yuan, representing a year-on-year increase of 40.33%. The total operating revenue reached 344 million yuan, up 13.12% year-on-year. The growth is attributed to significant increases in all major product categories and successful overseas expansion [3][4] - The company has adjusted its profit forecast for 2025-2027, expecting net profits of 145 million yuan, 186 million yuan, and 201 million yuan respectively, with corresponding EPS of 1.22 yuan, 1.56 yuan, and 1.69 yuan. The current stock price corresponds to P/E ratios of 33.6, 26.2, and 24.2 for the respective years [3][4] Financial Performance Summary - In H1 2025, the company reported revenue from specialized oil cylinders for dump trucks of 86.18 million yuan, a year-on-year increase of 25.95%, with a gross margin of 25.78%, up 2.62 percentage points. The mechanical equipment cylinder revenue was 183 million yuan, a 3.96% increase, with a gross margin of 26.34%, up 4.15 percentage points. The oil-gas spring revenue reached 63.48 million yuan, a 21.40% increase, with a gross margin of 49.73%, up 7.28 percentage points [4][5] - The company plans to collaborate with Pangu Intelligent to develop hydraulic cylinders for wind power, leveraging complementary technologies and industry synergies [5] Financial Projections - The financial projections for the company are as follows: - Operating revenue (million yuan): 2023A: 669, 2024A: 629, 2025E: 781, 2026E: 968, 2027E: 1,087 - Net profit attributable to shareholders (million yuan): 2023A: 79, 2024A: 109, 2025E: 145, 2026E: 186, 2027E: 201 - EPS (yuan): 2023A: 0.67, 2024A: 0.91, 2025E: 1.22, 2026E: 1.56, 2027E: 1.69 [7][9]

Group 1: Background and Logic of Hong Kong Stock Market Recovery - The Hong Kong stock market has shown a "healthy" moderate upward trend since the impact of "reciprocal tariffs" in 2025, but its relative performance compared to the A-share market has weakened significantly due to three main reasons: (1) The Hong Kong Monetary Authority's continuous tightening of the monetary environment, with the 3-month HIBOR rising from 1.62% at the beginning of August 2025 to 3.30% by the end of the month, an increase of approximately 168 basis points, and the 1-month HIBOR rising from 0.99% to 3.30%, an increase of about 230 basis points, which directly suppresses the financing costs of some leveraged funds; (2) The failure of the July interest rate cut expectations overseas, with the Federal Reserve's easing expectations postponed to September, and the resilience of the overall non-farm employment data in June, leading to a withdrawal of rate cut trades and an increase in U.S. Treasury yields, delaying the pace of global liquidity improvement; (3) The intensified competition among internet e-commerce platforms represented by Meituan, Alibaba, and JD.com has suppressed profit expectations, while the A-share market has rapidly spread the profitability effects driven by AI and other industrial chains, further amplifying the performance gap between the Hong Kong and A-share markets [1][2][3] Group 2: Opportunities for Relative Recovery of Hong Kong Stocks - The current A-share market is gradually entering a valuation digestion phase, highlighting the relative advantages of the Hong Kong stock market: (1) From a liquidity perspective, Powell's dovish signals at the Jackson Hole meeting indicate that monetary policy may enter a loosening cycle, coupled with a significant downward revision of non-farm employment data (a reduction of 910,000 jobs for the year ending March 2025), reinforcing market expectations for a Federal Reserve rate cut. In this context, global investors may reassess the relative attractiveness of various markets, and if some funds flow into the Hong Kong stock market, it could provide support for its valuation [2]; (2) From the perspective of industrial investment and profitability effects, funds are seeking "outlets" for AI hardware and applications, and the Hong Kong internet sector is in a potentially beneficial position. Alibaba continues to increase its self-research investment in AI chips, strengthening its voice in the core computing power segment [3] Group 3: Investment Recommendations - As the A-share market enters a valuation digestion phase, the warming expectations for Federal Reserve easing provide marginal support for Hong Kong stock valuations. The relative advantages of quality assets in the Hong Kong stock market are expected to gradually emerge. The Hong Kong internet sector has two major highlights: firstly, the self-research of AI chips and the expansion of cloud business continuously strengthen performance certainty; secondly, current valuations are in a recovery range, with potential to attract incremental funds. On this basis, the overall valuation of the Hong Kong stock market is extremely low, asset quality is excellent, and the intensity of corporate dividends and buybacks is increasing. Coupled with the gradually loosening external liquidity environment, proactive foreign capital is expected to start flowing in. It is recommended to focus on the Hong Kong internet, consumption, pharmaceuticals, and resilient non-bank financial sectors during this phase to capture the dual benefits of profit elasticity and valuation recovery [4]