Investment Rating - The report upgrades the investment rating of the company to "Buy" [1] Core Views - The company is a leader in the specialized air conditioning sector, with a strong growth momentum and a comprehensive layout in liquid cooling technology, which is expected to benefit from the AI wave [4][5] - The company has shown steady revenue growth, with a compound annual growth rate (CAGR) of 19.6% from 2020 to 2023, despite a slight decline in net profit due to increased investment in overseas markets and liquid cooling technology [4][22] - The liquid cooling market in China is projected to grow at a CAGR of 47.6% from 2023 to 2028, reaching a market size of $10.2 billion by 2028 [4] Summary by Sections 1. Leadership in Specialized Air Conditioning - The company has expanded its product line in specialized air conditioning, including data service air conditioning, industrial air conditioning, special air conditioning, and public and commercial air conditioning [12][13] - The company has a stable shareholding structure, with the controlling shareholder holding 27.6% of the shares, which supports strategic decision-making [15][18] - Revenue has steadily increased from 1.467 billion yuan in 2020 to 2.511 billion yuan in 2023, with a year-on-year growth of 6.2% in the first three quarters of 2024 [4][22] 2. AI-Driven Intelligent Computing Center Construction - The specialized air conditioning market has broad applications, including data service industries, industrial sectors, special environments, and public buildings [41][45] - The construction of intelligent computing centers is accelerating, with the number of standard racks in use in China reaching 8.1 million by the end of 2023, a year-on-year increase of 24.2% [48] - The average Power Usage Effectiveness (PUE) of computing centers has improved to 1.48, indicating better energy efficiency [50] 3. Advanced Layout in Liquid Cooling - The company has been researching liquid cooling technology since 2011 and has established one of the earliest commercial liquid cooling micro-module data centers in China [4][12] - The company’s liquid cooling systems are designed to meet the increasing cooling demands of high-density racks, with a focus on energy efficiency and adaptability [4][12] - The liquid cooling market is expected to become mainstream due to its advantages over traditional air cooling systems, particularly in meeting PUE requirements [53] 4. Profit Forecast and Investment Recommendations - The company is projected to achieve revenues of 2.83 billion yuan, 3.64 billion yuan, and 4.62 billion yuan for 2024, 2025, and 2026, respectively, with growth rates of 12.8%, 28.5%, and 27.0% [4][5] - Net profits are expected to reach 162 million yuan, 265 million yuan, and 336 million yuan for the same years, with growth rates of 54.1%, 63.9%, and 27.0% [4][5] - The company’s price-to-earnings (PE) ratio is lower than the average of comparable companies, indicating potential for profit growth in the AI liquid cooling industry [4][5]
申菱环境：全面布局液冷，有望受益AI浪潮