SINOLINK SECURITIES·2025-08-29 09:18Investment Rating - The report maintains a positive outlook on the AI electronic fabric industry, suggesting it has high growth potential and high barriers to entry, similar to the wind power yarn market [4][10]. Core Insights - The AI application scenarios are experiencing high demand, which is catalyzing the need for specialty glass fibers, leading to continuous product iteration [2][7]. - Major companies like Zhongcai Technology and China Jushi are expanding their production capacities significantly, indicating confidence in market growth [1][6]. - The report highlights the potential for the AI electronic fabric market to achieve high concentration, with leading companies likely to dominate due to the critical nature of materials in the supply chain [4][10]. Summary by Sections Section 1: Company Developments - Zhongcai Technology's subsidiary, Taishan Fiberglass, plans to invest CNY 17.51 billion to build a production line for 24 million meters of ultra-low loss low dielectric fabric and CNY 18.06 billion for 35 million meters of low dielectric fabric [1][6]. - China Jushi is advancing its low dielectric product development, focusing on ultra-thin and extremely thin electronic fabrics, leveraging its past experience in the 7628 electronic fabric sector [1][6]. Section 2: Market Characteristics - The specialty glass fiber market is characterized by high growth, high barriers, and high concentration, with the top three companies holding approximately 90% of the market share [4][9]. - The report notes that the wind power yarn market has seen a 15-fold increase in domestic capacity over the past 15 years, indicating strong growth potential for similar markets like AI electronic fabrics [4][9]. Section 3: Investment Recommendations - The report recommends continued investment in Zhongcai Technology and China Jushi, highlighting their strong positions in the AI electronic fabric market and the potential for price re-evaluation [10]. - Other companies to watch include Feilihua, International Composites, and Zaiseng Technology, which may also benefit from the industry's growth [10].