Market Overview - On July 14, the Shanghai Composite Index rose by 0.27%, the CSI 300 increased by 0.07%, the STAR 50 fell by 0.21%, the CSI 1000 rose by 0.02%, and the ChiNext Index decreased by 0.45% [4] - The best-performing sectors on July 14 were machinery equipment (+1.23%), comprehensive (+1.04%), public utilities (+1.04%), household appliances (+1.02%), and oil and petrochemicals (+0.86%). The worst-performing sectors were real estate (-1.29%), media (-1.24%), non-bank financials (-1.03%), retail (-0.94%), and computers (-0.88%) [4][3] - The total trading volume for the entire A-share market on July 14 was 1,480.9 billion yuan, with a net inflow of 8.243 billion Hong Kong dollars from southbound funds [4][3] Industry Insights - The report highlights the dual opportunities presented by HVDC (High Voltage Direct Current) and the AI wave, indicating a new investment trend in AIDC (Artificial Intelligence Data Center) [5] - HVDC is expected to open up growth opportunities, while the demand for backup power sources in the generator segment is on the rise due to supply shortages [5] - Investment opportunities include the high value of power supply systems and the increasing density of AI computing chips driving HVDC iterations, alongside the upward trend in generator backup power demand [5]

Group 1 - The company has a strong layout in wind-solar-storage grid-type products and is continuously breaking through in overseas markets, embracing AIDC to establish a second growth curve [1][3] - The company maintains a buy rating, adjusting the EPS for 2025 and 2026 to 1.38 yuan (-0.27) and 1.66 yuan (-0.29) respectively, with a new EPS for 2027 set at 1.95 yuan, targeting a price of 37.81 yuan based on a 27.4x PE for 2025 [2] - The engineering transmission business is expected to achieve 560 million yuan in revenue in 2024, a year-on-year increase of 16.7%, with a gross margin of 44.5%, while overseas revenue is projected to reach 259 million yuan in 2024, a year-on-year increase of 122.7%, with a gross margin of 54.2% [2] Group 2 - The National Energy Administration has listed grid-connection technology as the top pilot direction, with the company having invested six years in developing wind-solar-storage grid-type products [3] - The company has launched various products in the wind and solar sectors, including a 1.5-20MW doubly-fed converter and a 320-350kW string inverter, both designed to support high short-circuit current output capabilities [3] - The company is actively developing power and system solutions for data centers, aiming for over 80% green electricity in new data centers by the end of 2025, aligning with national requirements [3]

Group 1: Human-shaped Robots - The global human-shaped robot market is entering a mass production phase, with significant attention on supply chain adjustments and incremental changes in components [2][6][12] - Tesla aims to produce 5,000 to 10,000 units of its humanoid robot in 2025, with production schedules affected by trade tensions and personnel changes [2][9] - Domestic companies like Yuzhu, Zhiyuan, and Ubtech are leading in mass production, while automotive firms such as Xiaopeng and Xiaomi are preparing for official product launches [2][9][10] Group 2: AIDC (Artificial Intelligence Data Center) - The overseas supply chain continues to deliver high profitability, with Nvidia exceeding expectations and domestic cloud vendors increasing CAPEX investments [2][4] - New computing cards are expected to accelerate investment rhythms, with upcoming models like DeepseekR2 anticipated to drive long-term demand [2][4] - Domestic power supply upgrades are projected to enhance profit margins for related companies, with a focus on HVDC penetration rates [2][4] Group 3: Industrial Control - Domestic demand for industrial control has shown signs of recovery, with a year-on-year increase in H1, particularly in logistics, packaging, and engineering machinery sectors [2][4] - The overall demand for industrial control is expected to grow by 0-3% for the year, with ongoing price competition among domestic manufacturers [2][4] - Key players in the market are focusing on humanoid components, with significant overseas expansion opportunities [2][4] Group 4: Power Grid - Domestic investment in the power grid is expected to grow by over 10% this year, with a focus on ultra-high voltage projects [2][4] - The approval pace for power grid projects is anticipated to accelerate in H2, with new electricity trading models emerging [2][4] - Overseas supply is returning to a growth phase, with demand from data centers and power grids driving market recovery [2][4] Group 5: Investment Recommendations - Recommended companies in the humanoid robot sector include Sanhua Intelligent Controls, Top Group, and others, with a focus on emerging players like Fengcai Technology and Lingyun Co [2][4] - AIDC recommendations include Megmeet, Heweike, and others, with attention on companies like Keda Data and Invec [2][4] - Industrial control recommendations feature Huichuan Technology, Hongfa Technology, and others, with a focus on Hechuan Technology and Zhengxian Electric [2][4] - Power grid recommendations include Siyi Electric, Samsung Medical, and others, with attention on Huaming Equipment and Weisheng Information [2][4]

Core Viewpoint - The company, established in 2001, has evolved from high-frequency switch power supply to becoming a leader in HVDC for data centers, with significant milestones including acquiring Eaton's indoor communication power business in 2009 and entering the power informationization sector through the acquisition of Zhongheng Borui in 2012. The company has formed two main segments: power electronics manufacturing and power digitalization, with a projected net profit of 110 million yuan in 2024, representing a year-on-year increase of 178.5% [1] Group 1 - The rapid iteration of AIGC is accelerating capital expenditure among major global internet companies, with high-power AI chips driving the upgrade of data center power supply systems. HVDC is expected to become the preferred solution due to its efficiency, reliability, space optimization, and rapid deployment capabilities [2] - The company has established a strong position in the domestic market, with its HVDC power products widely applied in large cloud computing data centers represented by BAT and third-party colo data centers, leading in market share and conversion efficiency [2] - The company is actively expanding into overseas markets to capture growth opportunities in AIDC, with expectations of further strengthening its leading position as HVDC technology upgrades to 800V and penetration rates increase [2] Group 2 - As a leading player in the domestic HVDC sector, the company is well-positioned to benefit from new opportunities in AIDC construction, with projected net profits of 206 million, 337 million, and 490 million yuan for 2025-2027, corresponding to EPS of 0.37, 0.60, and 0.87 yuan per share [3] - The company is compared with peers such as Tonghe Technology, Oulutong, and Magmiter, with a target price of 16.47 yuan per share based on a 45x PE ratio for 2025, initiating coverage with a "buy" rating [3]

Summary of AIDC Industry Conference Call Industry Overview - The AIDC (Artificial Intelligence Data Center) industry is currently undervalued in the domestic market, with EV/EBITDA valuations typically ranging from 10 to 15 times, compared to 20 to 30 times for international leaders [1][2][7]. Key Points and Arguments - **Valuation Discrepancy**: Domestic AIDC companies are significantly undervalued compared to international counterparts, indicating potential for value reassessment in the domestic market [1][2][7]. - **REITS Performance**: Recent REITS issuances by companies like Runze Technology and GDS Holdings showed high subscription multiples of 167 times and 166 times, respectively, with EV/EBITDA ratios of approximately 14 times and 17 times, highlighting market recognition of AIDC assets [1][5]. - **EBITDA Growth Potential**: Domestic AIDC companies are expected to see sustained EBITDA growth due to large-scale AIDC tender projects scheduled for delivery in the second half of 2025, with significant growth anticipated in 2026 [1][4][10]. - **Impact of ASIC Chips**: The introduction of domestic ASIC chips, which have higher power consumption than advanced process chips, is expected to increase demand for AI DC resources, further driving EBITDA growth in the AIDC sector [1][6]. Additional Important Insights - **Investment Strategy**: Investors are advised to increase their positions in AIDC stocks at the current market bottom, as the industry is expected to experience positive changes driven by AI development and ongoing project tenders [3][11]. - **Market Recovery**: The industry faced a slowdown in Q2 due to H20 supply issues, but improvements are anticipated in Q3 and Q4 of 2025 as new domestic chips enter the market and companies adjust their guidance positively [10]. - **Valuation Calculation**: AIDC companies' market value can be estimated using short, medium, and long-term EBITDA projections, with a neutral benchmark of 20 times EV/EBITDA. For instance, Century Internet's projected EV for 2025 is estimated between 552 billion to 564 billion [8]. Future Outlook - The AIDC industry has a promising future, with continuous growth in AI applications expected to drive demand for AIDC services. The ongoing tender projects and the early-stage development of AI will likely lead to increased EBITDA for listed companies [9].

Overall Viewpoint - The electric new industry is expected to maintain a favorable trajectory, with potential reversals in bottom sectors and continuous growth in new directions [6][22][25]. Continued Prosperity - The lithium battery sector shows a stable competitive landscape with strong demand from domestic and European markets, as well as emerging markets for energy storage [7][30]. - Wind power is anticipated to see increased installations, particularly in offshore wind, with significant growth expected in 2025-2026 [7][30]. - Energy storage is projected to recover in the domestic market, with strong demand from Australia and emerging markets, while commercial storage is expected to become a new growth driver [7][30][25]. Bottom Reversal - Lithium battery materials are currently at a cyclical low, with expectations for production recovery and price stabilization in the second half of 2025 [9][26]. - The photovoltaic sector is also at a cyclical bottom, with policy support expected to alleviate supply-demand imbalances by the end of 2025 [9][26]. New Growth Directions - Humanoid robots and AIDC (Artificial Intelligence Data Center) are emerging as significant growth areas, with strong production trends expected in 2025 [10][28]. - The humanoid robot sector is seeing progress from both domestic and international manufacturers, with Tesla's orders expected to catalyze growth [10][28]. - AIDC is experiencing fluctuations in capital expenditure from major internet companies, with potential catalysts from new technology applications [10][28].

Summary of AIDC Industry Conference Call Industry Overview - The AIDC (Artificial Intelligence Data Center) industry is experiencing strong growth in computing power demand, with Century Internet revising its performance guidance upwards and Nvidia's B30 graphics card actively advancing, indicating a potential verification of the industry's prosperity in both domestic and international markets. The current industry adjustment has reached a bottom, and market pessimism has been fully released [1][2]. Key Trends and Data - The usage of tokens by major domestic and international internet companies is rapidly increasing. For instance, Microsoft's token usage exceeded 100 trillion in Q1, while ByteDance's Doubao model reached an average daily token usage of over 16.4 trillion by May 2025, reflecting a more than fourfold increase since the beginning of the year and over a hundredfold increase since its initial release [1][4]. - The global data center weighted average vacancy rate was 6.6% in Q1 2025, a decrease of 2 percentage points year-on-year, indicating a sustained high demand in the data center sector [1][5]. - The AI industry's development and the "arms race" in data center construction are core drivers of demand. The U.S. plans to increase energy supply to support AI expansion, while Meta aims to raise $29 billion for AI data center construction. Century Internet announced plans to build a 10GW super-large data center cluster over the next decade [1][6]. Market Dynamics - The AIDC sector's stock price correction is primarily due to lower-than-expected capital expenditures (CapEx) from major domestic companies, leading to market concerns about demand. However, the core demand for computing power remains strong and exceeds expectations, with positive changes expected to validate the industry's outlook [2]. - In the domestic IDC market, large manufacturers' orders were concentrated in Q1 2025, with a decrease in orders in Q2 due to market sentiment and chip supply issues. The overseas IDC market maintains high capital expenditure levels, driven by AI expansion [3][11]. Investment Opportunities - In the AIDC construction, the electrical equipment sector should focus on products such as power supplies, transformers, and switches. The transition from AC to DC (HVDC) distribution systems is clear, with significant value potential in HVDC power systems, relays, and low-voltage electrical products [1][8]. - Key players in the domestic supply chain for HVDC systems include Kehua, Shenghong, and Keda, which have established partnerships with major internet companies [9][10]. Company-Specific Developments - Century Internet plans to build a 10GW super-large data center cluster over the next decade and has revised its revenue and profit forecasts upwards, reflecting confidence in AIDC construction speed [12]. - ByteDance has adopted domestic engine solutions in its recent bidding for diesel generators, resulting in stable overall profits despite increased costs [13]. - Other major domestic internet companies are exploring new bidding solutions for diesel generators, providing opportunities for domestic manufacturers [14]. Conclusion - The AIDC industry is poised for growth driven by strong computing power demand and significant investments in data center infrastructure. The transition to DC power systems presents new investment opportunities, while major players are adapting to market changes and enhancing their operational strategies.

Summary of AIDC Industry Update and Q&A Industry Overview - The AIDC (Artificial Intelligence Data Center) industry is experiencing a recovery in overseas computing infrastructure, with companies like Nvidia and Corewave showing positive performance focused on training and inference demand [1][2] - Domestic AIDC is constrained by chip limitations, model breakthroughs, and application deployment, but major data centers like GDS and Century Internet are maintaining stable deployment rates despite the H20 ban [1][2][3] Key Insights - **Overseas Market Recovery**: Nvidia's focus is on training demand, while Corewave caters to large enterprises like Microsoft. Companies such as Broadcom and Marvell have optimistic revenue expectations for ASICs, and Oracle's OCI business reflects growth in inference demand [1][2][5] - **Domestic Market Dynamics**: Despite short-term impacts from trade wars, major Chinese internet companies like Alibaba and ByteDance are investing heavily in AI. Long-term solutions for domestic AI challenges include breakthroughs in chips (e.g., Cambricon, Huawei Cloud Matrix 384) and improvements in model capabilities [1][3][4] - **Investment Recommendations**: Companies with stable deployment rates and core leading customer orders, such as Runze Technology, Aofei Data Port, Century Internet, and GDS, are recommended for investment due to their low valuations and potential for significant improvement [1][4] Performance Trends - **Overseas Demand Trends**: The overseas computing market is showing strong growth, particularly in GPU and ASIC demand. Nvidia has launched new GB series chips, and companies like Marvell and Broadcom have revised their market demand expectations upward [7][8] - **Domestic Market Performance**: The domestic computing market faced some disruptions in Q2 due to geopolitical factors and chip restrictions, but overall guidance remains stable. The AIDC sector is expected to see improved order visibility and capital expenditure growth in the coming quarters [8][9] Future Outlook - **Upcoming Quarters**: The outlook for the domestic computing market in the next two quarters is positive, with expectations of accelerated capital expenditure and construction progress, particularly in the AIDC core hardware supply chain [9] - **AI Data Center Growth**: AI data center-related sectors are showing good business growth elasticity, with significant order increases in server power supplies and UPS systems [10][14] - **HVDC Development**: Both domestic and international markets are seeing increased adoption of HVDC solutions, with major Chinese internet companies pushing for its application [11][12] Global AI Demand - **Inference Demand Growth**: Global inference demand is rapidly increasing, with companies like Google and ByteDance significantly ramping up their requirements [16] - **US vs. China AI Demand**: The US is entering a new model iteration cycle with large clusters, while China's AI demand is primarily focused on inference due to limited resources for training [17] Market Sentiment - **US AI Industry Expectations**: The US AI industry is expected to see significant changes in the next six months, with rapid stock price increases in sectors like NV and ASIC, indicating a potential expansion from overseas to domestic supply chains [18] - **AI Business Models**: The US has a stronger likelihood of successful AI business models due to higher payment willingness, while China's market faces challenges in this regard, potentially affecting profit margins [19] Conclusion - The AIDC industry is poised for growth, driven by both domestic and international demand for AI capabilities. Investment in key players with stable growth prospects is recommended, while monitoring the evolving landscape of AI business models and market dynamics is crucial for future success [20]

Core Viewpoint - Huasheng Co., Ltd. (600156.SH) is planning a cross-industry layout by acquiring 100% of Shenzhen Yixin Technology Co., Ltd. to transform into the computing power business, driven by declining profitability in its traditional textile sector [1][4]. Group 1: Acquisition Details - The acquisition will be executed through a combination of issuing shares and cash payments, with additional funding raised from the controlling shareholder, Xingxiang Group [2]. - The transaction's audit and evaluation are still ongoing, and the asset price has not yet been determined [3]. Group 2: Business Context - Huasheng Co., Ltd. has faced significant challenges in its core textile business due to fluctuating consumer demand, increased competition, and rising costs, leading to a continuous net profit loss for 17 years [1][6][7]. - In contrast, Yixin Technology has demonstrated strong profitability, with projected revenues of 409 million yuan and net profits of 27.36 million yuan for 2024, reflecting year-on-year growth of 20.05% and 79.45%, respectively [1][9]. Group 3: Financial Performance - Huasheng's cumulative net profit loss from 2008 to 2024 is approximately 1.139 billion yuan, with a significant decline in gross margins due to competitive pricing strategies [7][8]. - As of March 2025, Huasheng's total assets were 865 million yuan, with an equity of 396 million yuan and a debt ratio of 54.28% [8]. - If the acquisition is successful, Huasheng's financial metrics, including total assets, revenue, and net profit, are expected to improve significantly, enhancing its profitability and competitive edge [9].

Summary of Conference Call Records Industry Overview - The conference call discusses the **AIDC (Artificial Intelligence Data Center)** industry in China, highlighting the challenges and opportunities faced by the domestic AI infrastructure supply side due to stricter energy consumption regulations imposed by the National Development and Reform Commission [1][4]. Key Points and Arguments - **Energy Consumption Regulations**: The National Development and Reform Commission has set higher energy consumption standards, leading to a more competitive landscape as some cross-industry companies exit the market [1][4]. - **AI Application Growth**: The development of AI applications, particularly in gaming, is supported by government subsidies of up to **30 million yuan** per project, which boosts demand for domestic computing power in core cities [1][5]. - **Market Recovery**: Major companies like ByteDance, Alibaba, and Tencent are expected to resume large-scale bidding for AI-related equipment in Q3 as chip supply issues ease, which will likely increase procurement volumes [1][6][7]. - **Stock Market Sentiment**: Companies such as Century Internet and Global Data have seen stock price recoveries, indicating restored market confidence and optimistic investor sentiment regarding future industry developments [1][8]. - **Valuation Metrics**: IDC companies are typically valued using EV/EBITDA, with overseas companies valued between **10 to 15 times**, and domestic companies at similar levels. The industry is expected to continue its recovery in Q3, driven by AI application growth [1][9]. Additional Important Insights - **Chip Supply Chain**: The domestic AI chip supply chain faced significant challenges in Q2, with major companies reducing their procurement volumes due to chip shortages. However, improvements are anticipated in Q3 as domestic chip production ramps up [2][11]. - **Technological Innovations**: The AIDC era is marked by technological changes in power supply and cooling systems, including the transition from traditional air cooling to liquid cooling, which poses challenges for IDC suppliers [4][12]. - **Delivery Cycle Changes**: The delivery cycle for data centers has been significantly shortened from **1-2 years to under 6 months**, reflecting the industry's need for rapid deployment despite ongoing supply chain issues [14]. - **Policy Impact**: The government's energy consumption approval policies are expected to benefit capable operators while phasing out less competent firms, leading to a stabilization of industry prices and potential improvements in profit margins [15]. Companies to Watch - Key companies in the AIDC supply chain include: - AI Data Centers: **Guanghuan New Network, Aofei Data, Xingwang Group, Davi Technology, Data Port** - Equipment and AI Chips: **SK Hynix Information** - Computing Power Leasing: **Youfang Technology, Hongjing Technology** - Liquid Cooling and HVDC Server Power: **Inveke, Lian De Equipment, Feirongda, Zhongheng Electric, Opcon Vision** - Network Switches and Optical Modules: **Lian De Technology, Ruijie Networks, Guangxun Technology, Huaguang Technology, Zhongji Xuchuang, Xinyi Sheng, Unisplendour** [10][13].