Group 1: Energy Storage - Domestic energy storage demand is continuously being released, with record-high bidding scale; from January to September 2025, the new energy storage installation capacity reached 81.96 GWh, a year-on-year increase of 61.59% [2] - The cumulative bidding scale for energy storage systems and EPC from January to October this year reached 364.19 GWh, a year-on-year increase of 161%, with independent storage accounting for 58% [2] - In the overseas market, the demand for energy storage is driven by the AIDC in the US, with a projected compound annual growth rate of 85% from 2025 to 2030; Europe is expected to see new energy storage installations reach 118 GWh by 2029, with large storage accounting for 69% [2] Group 2: Photovoltaics - The "anti-involution" policy has improved supply and demand in the photovoltaic industry, leading to a rebound in prices; from the price low in early July to December 11, the cumulative price increases for polysilicon, N-type silicon wafers, TOPCon battery cells, and TOPCon modules were 49%, 40%, 22%, and 2% respectively [3] - BC batteries are expected to achieve mass production by 2026, with significant investments from leading companies; by the end of 2025, domestic BC battery component capacity is expected to exceed 70 GW, with a continuous increase in market share [3] - Perovskite solar cell technology is making breakthroughs, with Longi Green Energy achieving a world record efficiency of 34.85% for silicon-perovskite tandem cells; the industry is transitioning from "technology validation" to "initial mass production" [3] Group 3: Space Photovoltaics - The deployment of space data centers is accelerating, presenting a promising future for space photovoltaics; current mainstream technology is gallium arsenide batteries, but high costs and rigid substrates limit large-scale application [4] - Future mainstream solutions may include P-type HJT batteries and perovskite batteries [4]

Investment Rating - The report assigns a "Buy" rating for the company, marking it as a first-time coverage [2][6][15]. Core Insights - The company is expected to benefit from the increasing penetration of HVDC technology and the expansion into overseas markets, leading to significant performance growth. The projected net profits for 2025-2027 are estimated at 146 million, 285 million, and 512 million yuan, respectively, with corresponding PE ratios of 95.4, 48.7, and 27.2, which are below the average of comparable companies [6][15]. - The company is a leading player in the HVDC supply solutions market, focusing on data center power systems, power operation systems, communication power systems, and digital power solutions. It has established a strong market position through technological and service advantages [6][19]. Financial Data and Profit Forecast - Total revenue is projected to grow from 1,555 million yuan in 2023 to 5,335 million yuan in 2027, with a compound annual growth rate (CAGR) of 53.7% [5][10]. - The company anticipates a significant increase in net profit from 39 million yuan in 2023 to 512 million yuan in 2027, reflecting a robust growth trajectory [5][10]. - The gross profit margin is expected to stabilize around 26% in the coming years, with specific segments like data center power systems showing higher margins due to increased overseas sales [10][11]. Industry Demand and Growth Drivers - The AIDC investment is entering a high-growth cycle, with major cloud providers significantly increasing their capital expenditures, which is expected to drive demand for power supply systems [25][26]. - The market for data center power supply systems is projected to reach 239.7 billion yuan in 2024 and grow to 610.4 billion yuan by 2027, with a CAGR of 36.6% [25][26]. - The penetration of HVDC technology is expected to accelerate due to rising power density in data center cabinets, making HVDC a more attractive option compared to traditional UPS systems [27][33]. Competitive Advantages - The company holds a leading market share of 31% in the HVDC sector, benefiting from deep relationships with major clients and a strong focus on R&D, which has resulted in a high number of patents and industry standards [48][61]. - The competitive landscape is characterized by high concentration, with the top three players expected to hold 72% of the market share by 2025, indicating a favorable environment for the company to maintain its leadership position [48][50]. International Expansion - The company is actively expanding into international markets through joint ventures and local partnerships, such as the establishment of SuperX Digital in Singapore, which focuses on Southeast Asia and the Middle East [61]. - This strategy aims to leverage local market knowledge and enhance supply chain collaboration to meet the growing demand for data center solutions abroad [61].

Core Viewpoint - The article emphasizes the critical energy shortage facing AI data centers (AIDC) and highlights the significant opportunity for energy storage solutions to address this challenge, particularly through the innovative lithium-sodium collaborative energy storage solution introduced by Haicheng Energy [4][6][10]. Group 1: Energy Demand and Challenges - By 2027, NVIDIA's GPU clusters alone are projected to consume 150-200 GW of electricity, which is 1.5 to 2 times the total electricity consumption of France [4]. - AIDC's electricity demand is expected to create a power gap of 47 GW in the U.S. between 2025 and 2028, equivalent to the electricity consumption of 15 cities like Philadelphia [16]. - AIDC's power density is 10 times higher than traditional data centers, presenting unprecedented challenges to existing power grids [9]. Group 2: Storage Solutions and Innovations - Haicheng Energy's newly launched AIDC all-time storage solution includes products with capacities of 1h, 2h, 4h, and 8h, addressing the full spectrum of energy needs [10][20]. - The solution aims to reduce the energy infrastructure construction period from 5-10 years to 1-2 years, achieving an acceleration of over 80% [19]. - The lithium-sodium collaborative approach allows for rapid response to power fluctuations, with sodium batteries providing high power response capabilities and lithium batteries ensuring long-term energy stability [30][32]. Group 3: Economic Viability and Compatibility - The economic feasibility of the AIDC storage solution is highlighted, with potential savings of over 40% in backup power costs over the lifecycle compared to traditional diesel generators [44][37]. - The solution is designed to be compatible with both current AC power architectures and future high-voltage direct current (HVDC) systems, enhancing overall efficiency [47]. - Haicheng aims to drive down energy storage costs to "one dime per kilowatt-hour" within five years, making green energy more accessible [45][46]. Group 4: Manufacturing and Technological Advancements - Haicheng Energy is advancing its manufacturing capabilities, achieving a threefold increase in production capacity while reducing costs by over 45% [55]. - The company is implementing automated technologies to ensure high-quality production, targeting a defect rate of one in a billion [57]. - The focus on innovative battery cell design, such as the development of a 1300Ah cell, is aimed at meeting the specific demands of AIDC scenarios [52][56]. Group 5: Strategic Vision and Industry Impact - The article concludes that Haicheng's energy storage solutions are not just product innovations but are foundational to the future of AI infrastructure, addressing the urgent need for reliable energy sources [66]. - The strategic initiative to create an energy base for AIDC reflects a broader vision of integrating technology and sustainability in the energy sector [48][60].

Core Insights - The report from China Merchants Securities highlights a surge in data center construction driven by computing power, with North America and China identified as the key growth regions for global data center expansion [1][2] - North American AI giants and Chinese internet companies are the primary drivers of this expansion, with capital expenditures expected to rise significantly [1] - The report anticipates a rebound in domestic demand in China after a temporary slowdown due to restrictions on the import of computing power cards [1] Demand Side - The construction boom in data centers is primarily fueled by the demand for computing power, leading to a significant increase in orders for companies within the industry [1] - Capital expenditures for North American leading companies are projected to increase from $24.1 billion in Q2 2023 to $76 billion by Q3 2025, while Chinese major firms are expected to reach a peak of 77.2 billion yuan in Q4 2024 [1] - The electricity demand from data centers in the U.S. is expected to account for 6.7%-12% of total electricity demand by 2028 [1] Supply Side - North America faces challenges such as aging power grids and outdated generation equipment, which are exacerbated by energy transition issues, leading to increased electricity prices [2] - In China, the main constraints are the reduction in imports of computing power cards and overseas equipment, making domestic substitution crucial [2] - The supply-demand dynamics in China are expected to shift towards demand-driven by 2026, while energy constraints in North America are likely to persist [2] Key Investment Directions - In the gas turbine segment, focus on upstream components (e.g., Yingli Co., Ltd.), HRSG component companies, domestic substitution targets (e.g., Shanghai Electric), and terminal service providers (e.g., Jereh Group) [3] - In the diesel generator segment, domestic companies are expected to benefit from delivery speed advantages, with attention on domestic substitution (e.g., Weichai Heavy Machinery) and overseas expansion (e.g., KOTAI Power) [3] - In the cooling segment, the increase in single rack power is driving the shift of liquid cooling from "optional" to "essential," leading to a significant rise in mechanical equipment spending [3]

Group 1 - Alphabet, Google's parent company, announced the acquisition of data center energy supplier Intersect for $4.75 billion (approximately 33 billion RMB) to enhance power supply for data centers [1] - Intersect specializes in power solutions for data centers, focusing on power supply optimization, energy efficiency, and emergency power support, which aligns with the extreme demand for power stability in AI data centers [1] - The acquisition aims to address the increasing power demand in the U.S. due to aging power grids and the surge in AI, new factories, and overall electrification of the economy [1] Group 2 - The North American power shortage is exacerbated by the rapid growth of AI computing power, with NVIDIA's CEO warning that power shortages are a critical bottleneck for AI development in the U.S. [1] - The U.S. public utility's summer net generation capacity for 2024 is projected at 1,230.4 GW, with a compound annual growth rate (CAGR) of only 1.42% over the past decade, and 8.1 GW of coal-fired power plants are set to retire in 2025, worsening the power gap [1] - New technologies in power supply systems are seen as key opportunities for domestic companies to expand internationally, with solid-state transformers (SST) expected to become the ultimate solution for AIDC power systems [2] Group 3 - Companies with supply capabilities for high-reliability power generation equipment, energy storage devices, and grid-related equipment are expected to benefit significantly from the growing power gap in North America [2] - The trend towards direct current and high voltage in data center distribution is confirmed, with solid-state circuit breakers accelerating in application due to their advantages in arc-free interruption [2] - Companies in the upstream and downstream supply chain, including power generation, storage, and distribution, will directly benefit, leading to increased demand for supporting materials like electrolytes and membranes [2] Group 4 - Sungrow Power Supply, a leading company in the domestic solar-storage sector, has a well-established global layout for its storage business and can meet the dynamic power supply needs of AIDC [3] - Jerry Holdings has recently secured over $100 million in generator orders from North American AI clients [4]

Investment Rating - The report assigns a "Buy" rating for the company, indicating a positive outlook on its stock performance [5]. Core Insights - The company is well-positioned in the power supply sector, particularly benefiting from the demand for high-power server power supplies driven by the AIDC wave. The expected growth in net profit for 2025-2027 is projected at 326 million, 464 million, and 804 million CNY, respectively, with corresponding PE ratios of 69.4, 48.8, and 28.1 [5]. - The company has established itself as a leading supplier of high-power server power supplies in China, with products that meet international high-end standards. It is one of the few suppliers capable of large-scale sales of high-power server power supplies, which positions it to capitalize on opportunities in AI and domestic substitution [5][32]. - The report highlights the company's strategic partnerships with major domestic server manufacturers and its ongoing collaboration with leading internet companies, which enhances its market presence [5]. Financial Data and Profit Forecast - Total revenue projections for the company are as follows: 2,870 million CNY in 2023, 3,798 million CNY in 2024, 4,817 million CNY in 2025, 6,082 million CNY in 2026, and 7,448 million CNY in 2027, with year-on-year growth rates of 6.2%, 32.3%, 26.8%, 26.3%, and 22.5% respectively [4]. - The net profit forecast shows significant growth, with expected figures of 196 million CNY in 2023, 268 million CNY in 2024, 326 million CNY in 2025, 464 million CNY in 2026, and 804 million CNY in 2027, reflecting growth rates of 117.1%, 36.9%, 21.7%, 42.4%, and 73.2% respectively [4][36]. - The company's gross margin is projected to improve, with estimates of 19.7% in 2023, 21.4% in 2024, 21.3% in 2025, 24.0% in 2026, and 26.6% in 2027 [36]. Market Position and Competitive Landscape - The company ranks as the 12th largest power supply manufacturer globally in 2024, with sales of approximately 521 million USD, indicating a strong competitive position in the market [17]. - The report emphasizes the company's ability to meet the growing demand for high-power server power supplies, particularly in the context of the expanding global server market, which is expected to reach a scale of 282.35 billion CNY in China by 2025 [5][30]. - The company is strategically positioned to leverage its global production capabilities in Vietnam and Mexico to meet North American customer demands, enhancing its competitive edge [5].

Summary of Key Points from Conference Call Records Industry and Company Focus - **Industry**: Innovative Pharmaceuticals and Power Equipment - **Key Companies Mentioned**: MNCs (Multinational Corporations), Bloom Energy, CROs (Contract Research Organizations) Core Insights and Arguments 1. **Market Sentiment and Opportunities**: Market sentiment peaked in September and then declined, with trading volume dropping from 30 trillion to 15 trillion, indicating potential investment opportunities rather than a time to reduce positions [1][4] 2. **Sector Performance**: The innovative pharmaceutical sector experienced significant adjustments, while traditional value sectors like insurance showed upward trends, leading to a convergence in sector performance [2] 3. **Global Economic Factors**: Global macroeconomic factors, including interest rate changes by the Bank of Japan and fluctuating expectations for the Federal Reserve, have impacted market dynamics. However, China's export data recovery suggests that global trade and technology cycles have not peaked [5] 4. **Future of Innovative Pharmaceuticals**: The innovative pharmaceutical sector remains promising despite recent adjustments, driven by business development (BD) opportunities and China's advantages in clinical trial costs and speed, which are expected to persist into 2026 [7][9] 5. **CRO Sector Outlook**: The CRO sector is seeing increased orders and improved expectations, influenced by rising monkey prices and the U.S. defense security legislation. Despite recent performance not meeting expectations, the long-term growth trend remains intact [11] 6. **Biopharmaceutical Index Trends**: The U.S. biopharmaceutical index (XBI) has been on an upward trend since April, primarily due to significant MNC acquisitions, with expectations for this trend to continue into 2026 [12] 7. **AIDC Impact on Natural Gas Demand**: AIDC (Artificial Intelligence Data Center) has significantly influenced U.S. natural gas demand, with increased orders leading to extended delivery cycles [20] 8. **Diesel Generator Market**: The diesel generator market is currently facing supply shortages, with prices rising by 30% to 50% due to cautious production increases and component supply issues [23] 9. **Electric Power Equipment Demand**: The demand for electric power equipment in the U.S. remains high, with a notable shift towards renewable energy sources, necessitating smart grid upgrades [17][28] 10. **Risks in Innovative Pharmaceuticals**: Potential risks for the innovative pharmaceutical sector in 2026 include liquidity issues in the Hong Kong market, the reproducibility of clinical data internationally, and uncertainties in U.S.-China relations affecting BD and CRO industries [27] Other Important but Potentially Overlooked Content 1. **Market Adjustments**: The market has experienced notable adjustments in both domestic and overseas markets, with significant declines in leading companies like Bloom Energy [2] 2. **Investment Strategy**: Current market conditions suggest that it is not an ideal time to reduce positions, but rather a moment to consider new investments [4] 3. **Technological Developments**: The transition in AIDC power architecture indicates a significant shift in supply chain dynamics, with domestic companies striving to meet new technical standards [25][26] 4. **Potential Over-Optimism**: Certain sectors, particularly energy-related manufacturing like storage, may be overly optimistic in current market expectations, warranting caution [30] 5. **Chinese Asset Revaluation**: The structural opportunities arising from Chinese companies going global and technological revolutions are expected to provide significant growth prospects despite recent market adjustments [31]

Group 1: Game Industry Transformation - The gaming industry is evolving from being primarily an entertainment product to a flexible tool that drives digital transformation in traditional sectors like healthcare, education, and manufacturing [1] - The integration of gaming technology and design thinking is creating new growth opportunities and reshaping perceptions of the industry [1] Group 2: High-Quality Development in Gaming - China's gaming industry is transitioning to a new phase focused on "high-quality development," with projected market revenue reaching 350.79 billion yuan by 2025, reflecting a year-on-year growth rate of 7.68% [2] - The "game economy" is emerging as a vast ecosystem with a market size exceeding 1.2 trillion yuan, driven by technological innovations and cultural content [2] - The industry is shifting from "product export" to "cultural export," emphasizing long-term value creation [2] Group 3: Energy Sector Developments - The central economic work conference highlighted the need for a green transition in energy, with a focus on renewable energy sources and carbon reduction [5] - Companies in the energy sector are expected to play a significant role in the construction of a new energy system, particularly in areas like storage, wind power, and solar energy [5] Group 4: Public Fundraising Trends - The public fund issuance market has seen a significant shift, with 1,468 new funds launched in 2025, marking a four-year high, while total fundraising remains stable compared to the past two years [8] - This trend indicates a move towards a more diversified and innovative approach in the equity fund sector [8] Group 5: Mergers and Acquisitions in State-Owned Enterprises - There have been 1,001 merger and acquisition cases involving state-owned companies in the A-share market this year, indicating a steady growth trend [9] - The focus of these transactions is on core business areas, with an emphasis on shedding non-core assets and accelerating investments in strategic emerging industries like semiconductors and renewable energy [9] Group 6: Platinum Market Dynamics - Platinum prices have surged over 110% this year, significantly outpacing gold's 65% increase, driven by changes in supply and demand dynamics [10] - The highest recorded price for platinum reached $1,987 per ounce, the highest since July 2008 [10] Group 7: AI and State-Owned Enterprises - The State-owned Assets Supervision and Administration Commission plans to deepen the "AI+" initiative during the 14th Five-Year Plan, focusing on overcoming technological bottlenecks and enhancing digital transformation [11] - Emphasis will be placed on traditional industry upgrades and the development of core technologies [11]

Investment Rating - The report maintains an "Accumulate" rating for the power equipment industry [1] Core Viewpoints - The energy storage sector is experiencing robust global demand, with significant growth expected in the coming years, particularly in large-scale storage [3][8] - The report highlights advancements in humanoid robotics and artificial intelligence-driven automation, indicating a strong growth trajectory for these sectors [7][8] - The electric vehicle market is projected to continue its upward trend, with a notable increase in sales and production anticipated for 2026 [8] Industry Trends - Energy Storage: The report notes that the demand for energy storage is exceeding expectations, with a projected growth rate of over 60% next year. The U.S. is expected to see significant installations, with a cumulative capacity of 52.5 GWh anticipated for the year [3][8] - Robotics: The humanoid robotics market is expected to reach a scale of over 100 million units, with a market potential exceeding 15 trillion yuan. The report emphasizes that the industry is in its early stages, akin to the electric vehicle market a decade ago [7][8] - Electric Vehicles: In November, domestic electric vehicle sales reached 1.82 million units, reflecting a year-on-year growth of 21%. The report forecasts a 31% increase in sales for the year, with exports contributing significantly to this growth [8][28] Company-Specific Insights - Ningde Times (CATL) is highlighted as a global leader in power and energy storage batteries, with a low valuation relative to its growth potential [6] - Other companies such as Sunpower and BYD are also noted for their strong positions in the inverter and electric vehicle markets, respectively, with positive growth forecasts [6][8] - The report mentions several companies with promising growth prospects, including Keda Li, which is expected to benefit from the increasing demand for energy storage solutions [6][8]

Investment Highlights - Company initiates coverage on Shuangdeng Co., Ltd. (06960) with an "outperform" rating and a target price of HKD 22.90, based on a P/E valuation method corresponding to a 16.0X P/E for 2026 [1] - The energy storage market has significant growth potential, driven by the increasing capital expenditure in global computing power and the declining costs of energy storage batteries, alongside supportive policies [1] - The demand for data center energy storage, including backup power and regulation storage, is expected to be rapidly released due to increased capital spending in global computing power [1] Industry Outlook - The power storage sector is entering an upward cycle, with a turning point in supply and demand expected in Q3 2025, as domestic independent energy storage economics improve and overseas energy structure transformations and policy subsidies drive demand [1] - The supply-demand relationship is anticipated to improve, leading to a recovery in energy storage cell prices [1] Company Strategy - The company's energy storage business focuses on data center scenarios, positioning itself with leading domestic CSP manufacturers and top overseas power supply manufacturers, aiming for a leading market share in backup power for data centers in 2024 [2] - The company is optimistic about its international expansion through overseas factories, which will open up growth opportunities [2] - The company has already entered the overseas supply chain and positioned itself with key customers, contrary to market perceptions of slow overseas progress [2] Earnings Forecast and Valuation - The company forecasts EPS of RMB 0.65 and RMB 1.29 for 2025 and 2026, respectively, with a CAGR of 24.8% from 2024 to 2026 [2] - The current stock price corresponds to a 10.1x P/E for 2026, while the company is assigned a 16.0x P/E, leading to a target price of HKD 22.90, indicating a potential upside of 58.0% [2]