Core Viewpoint - In the third quarter of 2025, Invec (002837.SZ) reported strong revenue growth driven by increased demand for liquid cooling solutions, particularly in the context of AI infrastructure investments, despite a sequential decline in quarterly performance [1][2]. Financial Performance - For the third quarter, Invec achieved revenue of 14.53 billion yuan, a year-on-year increase of 25.34%, but a quarter-on-quarter decrease of 11.44% [2] - The net profit for the same period was 1.83 billion yuan, with growth rates below 10% for both year-on-year and quarter-on-quarter comparisons [2] - The company’s gross margin improved by 3.4 percentage points to 29.4%, attributed to changes in product and regional mix [2] Market Dynamics - The liquid cooling server index has risen over 47% this year, reaching historical highs, with Invec's stock price surging 169% in the third quarter, peaking at 89.99 yuan [1] - Despite the stock price increase, the net sell-off by the Shanghai-Hong Kong Stock Connect in the third quarter amounted to 45.2 million shares, reducing the holding ratio from 8.49% to 3.79% [1] Future Outlook - Analysts expect Invec's full-year revenue to exceed 60 billion yuan, representing a year-on-year growth of 30%, with net profit projections ranging from 6 billion to 9 billion yuan [3] - The company is positioned to benefit from the rapid expansion of the liquid cooling market driven by high demand in data centers and computing power investments [3][4] Industry Trends - The complexity and importance of liquid cooling technology are expected to increase, evolving from a simple alternative to air cooling into a comprehensive solution involving multiple stakeholders [4] - The growth in contract liabilities and inventory indicates future revenue potential, although inventory levels did not increase as anticipated, suggesting a delay in order conversion [3] Adjustments in Forecasts - Open Source Securities has revised its profit forecast for Invec, lowering the expected net profit for 2025 from 6.51 billion yuan to 6.03 billion yuan, while increasing the 2026 forecast to 11.1 billion yuan [5]

Investment Rating - The investment rating for the company is "Buy" [7] Core Views - The company has achieved significant revenue growth, with a 40.2% year-on-year increase in revenue for the first three quarters of 2025, reaching 4.03 billion yuan, and a net profit of 400 million yuan, up 13% year-on-year [1] - The growth in Q3 was driven by increased revenue from energy-saving products for server rooms and cabinets, despite a slight quarter-on-quarter decline of 11% due to revenue recognition timing [2] - The company is positioned strongly in the liquid cooling market, with comprehensive product offerings and recognition from major players like Intel and Google, indicating a robust competitive advantage [3][11] Financial Performance - For 2025, the company expects revenues of 6.2 billion yuan, with a year-on-year growth rate of 35.1%, and net profits of 603 million yuan, reflecting a growth rate of 33.2% [12] - The overall gross margin for the company is reported at 29.4%, with a net profit margin of 12.9%, both showing quarter-on-quarter improvements [2] - The company’s inventory has increased to 1.23 billion yuan, up 39% year-on-year, indicating a strong order backlog and project reserves [2] Market Position and Future Outlook - The liquid cooling industry is expected to become increasingly complex, with a shift towards integrated solutions that require collaboration among various stakeholders [4] - Companies with comprehensive solution capabilities will have a competitive edge, as clients increasingly rely on pre-sales design and post-sales operations [5] - The company is well-positioned to capitalize on the growing demand for liquid cooling solutions, particularly in the context of rising energy consumption in AI clusters [11]

Core Insights - The demand for advanced cooling technologies has shifted from being a mere equipment support item to a core performance element due to the increasing power density of data center servers and the dual upgrade of electric vehicle range and fast charging needs [1] Group 1: Liquid Cooling Technology - The competitive edge of the company in the liquid cooling market stems from its relentless pursuit of core technologies, forming a comprehensive technical matrix that includes material innovation, structural design, and system integration [2] - A new refrigerant direct cooling technology, developed in collaboration with South China University of Technology, significantly enhances heat transfer coefficients compared to traditional liquid cooling solutions while simplifying system structures and reducing component counts, achieving a balance between cost control and cooling efficiency [2] - The company has secured multiple key patent authorizations since 2025, including a liquid cooling plate with phase change material that effectively eliminates local hotspots and extends the lifespan of chips and batteries [2] Group 2: AI Computing and Server Solutions - The company has developed a micro-channel liquid cooling module for servers, featuring a channel width of 0.15mm and a 250% increase in heat exchange area, designed to meet the specific needs of AI computing scenarios [3] - The product includes a physical anti-blocking design and supports parallel installation, ensuring efficient cooling for multi-GPU clusters with a low contact thermal resistance of less than 0.03℃·cm/W [3] Group 3: Market Applications and Partnerships - The company has established a diversified application ecosystem across computing power, new energy, and low-altitude economy, supplying core components for liquid cooling servers to leading firms such as Super Fusion and ZTE Kangxun [4] - In the new energy sector, the company provides liquid cooling plates and assembly components for major manufacturers like Guoxuan High-Tech and Yiwei Lithium Energy, and has secured orders from leading flying car manufacturers [4] - The company won a bid for a wind and liquid cooling supercharging station project for a major digital energy client in October 2024, indicating strong market recognition of its technology [4]

Core Viewpoint - The article emphasizes the increasing importance of copper in the AI era, likening it to oil in the past, due to its critical role in powering and cooling advanced technologies like GPUs and data centers [5][11]. Group 1: Copper Demand and Supply - Copper is essential for high-end GPU chips, with each H100 GPU requiring numerous copper connections for optimal performance [7]. - The demand for copper in data centers is surging, with an estimated copper consumption of 46.7 million tons in 2023, projected to rise to 71 million tons by 2026 [9]. - By 2030, global electricity demand for data centers is expected to increase by 160%, necessitating significant upgrades to aging electrical infrastructure [10]. - Copper's unique properties, such as high conductivity and longevity, make it irreplaceable in electrical transmission, with predictions indicating that 60% of copper demand growth will come from electrical infrastructure by 2030 [10][11]. Group 2: Price Projections and Market Trends - Goldman Sachs forecasts copper prices to reach $10,750 per ton by 2027, driven by limited growth in mining and refining capacities [11][12]. - The global copper mining output has seen a compound annual growth rate of only 2.1% over the past decade, with expectations for future growth remaining low [11]. Group 3: Aluminum as a Substitute - As copper prices rise, aluminum is gaining traction as a cost-effective alternative, particularly in GPU cooling systems where weight and cost advantages are significant [14]. - The use of aluminum in data center cooling can reduce overall weight and costs, with aluminum heat sinks costing 40-50% less than copper counterparts [15]. - UBS has raised its aluminum price forecasts, anticipating continued growth in global aluminum production [16]. Group 4: Cooling Technologies - The shift towards liquid cooling technologies is becoming essential due to the limitations of traditional air cooling systems, which cannot meet the thermal demands of high-power AI chips [20][21]. - The global liquid cooling market is projected to grow significantly, with a forecasted market size of $2.84 billion by 2025, reflecting a 44.9% year-on-year increase [22]. - Innovations in cooling solutions, such as microchannel liquid cooling plates, are being explored to efficiently manage the heat generated by advanced computing systems [23]. Group 5: Broader Market Implications - The increasing demand for copper, aluminum, and cooling solutions reflects the broader physical needs driven by the growth of AI and data centers, indicating a significant market transformation [24].

Core Insights - The Ministry of Industry and Information Technology and six other departments have issued a plan to promote service-oriented manufacturing innovation from 2025 to 2028, emphasizing the construction of new information infrastructure and the integration of "5G + industrial internet" [1] - Liquid cooling technology is identified as a key component of AI computing infrastructure, transitioning from an optional technology to a necessary configuration, with significant growth expected in the industry [1][2] Industry Growth and Market Potential - The demand for high-performance computing in AI has surged, leading to rapid growth in the liquid cooling market, with China's liquid cooling server market projected to reach $2.37 billion in 2024, a 67% increase from 2023 [2] - By 2029, the market size for liquid cooling servers in China is expected to reach $16.2 billion, indicating a strong upward trend [2] Application and Commercialization - Liquid cooling technology is increasingly applied in high-performance computing, AI training, and large-scale data centers, particularly in AI servers with high-power GPUs and CPUs [3] - The commercial model for the liquid cooling industry includes hardware sales and service-oriented approaches, with significant procurement concentrated in the internet, telecommunications, and government sectors [3] Industry Chain Development - The liquid cooling industry chain has formed a complete matrix covering server manufacturing, temperature control in data centers, core components, and cooling materials, allowing companies to build differentiated competitive advantages [4] - Companies like Guangdong Liying Intelligent Manufacturing and Shenzhen New Zobang Technology are actively expanding their core business in response to favorable policies and increasing AI computing demands [4][5] Technological Advancements - Liquid cooling solutions can reduce energy consumption by 50% and achieve a Power Usage Effectiveness (PUE) of below 1.05, showcasing their efficiency [5] - Industry players are focusing on high-barrier segments, enhancing the purity of fluorinated liquids, and improving microchannel design and sealing technology to boost product competitiveness [5]

Core Insights - Feilong Co., Ltd. announced on October 13 that its current liquid cooling products mainly consist of electronic pumps and temperature control valves, with plans to gradually expand into integrated module products [1] - The company is currently focusing on cold plate liquid cooling technology while accelerating the research and application of immersion liquid cooling technology [1]

Core Viewpoint - Feilong Co., Ltd. announced on October 13 that its liquid cooling pump series products are following a platform-based, lineage-based, and customized development path, enhancing its technological leadership in the industry [1] Group 1: Product Development - The company has successfully increased the maximum power of its electronic water pumps to 40 kW through continuous technological research and development, further strengthening its competitive edge [1] - Related products have already achieved mass production in some customer projects, indicating successful implementation and market acceptance [1]

Core Viewpoint - Chuanhuan Technology (300547.SZ) has completed the initial sample development of its liquid cooling connector products and is currently in the customer promotion, feedback, and further optimization design phase [1] Group 1 - The company is actively promoting its self-developed advantageous products to liquid cooling customers [1] - The next steps will follow the customer process to advance subsequent work [1] - The company is seeking more potential cooperation opportunities in the liquid cooling sector [1]

Core Insights - Feilong Automotive Parts Co., Ltd. held an investor meeting with 27 institutions and individual investors, focusing on the company's developments and future strategies [1] - The company has transitioned from a focus on automotive thermal management components to expanding into civilian sectors since 2017, while maintaining its core automotive business [1][2] - The subsidiary, Anhui Hangyi Technology Co., Ltd., specializes in non-automotive liquid cooling pumps, particularly for data centers and renewable energy applications [1][2] Company Overview - Founded in 1952, Feilong has evolved through two main phases: pre-2017 focused on automotive components, and post-2017 on diversification into civilian markets [1] - The company boasts a national-level enterprise technology center and four R&D centers, serving over 300 factory bases domestically and internationally [1] Product and Technology Focus - The company's new energy thermal management products include electronic pumps and temperature control valves, applicable in various cutting-edge fields such as automotive and data center cooling [2] - Current liquid cooling products primarily consist of electronic pumps and temperature control valves, with a focus on cold plate liquid cooling technology and ongoing development of immersion cooling technology [2] Client and Market Engagement - Feilong has established connections with over 80 clients across six major sectors, including server cooling, charging stations, hydrogen energy, and modern agricultural machinery [2] - The company is actively expanding its overseas market presence in the server liquid cooling sector, with over 120 projects in progress, some of which have already entered mass production [2] Production Capacity and Future Strategy - The company operates four liquid cooling production lines, with an expected annual capacity of up to 1.2 million units, adaptable based on order demand [2] - Future strategies include solidifying automotive thermal management business, expanding overseas markets, and integrating thermal management technologies into emerging sectors such as robotics [2]

Group 1: Company Overview - Feilong Automotive Parts Co., Ltd. has over 70 years of development history, established in 1952, focusing on thermal management system solutions [3] - The company has two main development phases: prior to 2017 focused on automotive thermal management components, and from 2017 onwards, expanding into civilian markets [3] - Currently, the company has established four R&D centers and serves over 300 factory bases globally, with more than 200 domestic and international clients [3] Group 2: Subsidiary Information - Anhui Hangyi Technology Co., Ltd. was established in July 2025 with a registered capital of 50 million RMB, focusing on non-automotive liquid cooling pumps [3] - The company aims to become a leader in IDC liquid cooling pump technology, offering solutions ranging from 16W to 22kW [3] Group 3: Product Applications - The company's new energy thermal management products, including electronic pumps and temperature control valves, are applicable in various fields such as automotive, data centers, AI cooling, and renewable energy [4] - The liquid cooling products are primarily based on cold plate technology, with plans to expand into immersion cooling technology [5] Group 4: Client Collaborations - The company has established connections with over 80 clients in the liquid cooling sector, with more than 120 ongoing projects, some of which have entered mass production [7] - Key clients include major players in server cooling, charging stations, and renewable energy sectors [7] Group 5: Production Capacity - The company has four production lines for liquid cooling products, with an expected annual capacity of up to 1.2 million units [7] - Current production capacity is sufficient to meet the rapid growth demands of the liquid cooling business [7] Group 6: Future Development Strategy - The company aims to solidify its automotive thermal management business while expanding into new applications such as server cooling and AI [8] - Plans to leverage its subsidiary in Thailand to enhance its presence in Southeast Asia and Central Asia [8] - Focus on integrating thermal management technology with emerging industries like robotics to drive long-term growth [8]