Core Viewpoint -津上机床中国 (01651) has seen a significant stock price increase, rising over 10% and reaching a new high of 35.88 HKD, with a year-to-date increase of 200% [1] Financial Performance - For the first half of the fiscal year 2026 (April-September 2025), the company expects to achieve a net profit attributable to shareholders of 502 million RMB, representing a year-on-year increase of approximately 48% [1] - The board attributes the growth in performance to the continuous recovery of the domestic economy and the transformation and upgrading of China's manufacturing industry [1] Industry Trends - The rapid development in user sectors such as new energy vehicles and artificial intelligence has created new demand for the machine tool industry [1] - The company has been actively exploring and penetrating various segments of the manufacturing industry, leading to an increased demand for its CNC high-precision machine tools [1] Market Position - According to CICC, the company's forecasted profit growth of 48% significantly exceeds the average growth level in the industry, positioning it as a core leader in the recovery process of the machine tool industry [1] - The largest downstream sector for the company is automotive parts, benefiting from the capital expenditure boom [1] Growth Opportunities - The company is intensifying its layout in the liquid cooling sector, which is expected to open up a new growth curve [1] - The company has reached a cooperation intention with leading liquid cooling equipment enterprises, anticipating that this business will contribute to revenue in 2026, becoming the second growth curve after the automotive parts sector [1]

Core Viewpoint - Tsugami Machine Tool China (01651) has seen its stock price increase by over 200% this year, reaching a new high of 35.88 HKD, driven by strong earnings expectations and growth in the machine tool industry [1] Financial Performance - For the first half of the fiscal year 2026 (April-September 2025), the company expects to achieve a net profit attributable to shareholders of 502 million RMB, representing a year-on-year increase of approximately 48% [1] - The board attributes this growth to the ongoing recovery of the domestic economy and the transformation of China's manufacturing sector [1] Industry Trends - The rapid development in user fields such as new energy vehicles and artificial intelligence has created new demand for the machine tool industry [1] - The company has been actively expanding and penetrating various segments of the manufacturing industry, leading to increased demand for its CNC high-precision machine tools [1] Market Position - According to CICC, the company's forecasted profit growth of 48% significantly exceeds the average growth level in the industry, positioning it as a core leader in the recovery of the machine tool sector [1] - The primary downstream market for the company is automotive parts, benefiting from the capital expenditure boom [1] Growth Opportunities - The company is intensifying its layout in the liquid cooling sector, which is expected to open up new growth avenues [1] - It has established cooperation intentions with leading liquid cooling equipment companies, anticipating revenue contributions from this business segment in 2026, marking it as the second growth curve after automotive parts [1]

Group 1 - The domestic demand for power batteries is expected to continue to rise, benefiting from the upward trend in the energy storage sector, with full production schedules in lithium batteries and upstream materials, indicating a clear trend of price increases and potential for both volume and profit growth [1] - New technologies such as solid-state batteries are maturing, and both domestic and international efforts to promote industrialization will open up growth opportunities [1] - The European energy storage market is experiencing explosive growth driven by both policy and economic factors, with new large-scale storage installations expected to reach 8.8 GWh and 16.3 GWh in 2024 and 2025, respectively, representing year-on-year growth of 79.6% and 85.2% [1] Group 2 - Leading domestic companies are leveraging technological advantages and localized strategies to secure orders in Europe [1] - The acceleration of green hydrogen and green ammonia industrialization in the wind power sector is highlighted, with significant projects such as the 3 GW wind power hydrogen ammonia project by Goldwind Technology receiving approval [1] - The demand for green hydrogen is projected to reach 5 million tons per year in the future [1] Group 3 - In the power equipment sector, the liquid cooling segment benefits from the high prosperity of AIDC, with domestic manufacturers holding competitive advantages in CDU and cold plate segments [1] - The Guotai New Energy ETF (159387) tracks the Innovation Energy Index (399266), which has a maximum fluctuation of 20%, focusing on companies involved in clean energy production, storage, and application [1] - The index emphasizes companies with technological innovation capabilities and high growth potential, primarily in solar energy, wind energy, electric vehicles, and related equipment manufacturing [1]

Core Insights - The liquid cooling sector has shown strong performance this year, driven by technological advancements, policy support, economic advantages, and industry leadership from major players [2][8] - The transition from traditional air cooling to liquid cooling is essential due to the increasing power density of AI computing, indicating a significant upgrade in cooling technology [2][8] - The market penetration of liquid cooling is expected to see a substantial increase from late 2025 to 2026 with the mass production of new models [2][8] Market Space and Competitive Structure - Air cooling currently dominates the server cooling technology market, accounting for over 80%, but liquid cooling penetration is rapidly increasing from single digits in 2023 [3][9] - The liquid cooling market for NVIDIA GPUs and cloud service provider ASIC chips is projected to reach approximately 100 billion by 2026 [3][9] - Liquid cooling solutions have a value per rack that is 5-15 times higher than traditional air cooling, with total rack values ranging from tens of thousands to 100,000 USD [3][9] - The leading companies in liquid cooling solutions and key components have a concentrated market share, primarily from the Taiwanese supply chain, but domestic companies are gaining traction [3][9] Future Outlook and Industry Trends - The liquid cooling sector is transitioning from an introduction phase to a high-growth phase, with significant potential and sustainability [4][10] - The industry is expected to see a near doubling of market penetration next year compared to this year, driven by the introduction of next-generation solutions [4][10] - Future investments should focus on companies that have established relationships with top clients, possess core technological advantages, and demonstrate consistent performance [4][10] - The industry's growth will require both internal cost reduction and external demand policy coordination [4][10]

Core Insights - Fund managers are increasingly focusing on the liquid cooling sector, driven by the recent financial reports from major internet companies, indicating a significant rise in capital expenditures related to AI infrastructure [1][2][3] - The liquid cooling technology is seen as a critical upgrade for AI computing facilities, with a growing demand expected as companies invest heavily in this area [2][4] Group 1: Investment Opportunities - Liquid cooling has emerged as the highest yielding sector for fund managers, with companies like Inspur Information, Invec, Feilong Co., and others becoming popular among funds [2][3] - Recent performance data shows that top-performing funds have achieved returns of up to 49.65% in the last month, largely due to heavy investments in the liquid cooling sector [2] - The capital expenditures of major companies like Alibaba and Tencent have significantly increased, with Alibaba reporting a 219.8% year-on-year growth in capital expenditures to 38.68 billion yuan [3] Group 2: Technological Upgrades - The shift from traditional air cooling to liquid cooling is driven by the increasing power density of AI chips, necessitating more efficient cooling solutions [4][5] - Liquid cooling is becoming a technical necessity as the demand for cooling solutions surpasses the limits of traditional air cooling methods, marking a pivotal year for the industry [4][5] - The long-term economic benefits of liquid cooling, including lower lifecycle costs, are making it an essential technology in the industry [4] Group 3: Market Dynamics - The liquid cooling market is expected to see a significant increase in penetration rates, with projections indicating a potential doubling of market share in the coming year [9] - Fund managers emphasize the importance of companies having established relationships with major overseas clients, particularly in the AI sector, as a key factor for investment decisions [6][7] - The liquid cooling sector is anticipated to transition from a phase of speculative trading to one driven by fundamental performance, as companies work to convert technological advancements into tangible results [9]

Investment Rating - The report assigns a "Buy" rating for the company, indicating an expectation that the stock price will exceed the market benchmark by more than 15% within the next six months [3]. Core Insights - The company is a leading manufacturer of aluminum photovoltaic structural components, with a diversified product matrix that strengthens its market position. It has successfully entered the supply chains of major global component manufacturers [8]. - The implementation of anti-involution policies is expected to optimize the industry landscape, benefiting the company's main business and improving profitability as it capitalizes on enhanced bargaining power and margin recovery [8]. - The company is rapidly expanding its production capacity both domestically and in Vietnam, aiming to capture high-end overseas markets. The new production bases are projected to significantly increase market share [8]. - The acquisition of Jienowei allows the company to enter the liquid cooling market, leveraging advanced technology to meet the cooling needs of high-power density battery cells, thus opening new growth avenues [8]. - Revenue projections for 2025-2027 are estimated at 137.82 billion, 174.99 billion, and 235.86 billion yuan, with corresponding net profits of 1.34 billion, 4.09 billion, and 5.56 billion yuan, reflecting strong growth potential [8]. Financial Summary - The company anticipates a revenue increase of 51.80% in 2024, followed by 68.42% in 2025, and a steady growth rate of 26.97% and 34.78% in 2026 and 2027 respectively [2]. - The projected net profit for 2024 is 268 million yuan, with a significant recovery expected in 2025 and 2026, reaching 409 million and 556 million yuan respectively [2]. - Earnings per share are forecasted to be 1.29 yuan in 2024, decreasing to 0.56 yuan in 2025, and then recovering to 1.72 yuan and 2.34 yuan in 2026 and 2027 respectively [2].