Investment Rating - The report assigns a "Buy" rating for the company, with a target price of 43.7 CNY based on a 2026 PE of 43x [5][62]. Core Insights - The company is positioned in the top four in the domestic market share for charging modules as of 2024, indicating a strong competitive position [1][30]. - The data center HVDC power modules are expected to provide a new growth curve for the company, leveraging technology similarities with existing products [3][48]. - The company plans to accelerate capital expenditures, with a convertible bond issuance aimed at raising up to 520 million CNY for investment in data center power supply systems and module R&D [3][53]. Summary by Sections Industry Overview - The charging module industry has seen significant consolidation, with the number of major suppliers decreasing from over 30 in 2015 to around 10 by 2023 [2][31]. - The demand for charging modules is driven by the growth in electric vehicle sales, despite a significant drop in prices from approximately 0.8 CNY/watt in 2015 to about 0.13 CNY/watt by the end of 2019 [2][31]. Product Development and Market Position - The company has rapidly iterated its products to meet market demands, introducing high-power and cost-effective charging modules [2][27]. - The company is expanding into other downstream sectors, including smart grids and aerospace, with a focus on domestic production of specialized power supplies [2][36]. Financial Projections - Revenue projections for 2025-2027 are 1.33 billion, 1.69 billion, and 2.19 billion CNY, representing growth rates of 10%, 27%, and 30% respectively [4][59]. - The forecasted net profit attributable to the parent company for the same period is 80 million, 180 million, and 260 million CNY, with year-on-year growth rates of 233%, 123%, and 48% [4][59]. Valuation and Comparison - The company is compared favorably against peers, with a projected 2026 PE of 43x, which is higher than competitors like Youyou Green Energy and Shenghong Shares [4][62]. - The report highlights the potential for significant profit growth driven by the data center HVDC power modules and the ongoing demand for specialized power supplies [4][62].

Summary of Conference Call Records Industry Overview - The data center power supply architecture is evolving towards High Voltage Direct Current (HVDC) systems, with major overseas companies like Microsoft, Google, Meta, and Nvidia leading the charge in adopting 400V and 800V architectures to enhance energy efficiency and reduce costs in response to the growing energy demands of AI computing [1][6][8]. Key Points and Arguments HVDC Adoption - Microsoft is implementing the Mont Diablo separated power architecture, which can be upgraded to 400V HVDC in the future [1][4]. - Google is designing a positive and negative 400V DC distribution solution, aiming for data center-level integration [1][4]. - Meta is following a three-step approach to achieve megawatt-level positive and negative 400V HVDC [1][4]. - Nvidia plans to launch an 800V power supply architecture after 2027, supporting higher rack power [1][5]. Cost and Efficiency Benefits - HVDC systems improve transmission efficiency and reduce costs by minimizing copper usage, which is crucial given the significant energy consumption increase in data centers [6][7]. - The integration of HVDC with renewable energy sources can form microgrids, optimizing energy management and achieving sustainability goals [1][7]. Transition Phases - Short-term upgrades will focus on enhancing Power Supply Units (PSUs) from 3.3 kW to 12 kW, suitable for existing data center retrofits [1][9]. - Mid-term transitions will move towards positive and negative 400V or 800V HVDC systems, while long-term plans involve direct adoption of 10 kV medium voltage to high voltage DC [1][9][10]. Additional Important Insights Domestic vs. Overseas Developments - Domestic HVDC systems primarily use 240V DC for compatibility reasons, but some companies are planning to develop 400V or 800V products due to the limitations of 240V in high-power server applications [3][13]. - Companies like Alibaba, Baidu, and Tencent are also exploring HVDC solutions, with Alibaba's Panama power supply being a notable example [3][15]. Company Strategies - Delta, Zhongheng, and Kehua are actively developing HVDC products, covering both positive and negative 400V and 800V systems [3][16]. - Investors are advised to focus on companies like Zhongheng, Kehua, and Oulu Tong, which are expected to benefit from the increasing penetration of HVDC systems [18]. Future Market Trends - The market is expected to see a shift towards higher power density requirements, particularly in the overseas market, driven by the need for efficient AC/DC and DC/DC converters [17][18]. - The integration of 800V to 50V DC/DC converters directly into server motherboards may reduce the need for external converters in the future [17][18]. This summary encapsulates the key developments and strategic directions in the HVDC sector, highlighting the ongoing transition in data center power supply architectures and the implications for industry players and investors.