Group 1: Market Overview - Global equity markets showed strong performance in Q4 2025, supported by easing inflation and positive economic data [1] - The Hardman Johnston Global Equity Strategy achieved a return of 2.91%, underperforming the MSCI AC World Net Index which gained 3.29% [1] - The Financials and Consumer Staples sectors contributed positively to performance, while Industrials and Consumer Discretionary sectors detracted [1] Group 2: Company Focus - Vertiv Holdings Co. - Vertiv Holdings Co. (NYSE:VRT) is recognized for providing critical digital infrastructure technologies and lifecycle services for data centers and communication networks [2] - The stock of Vertiv Holdings Co. experienced a one-month return of 16.79% and a 52-week gain of 71.29%, closing at $189.21 per share with a market capitalization of $72.342 billion on January 27, 2026 [2] - The company was re-entered into the portfolio in late 2025 after a correction, following an initial investment during its IPO in 2020 [3] Group 3: Financial Performance and Projections - Vertiv reported a strong Q3 performance with orders growth of +60% year-over-year, achieved without significant contributions from recent mega data-center deals [3] - Updated forecasts indicate an above-consensus revenue outlook into 2026, driven by strength in hyperscale and AI-related capital expenditures [3] - Management anticipates ~100GW of incremental data-center capacity additions from 2024 to 2029, potentially generating ~$60 billion in incremental revenue for Vertiv, with a conservative operating margin forecast of ~23% by 2029 [3]

Core Viewpoint - Vertiv Holdings Co. is identified as a strong investment opportunity for 2026, with analysts expressing a preference for growth-oriented companies in the electrical equipment and multi-industry sector [1][2]. Group 1: Analyst Ratings and Price Targets - JPMorgan analyst Stephen Tusa lowered the price target for Vertiv to $225 from $230 while maintaining an Overweight rating [1]. - RBC Capital increased its price target for Vertiv to $200 from $196 while keeping an Outperform rating, indicating a positive outlook for 2026 [2]. Group 2: Market Conditions and Growth Drivers - RBC Capital noted a two-speed economy within the industry, highlighting robust growth in the data center segment at mid-teen percentages, while other industrial segments are experiencing sluggish demand with low-single digit growth [3]. - Despite broader industrial challenges, analysts remain optimistic about Vertiv due to long-term growth drivers such as electrification, reshoring, energy storage, and the ongoing energy transition [3]. Group 3: Company Overview - Vertiv Holdings Co. specializes in designing, manufacturing, and servicing critical digital infrastructure technologies and lifecycle services for data centers, communication networks, and commercial and industrial environments across various regions including the Americas, Asia Pacific, Europe, the Middle East, and Africa [4].

Group 1 - Forgent Power Solutions (FPS) has submitted an IPO application aiming to raise up to $1.62 billion, highlighting investor interest in AI infrastructure companies [1][2] - The company plans to issue 56 million shares at a price range of $25 to $29 per share, potentially valuing Forgent at approximately $8.8 billion post-IPO [1] - Forgent's core business involves manufacturing critical power supply equipment for data centers, including transformers, distribution panels, and power distribution units, essential for uninterrupted operations [1] Group 2 - The IPO coincides with accelerated capital expenditures in the AI and cloud infrastructure sectors, with companies like OpenAI planning to invest over $1 trillion in related infrastructure [2] - Forgent has production facilities in Minnesota, Texas, Maryland, California, and Mexico, employing around 2,000 full-time staff as of September 30 [2] - For the three months ending September 30, Forgent reported revenues of $283 million and a net profit of $10 million, compared to $154 million in revenue and $6.3 million in net profit for the same period last year [2]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Data Center Equipment in China - **Key Companies**: Kstar and Megmeet Core Insights 1. **Accelerating Shipment Growth**: Both Kstar and Megmeet expect significant growth in AIDC power equipment shipments starting from 2026, driven by an increase in AIDC capital expenditures [2][3] 2. **Market Share Gains**: There is potential for both companies to gain market share from US hyperscalers due to slow capacity expansion among global power equipment manufacturers and the introduction of new power technologies [2] 3. **Next-Generation Technology**: The ramp-up of 800VDC technology is anticipated to begin by the end of 2026, with commercialization of SST expected around 2028 [2] Company-Specific Insights Kstar 1. **US Orders Growth**: Kstar is experiencing positive progress in US-related UPS orders, which are expected to contribute to earnings in 2026 [3] 2. **Product Demand**: The company anticipates a strong demand for UPS systems, particularly the 600kW models, while also expecting to increase shipments of products over 1MW starting in 2026 [3] 3. **New Customer Acquisition**: Kstar plans to expand its customer base domestically, targeting companies like Bytedance, Kuaishou, and JD [3] 4. **HVDC Prototype**: A HVDC prototype is expected to be delivered in February 2026, with validation and delivery commencing in the second half of 2026 [3] 5. **BESS Shipment Recovery**: Kstar expects a recovery in BESS shipments and margins into 2026, driven by demand in Europe and Southeast Asia [3] Megmeet 1. **Strong Order Backlog**: Megmeet has a solid order book, which supports its optimistic outlook for overseas shipment growth and market share gains starting in 2026 [4] 2. **Supplier Selection Involvement**: US CSPs are increasingly involved in the supplier selection process for AIDC power equipment, which could benefit Megmeet [4] 3. **Cost Management**: Management expects R&D and SG&A expenses as a percentage of revenue to decrease as the AIDC power equipment business scales, leading to a recovery in net margins [4] 4. **800VDC Product Showcase**: Megmeet showcased its 800VDC product at the 2025 OCP, with plans to send a prototype for trial testing in mid-2026 [4] Risks and Considerations 1. **Downside Risks**: Major risks for the data center equipment sector include slower-than-expected growth in AI data center capacity, slower penetration of high-power density products, and challenges in gaining market share in the overseas AIDC equipment supply chain [6]

Company Overview - Vertiv Holdings Co (NYSE: VRT) designs, manufactures, and manages power and cooling systems specifically for data centers and digital networks, providing essential services to ensure these systems operate efficiently [2]. Market Position - The company is recognized for its Liebert cooling systems, which are considered top-tier in the industry, with a strong historical reputation dating back to the 1980s [2]. - Despite current market sentiment being unfavorable towards data center stocks, Vertiv is expected to remain a necessary player in the industry due to its essential products [1]. Financial Insights - Vertiv's order book is reported to be robust, indicating strong demand for its products and services [2]. - The stock experienced a decline attributed to market reactions related to CyrusOne, but the underlying fundamentals suggest it remains a viable investment opportunity [2]. Investment Sentiment - There is a belief that while Vertiv has potential as an investment, other AI stocks may present greater upside potential with less risk [3].

Company Overview - Vertiv Holdings has a history dating back to 1946, initially developing air-cooling systems for data rooms and later expanding into computer room air conditioning units in 1965, which allowed for precise temperature and humidity control [8] - The company has grown its data center portfolio through internal product development and acquisitions, offering thermal and power management products globally [8] Current Market Status - Vertiv Holdings is currently trading at $176.77, with a volume of 3,270,867 shares, reflecting a 0.91% increase [10] - The stock is approaching overbought territory according to RSI readings, and an earnings release is anticipated in 21 days [10] Analyst Insights - Two industry analysts have provided insights, suggesting an average target price of $212.5 for Vertiv Holdings [9] - JP Morgan maintains an Overweight rating with a target price of $225, while Barclays has upgraded its rating to Overweight with a revised target of $200 [9][11] Options Trading Activity - Recent options trading for Vertiv Holdings shows a split sentiment among large investors, with 40% bullish and 42% bearish positions [2] - A total of 40 uncommon options trades were identified, with 8 puts totaling $1,089,309 and 32 calls totaling $2,534,170 [2] - The significant options activity indicates a price target range from $55.0 to $280.0 over the past quarter [3][4]

Core Insights - Vertiv is collaborating closely with Nvidia to develop an 800-volt DC power portfolio, positioning itself as a key partner for next-generation AI data centers [1] - The company reported a strong financial performance with $462 million in free cash flow and $1.4 billion in cash and equivalents, supporting its expansion plans [1] - Vertiv's book-to-bill ratio stands at 1.4 times with a backlog of $9.5 billion, indicating a robust revenue forecast for 2026 [2] Financial Performance - Vertiv's organic sales reached $2.6 billion in Q3, reflecting nearly 30% year-over-year growth, with the Americas showing over 40% growth [3] - Adjusted EPS increased by 63% year-over-year to $1.24, and full-year earnings are projected to be $4.10 per share, up around 44% year-over-year [2][6] - Free cash flow is expected to be $1.5 billion for the year, demonstrating strong financial health [6] Market Position and Growth Strategy - Vertiv is expanding its offerings in thermal control, high-density racks, power distribution, and advanced services to strengthen its competitive position as AI workloads grow [2] - The company plans to increase R&D spending by over 20% by 2026 to stay ahead of future GPU generations [2] - Analysts expect earnings growth of 45% in 2025 and 29% in 2026, indicating long-term growth potential beyond short-term AI investments [7] Stock Performance and Analyst Ratings - Vertiv's stock (VRT) has increased by 34% over the past 52 weeks, outperforming the S&P 500 Index's gain of 17% [4] - The stock holds an overall rating of "Strong Buy" from Wall Street, with 18 out of 24 analysts recommending it as a "Strong Buy" [8] - The average target price for VRT is $196.05, suggesting a potential upside of 12% from current levels [8]

Core Viewpoint - The company has developed a comprehensive range of products and systems including UPS power supplies, high-voltage direct current (HVDC) power supplies, temperature control equipment, lead-acid/lithium batteries, micro-modules, and power modules, targeting AI computing applications with key products like PowerFort integrated power modules and megawatt-level UPS systems [1] Group 1: Domestic Market Strategy - The company has established deep partnerships with major domestic internet giants and leading IDC service providers such as ByteDance, JD.com, Alibaba, Baidu, GDS, and Century Interconnect, solidifying its foundation for local business development [1] Group 2: International Market Expansion - The company is building a channel cooperation system through core agents, operators, and EPC contractors to strengthen its presence in Europe and Southeast Asia while actively expanding into emerging markets like North America and Australia [1]

Summary of Key Points from the Conference Call Transcript Industry Overview - **Industry**: China Data Center Equipment - **Key Focus**: Power and cooling upgrades, particularly related to NVIDIA's Vera Rubin platform launch in 2026 [2][3] Core Insights and Arguments - **NVIDIA's Rubin Platform**: - The Rubin platform is set to double the rack power compared to the previous Blackwell platform, moving from 80% to 100% liquid cooling [2] - Rubin is currently in full production [2] - **VR200 NVL72 Specifications**: - Delivers approximately 3.5x to 5x the training/inference AI computing power compared to GB300 NVL72, significantly increasing rack-level power demand [3] - Upgrades power shelves to a 3*3U 110 kW configuration, compared to the GB300's 8*1U 33 kW shelves [3] - Introduces a 3+1 redundancy design for power shelves [3] - **Future Developments**: - Anticipation of transitioning to the next-generation Kyber rack design, which will support 800V HVDC to meet rising power requirements driven by AI compute scaling [3] - Potential launch of Rubin Ultra in 2027 could further unleash HVDC demand [3] Investment Opportunities - **Stock Picks**: - **Kstar and Kehua**: Expected to benefit from stronger UPS demand and potential upgrades to HVDC and SST [4] - Kstar is anticipated to have strong order intake from US hyperscalers due to strategic partnerships [4] - Kehua's domestic GPU ramp-up and H200 shipment could enhance order intake from domestic hyperscalers [4] Risks and Valuation - **Downside Risks for Data Center Equipment Sector**: - Slower-than-expected AI data center capacity growth [6] - Slower penetration of high-power density products [6] - Challenges in gaining market share in the overseas AIDC equipment supply chain [6] - **Kehua's Price Target and Risks**: - Price target based on DCF methodology; downside risks include slower IDC capacity expansion and lower overseas shipment expectations [7] - Upside risks include faster IDC capacity expansion and stronger relationships with hyperscalers [7] - **Kstar's Price Target and Risks**: - Similar DCF methodology for price target; downside risks include slower IDC capacity expansion and new entrants in the market [8] - Upside risks include faster IDC capacity expansion and higher overseas shipments [8] Additional Important Information - **Analyst Team**: The report was prepared by UBS Securities Asia Limited, with analysts Yishu Yan, Anna Yuan, and Ken Liu involved [5] - **Valuation Methodology**: The report emphasizes the use of DCF methodology for price targets and highlights the importance of understanding risks before making investment decisions [7][8] This summary encapsulates the critical insights and data from the conference call, focusing on the developments in the China data center equipment industry, particularly regarding NVIDIA's advancements and the implications for investment opportunities in Kstar and Kehua.

Core Viewpoint - Investor scrutiny around Super Micro Computer, Inc. is increasing as Wall Street evaluates the company's strong position in AI servers against concerns regarding margins, competition, and long-term profitability [1] Group 1: Analyst Coverage - Goldman Sachs initiated coverage of Super Micro with a Sell rating and a price forecast of $26 per share, recognizing the company's favorable positioning for large AI infrastructure buildouts [2] - Despite the positive industry outlook, Goldman Sachs highlighted profitability as a key risk, citing limited visibility into improving profitability due to large, margin-dilutive deals and rising input costs [3] Group 2: Growth Drivers - Super Micro is aggressively investing in advanced AI infrastructure, expanding U.S.-based manufacturing and liquid-cooling capabilities to support next-generation AI data centers based on Nvidia's Vera Rubin platforms [4] - The company aims to be an early supplier of rack-scale systems for large-scale AI training and inference workloads, leveraging its modular data center architecture for faster customization and deployment [5] Group 3: Governance and Margin Pressures - Super Micro's stock has faced pressure due to slowing revenue growth and compressed margins, alongside scrutiny over internal control weaknesses and governance issues, including a missed filing deadline that led to its auditor's resignation [6] - Management has initiated remediation efforts but has warned that risks remain as it seeks to restore investor confidence while pursuing its AI-driven growth strategy [6] Group 4: Stock Performance - As of the time of publication, Super Micro Computer shares were down 5.68% at $28.41 [7]