Market Overview - The market opened low but rose throughout the day, with the ChiNext Index increasing nearly 3% in the afternoon. The trading volume exceeded 2 trillion for the third consecutive day, with over 4,600 stocks in the Shanghai, Shenzhen, and Beijing markets showing gains [1][7]. Key Sectors Glass Fiber Sector - The glass fiber sector experienced a surge, with multiple stocks hitting the daily limit, including Honghe Technology and Dongcai Technology. Guotai Junan's report indicated that PCB manufacturers and key Q fabric suppliers expect to advance the mass production of M9 products for 1.6T switches, which could lead to increased demand for Q fabric [3][5]. Liquid Cooling Sector - The liquid cooling sector continued its strong performance, with stocks like Dayuan Pump Industry and Feilong Co. hitting the daily limit. The sector is seen as having significant growth potential, with a complete system solution being more competitive in the future [5][6]. Financial Sector - The financial sector showed strong performance, with Changcheng Securities achieving a three-day limit increase. The total margin financing and securities lending balance reached 2,055.208 billion, indicating a growing interest in equity markets [7][8]. Notable Stocks - Honghe Technology (603256.SS) reached a price of 32.86 with a gain of 10.01% and a market cap of 289.08 billion [4]. - Dayuan Pump Industry (603757.SS) saw a price of 47.14 with a gain of 10.01% and a market cap of 77.66 billion [6]. - Changcheng Securities (002939.SZ) reached a price of 12.06 with a gain of 10.04% and a market cap of 420.61 billion [8]. Additional Insights - Other sectors such as photovoltaic, PCB, domestic chips, and pharmaceuticals also showed positive performance, while military and Xinjiang concepts faced declines [9].

Core Viewpoint - The liquid cooling sector is experiencing a significant surge, with expectations that it will become a major growth area similar to the optical module market, driven by increasing demand for cooling solutions in high-performance computing and AI applications [1][3]. Market Performance - On August 15, the liquid cooling sector saw over 27 stocks rise by more than 5%, with 13 stocks hitting the daily limit or increasing by over 10%. Notable performers included Dayuan Pump Industry and Jintian Co., which both showed strong gains [1]. - The overall A-share market was robust, with the Shanghai Composite Index closing up 0.83% at 3696.77 points, and the ChiNext Index rising over 2% [1]. Price Dynamics - In August, the price of liquid cooling quick connectors surged from 700 yuan to 2100 yuan, a 200% increase, while cold plate prices rose from 1500 yuan/kW to 1800 yuan/kW. This reflects a significant demand increase as power consumption in data centers rises [2]. - The penetration rate of liquid cooling is expected to increase from less than 15% in 2023 to over 50% by 2025, driven by the need for efficient cooling solutions in high-power computing environments [2]. Industry Growth - The global liquid cooling market is projected to exceed 70 billion yuan by 2026, which is four times the size of the PCB market during the same period [2]. - Vertiv, a leading overseas liquid cooling company, reported revenue of $2.638 billion for Q2 2025, exceeding guidance and indicating strong demand for liquid cooling solutions [3]. Technological Trends - Liquid cooling technology is becoming essential for managing the heat generated by AI chips, with NVIDIA's GB300 platform fully adopting liquid cooling designs, positioning it as a mainstream solution in data centers [4]. - The liquid cooling industry is expected to enter a rapid growth phase from late 2025 to 2026, benefiting from technological advancements and increased adoption [5]. Investment Opportunities - The liquid cooling supply chain includes upstream components, midstream system integration, and downstream applications, with significant investment opportunities in high-barrier upstream segments [5]. - Analysts believe that liquid cooling represents a more favorable investment compared to existing hot sectors, given its early development stage and low penetration rate [5].

2025 年 08 月 14 日 液冷：下一个光模块&PCB 策略研究团队 ——投资策略专题 韦冀星（分析师） 简宇涵（分析师） weijixing@kysec.cn 我们多篇报告一直明确：市场的结构是【双轮驱动】：其一为全球科技共舞下的 成长品类提供强劲的弹性，其二为"反内卷"牵头下周期与顺周期交易 PPI 修复 的扩散行情。我们于 7 月 29 日发布了《市场的双轮驱动系列一——交易 PPI》， 于 8 月 8 日发布了《市场的双轮驱动系列二——全球科技共舞》。 在双轮驱动行情下，"坚守自我，科技为先"尤为重要。我们于 8 月 3 日发布的 《坚守自我，科技为先》中提出：不应该在积极的市场中做"惊弓之鸟"，调整 后的布局更为关键。 科技当中的下一个光模块&PCB：液冷 AI 算力链条我们一直持续推荐，我们于 7 月 12 日、8 月 3 日、8 月 8 日、8 月 9 日多次提示 AI 硬件的投资机会。AI 算力链条景气度高、业绩确定性强，是当下 市场科技主线的核心。 光模块、PCB 是 AI 算力链的重要组成部分，二者深度绑定海内外 AI 算力基础 设施的建设浪潮，并跟随 AI 服务器不断迭代，无论是出 ...

Core Viewpoint - The computing power sector has experienced a significant surge, becoming one of the most attractive investment themes in the A-share market, driven by factors such as relaxed sales policies from Nvidia, increased capital expenditure from North American cloud providers, and a surge in global AI model releases [2][6]. Group 1: Market Performance - The computing power sector saw a notable increase in various sub-sectors, particularly on August 13, with companies like Cambricon reaching a peak stock price of 868 yuan, closing at 860 yuan, with a total market capitalization of 359.8 billion yuan [3]. - Industrial Fulian also hit a historical high, closing at 43.68 yuan per share, with a single-day trading volume exceeding 10 billion yuan, reflecting strong market interest in AI server leaders [3]. - In the optical module sector, companies such as NewEase and Zhongji Xuchuang experienced significant stock price increases, with NewEase rising by 15.55% to 236.56 yuan and Zhongji Xuchuang increasing by 11.66% to 252 yuan [3]. Group 2: Computing Power Leasing Concept - The computing power leasing concept showed strong rebounds, with companies like Hangang Co. hitting the daily limit, and other related stocks such as Yuke De and Hongbo Co. also seeing significant gains [4]. - Analysts noted that the explosive growth in AI model training and inference demand has redefined computing resources as the "new oil" of the digital age, leading to a reassessment of companies with stable computing power supply [4]. Group 3: Liquid Cooling Technology - Liquid cooling technology, a key component of computing infrastructure, has attracted significant investment, with stocks like Southern Pump Industry and Yonggui Electric rising over 12% [4]. - The strong performance of the liquid cooling sector is attributed to multiple factors, including the increasing power consumption of Nvidia's GB300 chip and a surge in orders for liquid cooling equipment from global cloud providers [4][5]. - The global liquid cooling market is projected to exceed 200 billion yuan by 2025, with China accounting for 35% of this market [5]. Group 4: Driving Factors - Four main factors are driving the rise of the computing power industry: Nvidia's relaxed sales policies towards China, explosive capital expenditure growth from North American cloud providers, the dense release of global AI models, and breakthroughs in the domestic computing power supply chain [6][7][8]. - Nvidia's potential permission to sell AI chips to China has injected confidence into the computing power supply chain, leading to a collective rise in Nvidia-related stocks [6]. - Capital expenditure from major tech companies like Google, Microsoft, and Amazon reached 159.384 billion USD in the first half of 2025, marking a 24.4% year-on-year increase, indicating strong demand for AI infrastructure [7]. - The release of advanced AI models, such as OpenAI's GPT-5, has further fueled the demand for computing power, with industry leaders pushing for rapid technological iterations [8].

Core Viewpoint - The A-share market is experiencing a strong upward trend, with significant growth in the computing power industry chain, particularly in areas such as liquid cooling, CPO, and AI chips, leading to record-high stock prices for several leading companies [2][3]. Group 1: AI Chips - The global AI chip market is projected to reach $53.6 billion in 2023 and is expected to surge to $71 billion in 2024, with a growth rate exceeding 30% [3]. - Domestic AI chip manufacturers are rapidly closing the performance gap with global leaders like NVIDIA, with local brands accounting for approximately 20% of the market in the first half of 2024 [3]. - Companies such as Cambrian and others are achieving significant stock price increases, with some seeing over 100% growth year-to-date [4]. Group 2: Optical Modules - The optical module market is forecasted to grow at a compound annual growth rate of 22% from 2024 to 2029, potentially exceeding $37 billion by 2029 [5]. - Seven Chinese companies are among the top ten global optical module manufacturers, indicating strong domestic capabilities [5]. - Leading companies in this sector have reported earnings that exceed market expectations, with stock prices reaching historical highs [6]. Group 3: PCB (Printed Circuit Boards) - The PCB industry is experiencing a boom, with eight leading companies achieving record-high stock prices, driven by the demand from AI hardware and electric vehicles [7][8]. - The market for AI server and switch PCBs is estimated to reach between $50 billion to $60 billion by 2026 [7]. - A significant majority of PCB companies listed in A-shares reported revenue growth, with some companies like Shenghong Technology seeing net profit increases of over 300% [8]. Group 4: Liquid Cooling - The liquid cooling technology market is witnessing explosive growth due to increasing demands for efficient heat dissipation in data centers [9][10]. - Major tech companies like NVIDIA and Google are adopting liquid cooling solutions, which are expected to expand into various network devices [10]. - The liquid cooling server concept index has risen over 15% since August, reflecting strong market interest [9]. Group 5: AI Servers - The domestic AI server market has been growing at an annual rate exceeding 20% since 2022, with a market size projected to surpass 69.3 billion yuan by 2024 [15]. - The restrictions on high-end GPU exports have created a favorable market environment for domestic AI server manufacturers [15]. - Companies involved in AI server production are expected to benefit significantly from the growing demand for computing power [15][16].

Core Insights - The report highlights a positive trend in the A-share market, indicating a "systematic slow bull" phase, driven by increased risk appetite and declining risk-free interest rates [7] - It suggests a focus on "big finance + pan-technology" sectors for investment opportunities, emphasizing a diversified approach to enhance success rates [7] - The report identifies specific sectors poised for growth, including the intelligent robotics industry, storage sector, and liquid cooling industry, with notable companies mentioned for potential investment [5][6] Macro News Summary - A joint statement from China and the U.S. has resulted in a 90-day suspension of the implementation of 24% tariffs, retaining 10% tariffs [4] - The Central Clearing Company has simplified the account opening materials for foreign central bank-like institutions [4] - The Ministry of Finance and the State Taxation Administration are seeking public opinions on the draft implementation regulations for the Value-Added Tax Law [4] Industry Dynamics - The intelligent robotics industry in Hangzhou is set to release development regulations, highlighting investment opportunities in the supply chain, with related stocks including Zhejiang Rongtai and Xiangxin Technology [5] - A structural shortage is anticipated in the second half of the year, with the storage sector expected to see continued price increases, involving companies like Dawi Co. and Baiwei Storage [5] - The liquid cooling industry is experiencing explosive growth in market demand, with companies such as Chuanrun Co. and Feilong Co. expected to benefit [5] Company Focus - Juxin Technology is developing a low-power AI computing platform, expanding its applications beyond audio [6] - Chengzhi Co. is advancing its "2.0 version development strategy," with steady revenue growth in the first half of 2025 [6] - Yueda Investment is achieving transformation results, exploring new paths in zero-carbon park construction [6] - Wolong Electric Drive reported a 36.76% year-on-year increase in net profit in the first half of the year, advancing its "going global + technology leadership" strategy [6]

Group 1: Market Trends - The demand for liquid cooling technology is experiencing explosive growth due to increasing heat dissipation issues in data centers and computing equipment [1][2] - The liquid cooling server concept index rose by 13.64% since August, indicating strong market interest [1] - IDC projects that the Chinese liquid cooling server market will reach $2.37 billion in 2024, a 67% increase from 2023, with a compound annual growth rate of 46.8% from 2024 to 2029 [3] Group 2: Company Performance - Feirongda expects a revenue of approximately 2.886 billion yuan for the first half of 2025, with a net profit increase of 103.95% to 123.69% year-on-year, driven by AI server cooling business [4] - Zhongshi Technology anticipates a net profit of 116 million to 129 million yuan for the first half of 2025, reflecting an 85.01% to 105.75% increase year-on-year due to rising demand for cooling materials [4] - Huazheng New Materials forecasts a net profit of 37 million to 47 million yuan for the first half of 2025, representing a year-on-year increase of 271.02% to 371.30% [5] Group 3: Industry Opportunities - The liquid cooling industry is expected to benefit from the increasing adoption of AI chips and the need for efficient cooling solutions, particularly in the AIDC sector [6][8] - Analysts suggest that domestic liquid cooling companies have the opportunity to reshape the global industry landscape, with a clear trend of increasing market share for domestic manufacturers [5][7] - The market for liquid cooling technology is anticipated to expand significantly as the penetration rate of liquid cooling in AI chip solutions increases, particularly in the ASIC market [7][8]

Summary of Conference Call Records Industry Overview - The liquid cooling market is expected to reach a scale of over 100 billion, driven by advancements in chip technology and increasing computing power demands [1][2] - Liquid cooling technology is gradually replacing air cooling, expanding its application from GPUs to switches and large-scale overseas data centers [2] Key Points and Arguments - **Demand and Supply Dynamics**: - Profit expectations have been revised upwards, leading to changes in supply dynamics. Taiwanese manufacturers are seeking outsourcing opportunities in mainland China, reflecting an urgent demand shift [3][4] - The liquid cooling technology is projected to see rapid penetration in data centers due to lower operational costs (OPEX) and strict energy consumption policies [3][8] - **Market Performance**: - The liquid crystal sector has shown strong performance, with leading companies reaching new highs and new entrants emerging [5] - Companies providing complete product solutions, such as Invec and Shengjing Environment, are seen as having greater commercial potential compared to those offering only a full range of products [5] - **Key Players in the Domestic Liquid Crystal Industry**: - The largest and most comprehensive supplier in the domestic liquid crystal industry has clear overseas order expectations, indicating significant performance elasticity [6] - Adaptation Environment, while smaller than Invec, has potential for growth through Southeast Asian orders and gradual entry into the North American market [6] - **Future Prospects of Key Companies**: - Keke New Source is expected to enter the AV product field and has a partnership with Dongguan Zhaoke for thermal materials, with projected performance exceeding 200 million after integration [7] Additional Important Insights - **Liquid Cooling in Data Centers**: - The application of liquid cooling technology in data centers is essential due to the increasing thermal power of AI chips and the need for lower PUE values [8][9] - The global trend towards stricter energy efficiency standards is pushing the adoption of liquid cooling solutions [8] - **NVIDIA's Liquid Cooling Supply Chain**: - NVIDIA's supply chain is structured in a pyramid, with NVIDIA at the top, followed by OEM and ODM manufacturers, and specialized cooling module suppliers at the base [12] - **Market Trends in North America**: - Major North American cloud providers are accelerating the adoption of liquid cooling solutions, with companies like Meta and Google leading the way [16] - **Impact of Domestic Chip Clusters**: - The iteration of domestic chip clusters is opening new liquid cooling solutions, significantly impacting the global market [17] - **Liquid Cooling in Energy Storage**: - Liquid cooling temperature control systems are becoming mainstream in the energy storage sector, with market share expected to reach 53% by 2024 [20] - **Potential for Data Center Liquid Cooling**: - Data center liquid cooling technology is expected to see both volume and price increases, with companies like Invec and Shengjing Kecai recommended for significant growth [21]

Group 1 - The ChiNext index led the market with a closing increase of 1.24%, while the Shanghai Composite Index and Shenzhen Component Index rose by 0.50% and 0.53% respectively [1] - Sectors such as brain-computer interfaces, ports, Xinjiang, and liquid cooling servers showed strong performance, while lithium mining, military industry, rare earth permanent magnets, and photovoltaics faced declines [1] Group 2 - The liquid cooling sector is experiencing strong momentum, driven by the demand from AI data centers and significant orders from overseas companies, leading to expectations of substantial profits and increased valuations for domestic listed companies [3] - The AI and robotics industry chains are highlighted as key sectors in the A-share market, supported by abundant market liquidity and a sustained trend in high-growth and high-heat sectors [3] - The Tianhong CSI Communication Equipment Index Fund closely tracks the performance of 50 listed companies involved in the communication equipment sector, reflecting the overall performance of this thematic investment [3]

Investment Rating - The report maintains a "Positive" investment rating for the electronic industry in China, indicating an expectation of returns exceeding the market benchmark by over 5% [4][12]. Core Insights - The liquid cooling industry is transitioning from an optional solution to a core necessity for AI infrastructure, with market space expected to experience exponential growth. The power consumption of AI clusters has entered the 100kW+ era, necessitating liquid cooling solutions as traditional air cooling systems become inadequate [7]. - The demand for liquid cooling is driven by the rapid growth in AI computing power, with major companies like Meta, Google, and AWS accelerating their deployment of liquid cooling solutions. This trend is expected to extend from servers to network devices [7]. - Domestic manufacturers are poised to capitalize on overseas supply chain opportunities due to their product quality, R&D efficiency, and cost advantages, especially as the industry shifts towards higher power density requirements [7]. Summary by Sections Investment Recommendations and Targets - The report highlights the potential of liquid cooling as a critical component for AI infrastructure, with expectations for sustained order and performance growth. Key companies to watch include Lingyi iTech (002600, Buy), BYD Electronics (00285, Not Rated), Zhongshi Technology (300684, Buy), and Siquan New Materials (301489, Not Rated) [2]. Industry Trends - The liquid cooling sector is transitioning to a demand-driven phase, with significant order growth observed in leading companies. For instance, Vertiv reported a 15% year-over-year increase in orders for Q2 2025, reflecting strong market demand [7]. - The report emphasizes that the liquid cooling market is moving towards a performance-driven stage, with expectations for more companies in the liquid cooling supply chain to see order and performance releases [7].