Summary of Kehua Data Conference Call Company Overview - Kehua Data is the second-largest uninterruptible power supply (UPS) manufacturer in China, with a market share of 13%, following Huawei's 18% [doc id='12'] - The company was founded in 1988 in Fujian Province and went public in 2010 on the Shenzhen Stock Exchange [doc id='62'] - Kehua has expanded its sales network to over 30 countries and established long-term partnerships with major clients, including leading hyperscale cloud providers [doc id='62'] Industry Insights - The global AIDC (AI Data Center) capital expenditure is expected to accelerate, benefiting UPS and energy storage sectors [doc id='9'] - The global UPS and HVDC (High Voltage Direct Current) market is projected to reach $8.4 billion by 2028 [doc id='9'] - The global energy storage demand is forecasted to grow at a CAGR of 22% from 2025 to 2027, reaching 338 GWh by 2027 [doc id='3'] Key Financial Projections - Kehua's earnings per share (EPS) is expected to grow at a CAGR of 37% from 2025 to 2027, driven by increased AIDC capital expenditures and new product launches [doc id='12'] - Revenue from data center products is projected to grow at a CAGR of 37% during the same period [doc id='2'] - The company's renewable energy business, which includes energy storage and photovoltaic inverters, is expected to achieve a CAGR of 19% from 2025 to 2027 [doc id='3'] Product and Market Strategy - Kehua is focusing on expanding its overseas market presence, particularly in the energy storage sector, to capture strong demand [doc id='3'] - The company has established a strong relationship with major hyperscale cloud providers, with 50% of its UPS sales coming from these clients [doc id='13'] - Kehua's new HVDC products are expected to penetrate overseas markets, enhancing its competitive position [doc id='21'] Valuation and Investment Rating - Kehua is rated as a "Buy" with a target price of RMB 78.5, implying a 40x PE ratio for 2026E, which is considered reasonable compared to industry peers [doc id='4'] - The current stock price is RMB 57.05, reflecting a PE ratio of 29x for 2026E, which is below the average of 40x for similar companies in the A-share market [doc id='46'] Risks and Catalysts - Potential risks include market fluctuations and the impact of policy changes on domestic demand for energy storage [doc id='36'] - Positive catalysts for stock price appreciation include increased orders from hyperscale cloud providers and successful commercialization of new products [doc id='48'] Conclusion - Kehua Data is well-positioned to benefit from the growing demand for UPS and energy storage solutions driven by the AIDC investment boom and its strong relationships with major clients [doc id='12']

Summary of UPS and HVDC Industry Conference Call Industry Overview - The North American UPS market is expected to grow at around 20%, significantly higher than the domestic growth rate of 8%-9% due to rapid AIDC construction [1][6] - The global UPS market size is approximately $7 billion, with North America accounting for about 52%, or $3.5 billion [2] Key Players and Market Dynamics - Major UPS manufacturers in North America include Vertiv, Schneider, and Eaton, which collectively hold 65%-70% of the market share [2] - Vertiv, Schneider, and Eaton primarily produce their products locally, with less than 5% sourced from other regions [5] - The average price per watt for UPS in North America is about $0.8, compared to approximately ¥0.45 in the domestic market [10][11] Demand and Supply Insights - Despite the potential for HVDC to replace UPS in the future, the demand for UPS remains strong in the short term [1][6] - Leading companies are not expanding production capacity significantly but are optimizing existing lines to meet demand, reflecting a cautious approach towards future HVDC adoption [7] Emerging Trends and Technologies - Nvidia's future distribution architecture will adopt a unipolar 0 and 800-volt scheme, which is expected to rapidly increase HVDC penetration from 0% to 60%-70% [24] - The third-generation 800-volt HVDC is currently in the pilot stage, with high costs primarily due to expensive components [4][28] Competitive Landscape - New giants like ByteDance prioritize performance metrics and rigorous testing over price when selecting UPS suppliers, with Eaton and Vertiv offering competitive pricing due to scale advantages [14][15] - Domestic companies are currently limited in their ability to directly access overseas end customers, primarily exporting through state-owned enterprises [12] Future Outlook - The North American UPS market is projected to maintain a growth rate of around 20% over the next few years, with no significant capacity shortages anticipated [22] - Domestic UPS industry growth is expected to remain at 8%-9%, driven by operators and cloud providers [13] Pricing and Cost Structure - The pricing for the third-generation HVDC is expected to decrease as production scales up, currently priced at around $4 per watt [38] - Solid-state transformers (SST) are priced at approximately $800-$900 per kilowatt due to their custom nature and advanced materials [31] Strategic Considerations - Companies like Sungrow are well-positioned to enter the HVDC market due to their existing technology in rectifiers and inverters, with a strong sales network in North America [42] - The U.S. market has a risk assessment for Chinese companies, but firms like Sungrow can mitigate concerns by being transparent about their technology [43] Conclusion - The UPS and HVDC markets are experiencing significant changes driven by technological advancements and shifting demand patterns. Companies must navigate these dynamics carefully to capitalize on growth opportunities while managing risks associated with market entry and competition.

Group 1 - The 2025 Shante T1 Summit was successfully held in Shanghai, focusing on optimizing organizational structure, product and technology innovation, and flexible sales policy management to support channel development and regional cooperation in a rapidly changing market [2] - Eaton's General Manager for Power Quality Channels in the Asia-Pacific region shared insights on industry dynamics, business conditions of leading companies like Eaton and Shante, and the current opportunities and challenges in the UPS market [3][4] Group 2 - Shante's brand business leader discussed the company's channel construction and business layout, emphasizing a flatter channel structure to quickly respond to market demands and support partners in project operations, particularly in key industries like finance and healthcare [5] - The marketing director of Shante detailed the 2025 channel policies and digital operation models, aiming to establish clear channel rules and incentive systems to create a healthy ecosystem and enhance sales motivation through online and offline promotional activities [6] Group 3 - Shante showcased three major product strategies to enhance competitiveness in the market driven by smart technology and green energy, including upgrading core products and expanding service scenarios [7][8] - The product line director for the Asia-Pacific region introduced Shante and Orland's product matrix, highlighting new solutions for various industries, including renewable energy applications and data center solutions [8] Group 4 - Shante aims to collaborate with channel partners to embrace change and focus on high-quality development, building a strategic blueprint for innovative growth [9] - Shante has over 40 years of experience in China, recognized for its strong R&D capabilities, reliable product quality, and efficient after-sales service across various industries [10]