Summary of Conference Call Notes Industry Overview - The Southeast Asian IDC market is shifting from Singapore to Malaysia and Indonesia due to land resource saturation in Singapore. Chinese manufacturers are gaining a leading share in AI liquid cooling solutions by leveraging close ties with major cloud companies like ByteDance and Alibaba, along with cost advantages [1][2]. Key Points and Arguments - **Partnerships and Projects**: The company has entered NVIDIA's supplier list, with the Blackwell architecture liquid cooling project in joint development, expected to launch in Q3 2026. The company has the technical supply capability for Rubin architecture components [1][4]. - **Customer Prioritization**: The priority for overseas customer orders is Meta > Google > NVIDIA, with Meta's project expected to start in Q3-Q4 2026, initially reaching orders in the tens of millions, potentially growing tenfold as it matures [1][7]. - **Profit Margins**: The profit margin for liquid cooling orders from North American internet companies is expected to be significantly higher than in the domestic market, with conservative estimates of gross margins reaching 60%-70% [1][23]. - **Production Capacity**: The Thai factory is expected to achieve mass production by 2026, covering 15%-30% of order demand initially. The North American factory is currently limited by tariffs and supply chain issues, primarily serving the energy storage business [1][11]. - **Market Competition**: The liquid cooling technology barrier has shifted from design to quality control and stability verification. Local operators in Southeast Asia show brand dependency, making it challenging for Chinese manufacturers to break the monopoly of international giants like Vertiv and Schneider [1][3]. Additional Important Insights - **Local Market Dynamics**: Chinese cloud companies prefer domestic suppliers for AI data center liquid cooling solutions due to established relationships and communication ease. The market is characterized by a tight integration among Chinese manufacturers [2]. - **Challenges in Local Expansion**: Chinese manufacturers face difficulties in acquiring local operators as clients due to brand reliance on established international firms. Trust in Chinese brands is still developing [3]. - **Sales Strategy**: The company has established a subsidiary in Singapore and is hiring local talent to enhance market penetration. The long-term strategy includes building a fully localized team to improve market share and profitability [14][15]. - **Revenue Composition**: Approximately 70% of the company's overseas revenue comes from the U.S. energy storage business, with data center business in Southeast Asia generating stable annual sales of 700-900 million yuan, although categorized as domestic revenue [16]. - **Future Growth**: The company anticipates that future revenue growth will primarily come from overseas markets, as domestic competition remains intense and profit margins are under pressure [18]. Conclusion The company is strategically positioned to capitalize on the growing demand for liquid cooling solutions in Southeast Asia, leveraging partnerships with major tech firms and focusing on local production capabilities. However, challenges related to brand trust and market entry remain significant hurdles to overcome in the competitive landscape.

Summary of AIDC Liquid Cooling Update - GTC Conference 2026 Industry Overview - The report focuses on the liquid cooling industry, particularly advancements in cooling technologies and supply chain dynamics related to data center equipment, specifically the new Rubin series and its components [1][2]. Key Points and Arguments Product Advancements - The Rubin series has increased power consumption to 200-220 kW and comes standard with full liquid cooling, raising the value of a single cabinet cold plate from $25,000 (GB300) to $52,000 [1]. - The design shift from small to large cold plates, incorporating 150-micron microchannel technology, has increased the value of a single cold plate from $200 to $800 [1]. - The price of Quick Disconnect (QD) connectors has risen to $80-90 due to increased flow requirements, with total cabinet value for QD connectors estimated at $11,000 to $12,000 [1][4]. - The CDU (Cooling Distribution Unit) specifications have increased from 1.3 MW to 2.3 MW, with prices rising to $450,000, leading to a 50% increase in per-cabinet value [1]. Supply Chain Dynamics - NVIDIA may tighten AVL (Approved Vendor List) certifications and standardize liquid cooling architectures, solidifying the positions of Taiwanese and European suppliers while creating opportunities for mainland Chinese companies to shift towards OEM production [1][3]. - Current suppliers' positions are stable, with no significant changes in the supplier landscape despite attempts by new entrants to join NVIDIA's supply chain [2][3]. Component Value Changes - The Rubin series has significantly improved power consumption and liquid cooling solutions compared to the GB300 series, with specific value changes: - Cold plates: Total value per cabinet increased to approximately $52,000 due to the new design and additional components [3]. - QD connectors: The number required per cabinet decreased from 270 to 140, but the price per pair increased, leading to a total value of $11,000 to $12,000 per cabinet [4]. - Manifold value remains stable at around $20,000 per cabinet [4]. Cooling Technology Trends - The 45-degree warm water technology will not completely replace chillers, as data centers still require backup chillers for extreme weather conditions [5]. - The trend towards magnetic levitation compressors is clear, as they significantly reduce PUE (Power Usage Effectiveness) and have minimal mechanical wear, making them suitable for modern data center operations [5]. Investment Opportunities Recommended Companies 1. **Cabinet External (Primary Side)**: - Focus on companies like Shenli Environment for chiller production, Lianchuang Co. for compressor parts, and Xue Ren Co. for magnetic levitation compressors [6]. 2. **CDU**: - Recommended companies include Shenli Environment and Invec, which have strong capabilities in data center design and delivery, appealing to non-NVIDIA CSP clients [6]. 3. **Cabinet Internal (Secondary Side)**: - Starry Technology is highlighted as a leading OEM for QD connectors, benefiting from expected order doubling from Danfoss in 2026, with potential expansion into other core products [6]. Additional Important Insights - The shift in supply chain dynamics and the tightening of NVIDIA's certification process may create significant OEM opportunities for mainland Chinese companies, particularly those with production capabilities [3]. - The overall trend in the liquid cooling industry indicates a move towards higher efficiency and integration of advanced technologies, which could reshape competitive dynamics in the sector [5].

Business Progress - The company announced the acquisition of Danish liquid cooling company Asetek in November 2025, completing the transaction in January 2026, marking its entry into data center liquid cooling and AI server cooling sectors [2] - As of February 2026, the company has secured three liquid cooling orders totaling 180 million yuan, with expectations to receive a 150 million yuan order from Huawei in Q2 2026 and a 170 million yuan order from Alibaba in Q3 2026, targeting an annual revenue of 500 million yuan from liquid cooling business [2] Industry Policy and Environment - The company anticipates a 20%-30% increase in wind power sector order volume in 2026 compared to 2025, with this sector accounting for approximately 35% of its revenue [3] - The national policy reform on renewable energy grid pricing, such as the "Document No. 136," is expected to boost wind power installation demand, while the replacement cycle of older models presents additional growth opportunities [3] Performance and Operations - The company's semi-annual report for 2025 indicates a revenue increase of 15.41% year-on-year to 180 million yuan, but a decline in net profit attributable to shareholders by 27.47% to 14.4787 million yuan, primarily due to a rise in domestic sales proportion leading to a decrease in gross margin [4] - The company is actively expanding into new areas such as energy storage, hydrogen energy, and data center liquid cooling to mitigate pressures from traditional business segments [4] Stock Performance - On February 12, 2026, the company's stock reached the leaderboard due to a turnover rate of 30.6%, with institutional investors net selling 2.7262 million yuan on that day [5] - The stock price experienced significant volatility, closing at 32.98 yuan on February 13, 2026, with a single-day increase of 5.03%, but showing large fluctuations over the past week [5]

Core Viewpoint - Huashu Technology (301157) is accelerating its layout in the liquid cooling business, becoming a core focus in the market [1] Group 1: Company Developments - On February 6, 2026, the company announced plans to acquire liquid cooling-related operating assets from Hangzhou Jinke Intelligent Technology Co., Ltd. for 8.71 million yuan to deepen its infrastructure industry chain [1] - On February 11, 2026, the company established a wholly-owned subsidiary, Hangzhou Huayu Thermal Control Technology Co., Ltd., with a registered capital of 10 million yuan, focusing on the research, production, and sales of liquid cooling products [1] - These initiatives are expected to transform Huashu Technology from a product supplier to a digital infrastructure system integrator, potentially opening a second growth curve [1] Group 2: Stock Performance - Following the liquid cooling business layout, Huashu Technology's stock price has shown strong performance, closing at 59.52 yuan on February 12, 2026, with a single-day increase of 4.64% and a turnover rate of 24.49% [2] - As of February 13, 2026, the stock price was reported at 58.97 yuan, with a cumulative increase of 11.10% over the past five days and a trading volume of 1.63 billion yuan [2] - The number of shareholders increased to 7,748 as of February 10, 2026, reflecting a 3.2% rise in interest [2] Group 3: Institutional Perspectives - Institutions are optimistic about the prospects of liquid cooling technology, with Guotai Junan Securities reporting that 2025 will be a pivotal year for the technology's implementation in data centers [3] - TrendForce predicts that the penetration rate of liquid cooling in AI data centers will rise significantly from 14% in 2024 to 33% in 2025, indicating ongoing growth and opportunities for related companies [3]

Company and Industry Summary Company: Weidi (维缔) Key Points 1. **Fundamental Reversal**: The company is at a critical point of fundamental reversal, with significant performance exceeding expectations. The data center liquid cooling business is positioned at the core of the supply chain, and the expected injection of thermal materials assets is anticipated to create a synergistic effect between "boards and materials" [1][2] 2. **Data Center Liquid Cooling**: - **Business Model**: The company employs a dual-driven model of "OEM + direct supply". It currently provides key processes (welding, testing) for Taiwanese cooling leaders (Cooler Master, Delta), indirectly entering the NV and ASIC supply chains. The company is also actively engaging with domestic server and internet giants for direct supply certification [1] - **Capacity Progress**: The liquid cooling board production line has entered a ramp-up phase, with steadily improving yield rates. Existing production lines are operational, and new lines are planned to meet the expected industry demand explosion in 2026, with single-line output expected to reach hundreds of millions [2] 3. **Performance Outlook**: With the delivery of high-performance chips like GB300, this segment is expected to see significant growth from the second half of 2025 to 2026 [2] 4. **New Energy Fundamentals**: - **Customer Barriers**: As a strategic supplier to leading battery manufacturers, the company holds a core share in the liquid cooling board market for Kirin and Shenxing batteries. It benefits from high sales growth in downstream models from Xiaomi, Li Auto, and Huawei, with high order visibility and significant revenue growth expected in 2026 [2] - **Technical Upgrades**: The company is transitioning from traditional brazing to a higher-margin, barrier-enhanced high-frequency welding process, which is expected to significantly improve profitability [3] 5. **M&A Synergy**: The acquisition of TIM materials will complete the thermal management product portfolio. Zhaoke has advantages in the server TIM materials sector and has developed cutting-edge thermal materials technology, which aligns with Rubin's cooling needs. The acquisition is expected to create a comprehensive solution of "cooling boards + thermal materials," significantly enhancing company profits and customer stickiness [3]

Core Insights - The demand for AI computing power is driving rapid growth in the liquid cooling sector, with companies actively pursuing mergers and acquisitions to capture market opportunities [1][2] - Traditional air cooling solutions are becoming inadequate for high-density computing environments, leading to a shift towards liquid cooling technologies due to their energy efficiency and superior heat dissipation capabilities [1] Group 1: Mergers and Acquisitions - Jinfu Technology announced plans to acquire 51% stakes in two companies specializing in liquid cooling components for a total consideration of up to 714 million yuan, aiming to enter the high-growth liquid cooling market [1] - Lingyi Technology completed the acquisition of Dongguan Liminda Electronics, enhancing its capabilities in AI server liquid cooling and establishing a foundation for international market expansion [2] - Cheng Tian Wei Ye plans to raise up to 800 million yuan for projects related to liquid cooling system industrialization and R&D, with significant investments allocated for advanced production equipment [2][3] Group 2: Commercialization and Technological Advancements - UCloud has launched an immersion liquid cooling cabinet at the Ulanqab Intelligent Computing Center, achieving a 15°C reduction in GPU temperature, thus ensuring stable hardware operation [2] - Xin'an Co. has commercialized its immersion liquid cooling project using self-developed silicon-based cooling liquid, achieving an energy usage efficiency (PUE) of below 1.1, which is over 35% more energy-efficient than traditional air cooling [3] - Kangsheng Co. is set to complete its intelligent computing center by September 2025, marking the large-scale commercial application of its immersion liquid cooling technology [3] Group 3: Industry Trends and Strategic Focus - The immersion liquid cooling solution is seen as a breakthrough for high-density computing clusters, offering reduced maintenance costs and improved equipment longevity [4] - Companies are increasingly positioning liquid cooling as a strategic growth area, with significant investments in R&D and market development [4][5] - Ningbo Jingda is focusing on liquid cooling as a new growth engine, with plans to enhance R&D efforts and collaborate with clients on technological challenges [5]

Core Viewpoint - The company is leading in the liquid cooling segment for data centers in China, with significant growth expected in net profit by over 70% by 2025, driven by orders from major clients and expansion into international markets [1] Group 1: Company Performance - The company ranks first in the domestic market for liquid cooling solutions, serving clients such as ByteDance, BAT (Baidu, Alibaba, Tencent), and Huawei [1] - The company has received over 100 million yuan in orders from the United States and has successfully delivered liquid cooling products in Singapore and Malaysia [1] Group 2: Market Growth - There is notable growth in the fields of energy storage, lithium batteries, and ultra-high voltage, contributing to the company's overall performance [1]

Core Insights - 2025 is projected to be the "year of implementation" for liquid cooling in data centers, driven by the intersection of physical limits on computing density and stringent energy efficiency requirements [1][2] - The competition and complementarity between cold plate and immersion cooling technologies are shaping the direction of the liquid cooling industry, with cold plate currently holding an 80% market share [1][2] - The evolution of cooling technologies is leading to a shift from water-based to higher value-added cooling liquids, such as fluorinated liquids, particularly in high-power applications [2][3] Industry Overview - The choice of cooling liquid significantly impacts the safety, lifespan, and operational costs of liquid cooling systems, making it one of the highest value density segments in the liquid cooling supply chain [3] - Different types of liquid cooling systems have distinct structural designs and operational principles, leading to varied requirements for the physical and chemical properties of cooling liquids [3] - The market for water-based cooling liquids is highly open with many participants, while oil-based cooling liquids are characterized by high technical barriers and foreign brand dominance [3] Market Dynamics - The fluorinated liquid sector is undergoing a transformation, with traditional international giants like 3M strategically exiting due to environmental concerns, allowing Chinese companies with technological and supply chain advantages to rise [3] - The development of data center cooling liquids is evolving along four dimensions: higher efficiency, lower energy consumption, better environmental protection, and smarter systems [4] - Future cooling solutions will integrate materials science, thermodynamics, and intelligent control technologies, moving beyond being mere functional mediums [4]

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The year 2025 is projected to be the "landing year" for liquid cooling in data centers, driven by the intersection of increased computing power density and stringent energy efficiency requirements [2][4] - Liquid cooling technology is evolving rapidly, with cold plate systems currently holding an 80% market share, while immersion cooling is recognized as the future core direction for high-density computing scenarios [2][21] - The choice of cooling liquid significantly impacts the safety, lifespan, and operational costs of liquid cooling systems, making it a high-value segment within the liquid cooling industry [2][3] Summary by Sections 1. Background of Liquid Cooling Technology - The explosive growth in computing power demand and continuous increase in chip power consumption necessitate advanced cooling solutions [6][11] - Energy efficiency has become a rigid requirement, with global data center electricity consumption projected to double by 2030 [15][16] - The rise of edge computing is creating new demands for efficient space utilization in data centers [19] 2. Classification and Technical Characteristics of Liquid Cooling Systems - Liquid cooling systems are categorized into cold plate, immersion, and spray cooling types, with cold plate and immersion systems leading the market [20][21] - Cold plate systems are widely used due to their reliability and moderate deployment costs, while immersion cooling is recognized for its superior heat dissipation capabilities [22][38] 3. Performance Requirements of Cooling Liquids - Water-based cooling liquids dominate cold plate systems, while oil-based liquids are used in single-phase immersion systems [3][4] - Fluorinated liquids are considered the ideal cooling medium for data centers, although their high cost limits their application to high-power scenarios [3][4] 4. Future Trends in Cooling Liquids - The development of cooling liquids is evolving towards higher efficiency, lower energy consumption, better environmental performance, and smarter systems [2][4] - The industry is moving towards a comprehensive thermal management solution that integrates material science, thermodynamics, and intelligent control technologies [2][4] 5. Competitive Landscape - The water-based cooling liquid market is highly open with many participants, while the oil-based cooling liquid market is specialized and dominated by foreign brands [2][3] - The fluorinated liquid industry is undergoing significant changes, with traditional giants exiting the market and domestic companies seizing the opportunity for "domestic substitution" [2][3]

Summary of AIDC Liquid Cooling Market Conference Call Industry Overview - The liquid cooling market is expected to benefit from new products from NVIDIA (such as B200, B300, NVR 144) and the demand for ASICs from the four major CSPs in North America, with market sizes projected to reach $7.9 billion in 2025 and $17.6 billion in 2026 [1][3] - North America is the primary driver of the global liquid cooling market, expected to account for approximately 47% of the market share in 2025, translating to $3.6-$3.8 billion out of $7.9 billion [1][4] Key Insights and Arguments - NVIDIA's NVR 144 utilizes a new microchannel cold plate (MCCP) that offers higher heat exchange efficiency but comes at a 20% higher cost compared to traditional models, pushing liquid cooling technology towards higher efficiency [1][5] - Domestic manufacturers like Invec and Siquan are actively participating in NVIDIA's liquid cooling supply chain but have not yet fully entered mass production, remaining in the product iteration phase [1][6] - The value of secondary components in liquid cooling systems (CDU, piping, manifold, etc.) is expected to increase by approximately 10% due to higher heat exchange demands [1][7] - NVIDIA's Ruby product features a high-temperature water circulation system that increases CDU power to 220-230 kW per cabinet, raising the liquid cooling value to $150,000-$180,000 per cabinet, showcasing a new direction for energy-saving in data centers [1][8] Future Developments - Meta and Google plan to scale liquid cooling solutions by 2026, with Meta's Minerva solution requiring 25,000 liquid cooling cabinets and Google's TPU V7 needing 35,000 cabinets, significantly contributing to market growth [2][9] - The global liquid cooling market is projected to grow from $3.5 billion in 2024 to $7.9 billion in 2025 and $14 billion in 2026, indicating nearly a doubling in growth due to NVIDIA's adoption of liquid cooling products and the influence of major CSPs [3] Supply Chain Dynamics - Major suppliers in the liquid cooling technology supply chain include AVC and CoolIT for NVIDIA, while domestic players like Invec and Siquan are involved in early sample submissions but are not yet in mass production [6][10] - In the Meta project, Cooler Master and Invec are key suppliers, while in Google's project, AVC, Siquan, and Feirongda are involved, with Feirongda still in the sample submission phase [10] Technical Innovations - The Ruby full liquid cooling solution achieves 100% liquid cooling for all heat-generating components, eliminating the need for additional cooling sources in most climates, with water inlet temperatures raised from 35°C to 40°C [13] - In colder climates, liquid cooling systems can operate without traditional cooling machines, relying instead on dry coolers or cooling towers [11][12] Investment Insights - For a 1 GW data center, the investment in primary and secondary liquid cooling systems is approximately 25% for primary systems and 20% for CPUs, with liquid cooling plates accounting for about 25% of the investment [15] - The overall investment in liquid cooling systems for AI data centers is estimated to be around 3%-5% of total investment, with complete liquid cooling systems costing about 1.4% of the total [16]