Core Viewpoint - CITIC Construction Investment has initiated coverage on Jiali International, giving it a "Buy" rating, with projected revenues and profits for the years 2025/26, 2026/27, and 2027/28 showing significant growth due to the rising demand in the AI server chassis market [1][2] Group 1: Financial Projections - Expected revenues for Jiali International are projected to be HKD 34.5 billion, HKD 45.0 billion, and HKD 54.0 billion for the years 2025/26, 2026/27, and 2027/28 respectively [1] - The company's attributable profit for the same years is expected to be HKD 2.5 billion, HKD 4.7 billion, and HKD 6.6 billion respectively [1] - For the fiscal year 2024/25, the company is expected to achieve revenue of HKD 32.3 billion, representing a year-on-year growth of 10.8%, and a profit of HKD 2.04 billion, reflecting a year-on-year increase of 20.5% [2] Group 2: Market Dynamics - The AI sector is driving an increase in both volume and price in the server chassis market, with demand for GPU and ASIC servers rising [1] - The average price of chassis products is expected to increase due to higher reliability and cooling requirements for AI servers [1] - The global market for standard server chassis is estimated to be between USD 13.7 billion and USD 20.5 billion, with the potential new AI server chassis market estimated at USD 7.5 billion to USD 10 billion based on assumptions of 5 million units each for GPU and ASIC [1] Group 3: Company Positioning and Strategy - Jiali International is one of the earliest entrants in the server chassis market and holds a leading position globally, with clients including HP, Lenovo, IBM, DELL, and ZTE [2] - The company is actively expanding its AI server product portfolio and has made significant progress with traditional OEMs, NVIDIA, and CSP clients [2] - Jiali International has been included in NVIDIA's list of qualified suppliers and is working on delivering more prototype products in the coming months [2]

Group 1 - The demand for AI servers is surging, leading to increased attention on the casing sector due to customization requirements from AI server clients [1][2] - Sheng Ming Electric (晟铭电) is a supplier of water-cooled cabinets for Meta's NVIDIA GB200 and ASIC AI server project Sidecar, with production capacity expected to reach 3,800 units this year and double to 7,000 units next year [1] - The company anticipates a strong second quarter performance, with revenue expected to grow by double digits year-on-year [1] Group 2 - Qincheng (勤诚) is expanding its product offerings to include both ASIC and general server casings, with a focus on high-end models and custom noise-reduction cabinets [1][2] - The company is actively pursuing global expansion, with a new factory in Malaysia set to begin production in the first half of next year and plans for new facilities in the United States [2] - Ying Guang (迎广) is celebrating its 40th anniversary and has begun mass production of the GB200, with ongoing assembly operations [2]