Group 1 - The company held an online investor meeting on September 12, 2025, to discuss its semi-annual report and performance, with active participation from investors [1] - Key personnel present included Chairman Wen Qichao, Secretary Zhou Xianhua, and CFO Luo Ying, indicating a high level of engagement from the company's leadership [1] - The meeting was conducted on the "Investor Relations Interactive Platform" and focused on the company's performance and future strategies [1] Group 2 - During the meeting, the company addressed inquiries regarding its collaboration with clients, specifically mentioning that its pipeline products have entered the CoolerMaster supplier system and are undergoing product development [2] - The company is actively promoting its advantageous products to potential clients, although it refrained from disclosing information about other suppliers for CoolerMaster and AVC due to confidentiality [2] - The company is optimizing personnel configuration in response to the growing market demand for its pipeline products, indicating a strategic approach to production based on customer orders [2] Group 3 - The company has over 30 years of experience in rubber pipeline material formulation and manufacturing, achieving V0 level standards and UL certification for its liquid cooling server pipeline products [3] - The company is focusing on promoting and developing liquid cooling products in key areas such as data server cooling, energy storage cooling, and automotive fluid pipelines [3] - Safety measures are being implemented across departments to enhance production safety, including education, preventive checks, and cross-checking [3]

Core Viewpoint - The article focuses on the delivery and value breakdown of liquid cooling systems in NVIDIA's GB200 and GB300 server racks, highlighting the differences in design and component value between the two models [2]. Liquid Cooling Server Rack Components - The liquid cooling server rack includes several key components such as manifolds, cooling distribution units (CDUs), pumps, water tanks, plate heat exchangers, and cooling towers [5][6][8][9]. Value Breakdown of Liquid Cooling - The article emphasizes the importance of understanding the architecture of GB200 to facilitate the value breakdown analysis [21]. - For GB200, the demand for large cold plates is 45 units, while GB300 requires 117 units of small cold plates [22]. - The value of a large cold plate in GB200 is $650, whereas a small cold plate in GB300 is valued at $240 [23]. Supplier Dynamics - The supplier landscape for cold plates has shifted significantly from GB200 to GB300, with Cooler Master becoming the primary supplier for GB300, capturing over 55% of the market share [24][25]. - The production process for GB300's liquid cooling plates involves more integration steps compared to GB200, indicating a more complex supply chain [25]. Component Pricing - The price of hoses for GB200 is $1,200 per cabinet, while for GB300, it has increased to between $1,800 and $2,000 per cabinet [26]. - The price of quick disconnects (QDs) has also increased from $45 per pair in GB200 to $55 per pair in GB300 [28]. Technological Upgrades - The quick disconnect technology has evolved from UQD in GB200 to NVUQD in GB300, with a significant change in the supplier base, reducing the share of European and American companies [29]. - The CDU supplier model has transitioned from a single authorized supplier for GB200 to a more diversified supplier base for GB300, enhancing market responsiveness [30]. Profit Margins - The gross margin for CDUs is approximately over 50%, while for cold plates, manifolds, and quick disconnects, it is around 30% [30].

Summary of Liquid Cooling Industry Report Industry Overview - The liquid cooling industry is experiencing significant growth, driven by the increasing demand for data centers and the limitations of traditional air cooling systems. The global liquid cooling market is expected to exceed 150 billion RMB in 2026, representing a tenfold increase from 2025's 15 billion RMB [1][4]. Key Points Market Growth and Projections - The liquid cooling market is projected to reach over 150 billion RMB by 2026, with a domestic market penetration rate expected to reach 30%-40% between 2027 and 2029 [1][4]. - The industry is currently in an explosive growth phase, with the application of liquid cooling technology in data centers anticipated to accelerate significantly by 2025 [2][4]. Technology and Types - Liquid cooling technology is categorized into three main types: spray cooling, cold plate cooling, and immersion cooling, with cold plate cooling currently being the dominant method [1][5]. - The NVIDIA MBR72 cabinet serves as a benchmark, with a total cabinet value of approximately 800,000 RMB, including components such as the cold plate (250,000 RMB) and CDU (300,000 RMB) [1][5]. Competitive Landscape - In the CDU (Coolant Distribution Unit) sector, domestic companies like NVIDIA, China Sunway, and Silver Wheel dominate, while international competitors include Vertiv, Gucci, and Schneider [1][6]. - Domestic brands are expected to enter overseas markets quickly due to the high barriers in business relationships and consistency control required for components like cold plates and quick connectors [6]. Key Components and Suppliers - Cold plates are critical components in liquid cooling systems, directly attached to the back of chips, with leakage being a key concern for manufacturers and end-users [1][8]. - Major suppliers for quick connectors include both international (CBC, Pico) and domestic companies (Invec, Chuanhuan, Suliang) [3][9]. - The manifold component is simpler and has a higher presence of domestic companies, including Zhongguangdian, Shenling, Invec, and Silver Wheel [10]. Development Trends - The liquid cooling technology has gained attention since 2023, with companies like Feilong Co. having a first-mover advantage in the automotive thermal management sector, supplying Huawei and covering the NVIDIA supply chain [1][11]. - Companies like Silver Wheel and Topu are noted for their integrated capabilities across multiple liquid cooling components and their entry into the NVIDIA supply chain through Taiwanese manufacturers [11]. Additional Insights - The increasing power consumption of chips and the need for effective temperature control are driving the adoption of liquid cooling solutions, as chip lifespan can decrease by 50% with every 10-degree increase in operating temperature [2]. - The precision requirements for quick connectors in servers are stringent, with leakage limits set at no more than 0.25 drops over five consecutive insertions [3][9].

Core Viewpoint - The article discusses the rapid advancements in liquid cooling technology within the semiconductor industry, highlighting the significant power consumption increases of GPUs from Nvidia and AMD, and the evolving design and cost dynamics of liquid cooling systems. Group 1: Liquid Cooling Technology Overview - Nvidia and AMD are leading the application of liquid cooling technology, with Nvidia's B200 chip consuming 1200 watts and the latest B300 chip reaching 1400 watts, while future chips like Rubin are expected to consume up to 3600 watts [2][3] - AMD's GPU power consumption has also surged, with the MI300 series at 700-750 watts, MI325 at 1000 watts, and MI355 at 1400 watts, with the MI375 series projected to reach 1600 watts [2][3] Group 2: Core Component Upgrades - The core components of liquid cooling systems, such as cold plates, quick connectors, and piping, are evolving. The GB200 platform features 45 cold plates at a cost of $600-700 each, while the GB300 has 117 cold plates with a reduced cost of $200-300 each, leading to an overall value increase from $780,000 to $900,000 [4] - The quick connector used in GB200 is the OCP standard UQD04, while GB300 has upgraded to Nvidia's NVQD03, nearly doubling the quantity and increasing the total value to about twice that of GB200 [4] Group 3: Cooling Distribution Units (CDUs) - CDUs are moving towards standardization, with types including embedded, cabinet, and distribution types. The domestic market favors high-power CDUs (1500-2000 watts), while North America and Europe prefer distribution types with capacities of 70 kW and 150 kW, priced around $30,000 to $40,000 [5] - The unique "density stacking" strategy in the domestic GPU market has led to increased demand for liquid cooling solutions, as seen with Huawei's CloudMatrix384 cabinet having a power consumption four times that of Nvidia's NVL72 cabinet [5] Group 4: Market Dynamics and Competition - Domestic data centers are expected to adopt domestic GPU cards extensively, making liquid cooling systems a standard feature. Customization of cold plates and quick connectors is particularly pronounced in the domestic market [7] - Taiwanese manufacturers hold a leading position in the liquid cooling market due to their first-mover advantage, while domestic manufacturers like Invec offer competitive pricing and customization capabilities, with costs for CDU and internal components being 20-30% lower than their Taiwanese counterparts [8] Group 5: Challenges and Future Directions - Current challenges in liquid cooling include issues with dual-sided cold plates, such as increased pressure and deformation, as well as the high cost and environmental concerns associated with immersion cooling fluids [9] - The market is shifting focus towards new mineral oils to optimize flow rates and heat dissipation capabilities, aiming to balance cost and performance [9]

Investment Rating - The report maintains an "Accumulate" rating for the company [1] Core Views - The company is expected to benefit from dual growth in the semiconductor and liquid cooling sectors [1] - The company's revenue for H1 2025 was 1.409 billion, a slight year-on-year decrease of 0.6%, with the food business showing a 5.4% increase [7] - The company has made significant progress in domestic substitution and is optimizing its customer structure in the semiconductor field [7] - The report has adjusted the net profit forecast for 2025-2027 to 255 million, 314 million, and 415 million respectively, reflecting a dynamic PE of 62, 50, and 38 times [1][7] Financial Performance Summary - Total revenue for 2023 is projected at 2.711 billion, with a year-on-year growth of 3.49% [1] - The net profit attributable to the parent company for 2023 is estimated at 235.9 million, down 31.58% year-on-year [1] - The company's gross margin for H1 2025 was 24.5%, a decrease of 1.1 percentage points year-on-year [7] - The operating cash flow for H1 2025 improved significantly, reaching 130 million, a year-on-year increase of 41.8% [7] Market Data - The closing price of the stock is 38.73 yuan, with a market capitalization of 15.794 billion [5] - The price-to-earnings ratio (P/E) is currently at 66.95 [5] - The company has a total asset-liability ratio of 60.01% [6]

Investment Rating - The report maintains a rating of "Accumulate" for the company [1] Core Views - The company is expected to benefit from dual growth in the semiconductor and liquid cooling sectors, with a projected revenue increase from 2,711 million RMB in 2023 to 3,989 million RMB by 2027, reflecting a compound annual growth rate (CAGR) of 16.57% [1] - The net profit attributable to the parent company is forecasted to recover from 226.34 million RMB in 2024 to 414.73 million RMB in 2027, indicating a significant growth trajectory [1] - The company has made strides in optimizing its customer structure and enhancing its product offerings in the semiconductor sector, which is expected to drive future growth [8] Financial Performance Summary - For the first half of 2025, the company reported a revenue of 1.409 billion RMB, a slight decrease of 0.6% year-on-year, with the food business showing a 5.4% increase in revenue [8] - The gross margin for the first half of 2025 was 24.5%, down 1.1 percentage points year-on-year, while the net profit margin was 7.6%, down 2.3 percentage points year-on-year [8] - The company has improved its operating cash flow, achieving a net cash flow from operating activities of 130 million RMB, a year-on-year increase of 41.8% [8] Market Position and Strategy - The company is actively pursuing opportunities in the liquid cooling market, focusing on key components such as CDU and fluid pipelines, which are essential for AI infrastructure [8] - The company has established itself as a primary supplier for major semiconductor equipment manufacturers, enhancing its competitive position in the market [8] - The report highlights the company's commitment to increasing R&D investment to develop high-value products, which is expected to strengthen its market position further [8]

Event Overview - The company reported its 2025 mid-year results, with a total revenue of 1.409 billion yuan, a year-on-year decrease of 0.62%. In Q2, revenue was 737 million yuan, a slight increase of 0.99% year-on-year, which was below market expectations [1] - Semiconductor revenue was 441 million yuan, down 1.31% year-on-year, attributed to a decline in overseas orders due to geopolitical factors, while domestic demand remained strong [1] - Food segment revenue reached 846 million yuan, up 5.41% year-on-year, driven by a mild recovery in the dairy beverage industry and an increase in market share [1] - Pharmaceutical revenue was 122 million yuan, down 27.53% year-on-year, reflecting a continued industry downturn [1] - The company anticipates a robust order intake for H2 2025, suggesting potential revenue acceleration [1] Profitability Analysis - The company achieved a net profit attributable to shareholders of 108 million yuan, with a net profit margin of 7.67%, down 2.24 percentage points year-on-year [2] - Gross margin for H1 2025 was 24.46%, a decrease of 1.11 percentage points, primarily due to the impact of new factory depreciation in Taiwan and Malaysia [2] - The company’s operating expenses ratio was 15.66%, an increase of 0.93 percentage points year-on-year, with stable expense ratios across various categories [2] - A reduction in government subsidies led to a decrease in non-operating income by 6.48 million yuan, further impacting profit performance [2] Industry Positioning - The company is a leading domestic supplier of semiconductor gas/liquid systems, supplying major global players and driving domestic substitution [3] - The establishment of a joint venture in 2024 aims to penetrate the liquid cooling market, addressing critical issues such as sealing performance [3] - The liquid cooling segment is expected to experience significant growth due to increasing temperature control demands from high-performance chips, with the company positioned as a comprehensive supplier [3] Investment Outlook - Revenue forecasts for 2025-2027 have been adjusted to 3.049 billion, 3.579 billion, and 4.367 billion yuan, reflecting year-on-year growth rates of 7%, 17%, and 22% respectively [4] - Net profit forecasts for the same period are 252 million, 323 million, and 427 million yuan, with corresponding year-on-year growth rates of 11%, 28%, and 32% [4] - The company’s stock price of 39.73 yuan corresponds to a PE ratio of 64, 50, and 38 for the years 2025, 2026, and 2027, respectively, indicating a positive outlook for future earnings growth [4]

Summary of Conference Call on Liquid Cooling Technology in the Automotive Sector Industry Overview - The liquid cooling technology is benefiting from the development of AI and the push from operators, with a projected market space of approximately 150 billion yuan by 2026, including hundreds of billions for core components such as CDU, cold plates, and manifolds [1][6][13] - The Chinese automotive industry has established a presence in the thermal management of new energy vehicles, which synergizes with server liquid cooling technology, particularly in key components like electronic water pumps, power batteries, and hoses [1][7] Key Points and Arguments - The electronic water pump market is experiencing rapid growth, with the server liquid cooling sector demanding higher standards. The market for electronic water pumps in server liquid cooling is expected to reach 5 billion yuan by 2026, accounting for 50% of the new energy vehicle electronic water pump market [1][8] - Core components of the liquid cooling market are primarily dominated by foreign enterprises, but domestic companies are gradually participating in the supply chain for cold plates, CDU, and quick connectors, indicating potential growth opportunities [1][9] - The liquid cooling technology is gradually replacing air cooling as the mainstream thermal management solution for power batteries, with companies like Yinlun and Xiangyu Technology already beginning to ship liquid cooling products [1][10] Market Trends and Future Outlook - The liquid cooling market is expected to exceed 20 billion yuan by 2025 and approach 100 billion yuan by 2026, with a growth rate steeper than that of optical modules [2][4] - The demand for electronic water pumps, referred to as the "heart" of the liquid cooling sector, is increasing, which will drive growth in power and quantity [5][12] - The liquid cooling market is assessed based on the value of individual cabinets, with the NVIDIA GPU300 NVR72 cabinet valued at approximately 100,000 to 120,000 USD. The core components include cold plates (35%), CDU (40%), manifolds (10%), and quick connectors and hoses (15%) [6] Competitive Landscape - Companies like Feilong and Zhongding have advantages in high-power, long-life, and compact electronic water pumps, while others like Chuanhuan and Suliang have competitive advantages due to their mass production experience [4][11] - The supply situation varies across different categories of automotive components, with foreign companies leading in liquid cooling, while domestic companies are beginning to gain traction [9][12] Investment Opportunities - The liquid cooling technology has gained significant attention since 2023, especially following the AI boom, with major operators planning to achieve a 50% penetration rate in the coming years [13] - 2025 is anticipated to be the year of liquid cooling implementation, presenting important and certain investment opportunities as the industry accelerates [13][15] - Companies like Feilong, Yinlun, and Xiangxing Technology are actively expanding their overseas markets and are expected to benefit from the trends in the liquid cooling industry [14][15]

Summary of Key Points from Conference Call Industry Overview - The conference call discusses the liquid cooling market, particularly in relation to the GPU industry, focusing on advancements in NVIDIA's GPU products and their implications for liquid cooling solutions [1][3][4]. Core Insights and Arguments - **Increased Power Consumption**: NVIDIA's new generation GPUs, such as the Blackwell B200 and Rubin Ultra, show a significant increase in power consumption, from 1,200 watts for B200 to a potential 3,600 watts for Rubin Ultra, necessitating enhanced cooling solutions [1][3]. - **Liquid Cooling Demand Growth**: The demand for liquid cooling systems is expected to rise sharply due to the increased power requirements of GPUs. The total value of the GB300 liquid cooling system is projected to reach $90,000 to $100,000, a 20% increase from the GB200 [1][4]. - **Cost Structure of Liquid Cooling**: The liquid cooling system accounts for 30%-40% of the total cabinet cost, while chips and boards make up 50%-60%. The CDU (Coolant Distribution Unit) is the largest component of the liquid cooling system's value [1][8]. - **Domestic Market Trends**: In the domestic GPU market, there is a notable increase in demand for liquid cooling solutions due to international trade restrictions, leading to a rise in the use of domestic GPUs in data centers [12][13]. - **Competitive Advantages**: Domestic liquid cooling suppliers have advantages in delivery cycles and costs, with shorter delivery times and lower electricity costs compared to international competitors [14]. Additional Important Content - **Technological Developments**: The GB300 liquid cooling solution incorporates advanced technologies such as liquid metal heat absorption and micro-channel copper plates, which enhance cooling efficiency [1][8]. - **Market Share Dynamics**: Taiwanese manufacturers currently dominate the liquid cooling market, but domestic manufacturers are gaining ground due to cost advantages of 20%-30% [2][16]. - **Future Upgrades**: The NVL platform is set for significant upgrades, with NVL144 launching in 2026 and NVL576 in 2027, which will further enhance power density and cooling efficiency [9]. - **Challenges for Manufacturers**: Companies like Cool Master face production capacity challenges despite holding a significant market share in sample phases, prompting expansions in the U.S. and Vietnam [7][20]. - **Supply Chain Considerations**: The choice of CDU and other components is heavily influenced by the specific requirements of cloud service providers, which impacts the integration and performance of liquid cooling systems [18]. This summary encapsulates the critical insights and trends discussed in the conference call, highlighting the evolving landscape of the liquid cooling market in relation to GPU advancements and domestic market dynamics.

Core Viewpoint - The necessity of liquid cooling technology in data centers is driven by increasing chip power consumption and regulatory requirements for energy efficiency, making it essential rather than optional for new large-scale data centers [1][2]. Group 1: Reasons for Adopting Liquid Cooling - Chip power consumption is escalating, with the H100 card consuming 700 W, the B200 card at 1.2 kW, and the B300 card reaching 1.4 kW, necessitating liquid cooling as air cooling becomes inadequate [1]. - Regulatory standards for new data centers mandate a Power Usage Effectiveness (PUE) of ≤ 1.15, which is achievable with liquid cooling (1.05-1.15) but not with air cooling (1.3-1.5) [1]. Group 2: Types of Liquid Cooling Technologies - Cold plate cooling involves copper plates attached to chips with circulating cold water, accounting for 65% of 2024 shipments, favored by cloud and internet giants [1]. - Immersion cooling submerges entire systems in insulating liquids, achieving the highest cooling efficiency, representing 34% of 2024 shipments, primarily for supercomputing and intelligent computing centers [1]. - Spray cooling uses nozzles to directly spray liquid onto components, with a projected penetration rate for 2024 [1]. Group 3: Value of Liquid Cooling Cabinets - The total cost of a system using NVIDIA's GB200 NVL72 is approximately $84,000, with server-side components costing around $36,000 and rack-side components about $48,000 [2]. - The next-generation GB300 will see an increase in cooling plates and connectors, raising the total system price to $100,000, with the cost increase primarily in components [4]. Group 4: Market Size and Growth - The Chinese liquid cooling server market is projected to reach 20 billion yuan in 2024, marking an 84% year-on-year increase, with expectations of 30 billion yuan in 2025, a further 50% growth [4]. - By 2026-2027, the introduction of NVIDIA's Rubin series is expected to raise the liquid cooling penetration rate from 30% to over 70%, with a projected market for components worth 50 billion yuan by 2027 based on 50,000 new cabinets [4]. Group 5: Industry Supply Chain - Suppliers in North America include Yingwei, providing cold plates and connectors, and Shenling Environment, delivering external CDU units, with confirmed orders from major cloud providers [4]. - Numerous manufacturers are in the process of validating their cooling plates and CDU units, with immediate production upon approval expected until 2026 [4]. - Component opportunities include quick connectors priced at $30-50 each, heat exchangers at $500-800 each, and various other components with high volume but lower individual prices [4].