Investment Rating - The report maintains a "Buy" rating for the company, with a target price not specified [7]. Core Insights - The company reported a revenue of 49.621 billion yuan for the first three quarters of 2025, representing a year-on-year growth of 17.03%, and a net profit attributable to shareholders of 2.376 billion yuan, up 2.64% year-on-year [1]. - The gross margin remains under pressure, with a gross margin of 13.35% for the first three quarters, down 1.8 percentage points year-on-year, and a gross margin of 12.92% for Q3, which is relatively stable year-on-year but down 0.64 percentage points quarter-on-quarter [2]. - The company has successfully won several marine project bids, with a total order amount of approximately 20 billion yuan in hand, which is expected to support rapid growth in the future [2]. - A significant breakthrough was achieved with the successful bid for the ±500kV DC submarine cable project, showcasing the company's strong technical capabilities in the marine energy sector [3]. - The company has demonstrated its ability to industrialize various new types of optical fibers, including hollow-core fibers, which have passed quality inspections and achieved advanced performance levels [4]. - The company is actively expanding its production capacity to meet future demand, with a new project aimed at producing special optical fibers set to be completed by February 2026 [5]. - In the AI sector, the company is collaborating with industry partners to develop advanced cooling solutions and a full range of optical module products to support domestic supercomputing center construction [6]. Financial Summary - The company adjusted its net profit forecasts for 2025-2027 to 3 billion, 3.7 billion, and 4.6 billion yuan, respectively, with corresponding PE ratios of 18, 14, and 12 times [7]. - The total share capital is approximately 2,466.73 million shares, with a total market capitalization of about 53.48 billion yuan [8]. - The company’s earnings per share (EPS) are projected to be 0.87 yuan in 2023, increasing to 1.87 yuan by 2027 [12].

Core Viewpoint - Hengtong Optic-Electric's performance in the first half of the year shows a slight increase in net profit, with strong order backlog supporting future growth [1] Financial Performance - In the first half of the year, Hengtong Optic-Electric achieved a net profit attributable to shareholders of 1.613 billion yuan, representing a year-on-year increase of 0.24% [1] - In Q2, the net profit attributable to shareholders was 1.056 billion yuan, reflecting a year-on-year decrease of 3.63% [1] Order Backlog and Growth Potential - As of the first half of 2025, the company has an order backlog of approximately 20 billion yuan in the energy interconnection sector, including submarine cables, marine engineering, and land cable products, which is expected to support sustained rapid growth [1] Expansion Projects - Hengtong Optic-Electric has recently commenced the construction of an advanced optical fiber materials R&D and manufacturing center, which is scheduled for completion in February 2026 [1] - The expansion project aims to meet the growing market demand for multimode, multi-core, and hollow-core specialty optical fibers [1] Industry Collaboration - In 2025, Hengtong, in collaboration with industry partners, plans to launch a new generation of immersion liquid cooling solutions tailored for high-density computing scenarios, addressing future cooling needs for data centers [1] Investment Rating - The company maintains a "Buy" rating based on its performance and growth prospects [1]

Core Viewpoint - The article discusses the advancements in liquid cooling technology for data centers, particularly highlighting Supermicro's new DLC-2 technology and its implications for energy efficiency and operational costs in the context of rising AI computing demands [2][5][9]. Group 1: Supermicro and DLC-2 Technology - Supermicro announced the launch of its next-generation DLC-2 technology, which has led to a fourfold revenue increase over the past three years, driven by the maturity of liquid cooling technology [2]. - The new data center construction modular solution (DCBBS) integrates the DLC-2 technology, achieving a 40% improvement in energy and water savings, a heat capture rate of 98%, and a noise level as low as 50db, while also reducing capital expenditures by up to 20% [2][9]. - Supermicro's stock has experienced significant volatility, with a 300% increase in 2023 due to AI demand, followed by an 80% decline in 2024 due to financial reporting delays and governance issues [7][12]. Group 2: AI Computing Power and Market Trends - NVIDIA's CEO Jensen Huang emphasized the critical role of computing power in AI development, noting that AI computing performance improves by a factor of one million every decade [4]. - The IDC report predicts that China's AI computing power market will reach $25.9 billion by 2025, growing 36.2% from 2024, while total energy consumption in Chinese data centers is expected to exceed 400 billion kWh, accounting for over 4% of total national consumption [4]. Group 3: Liquid Cooling Technology Overview - Liquid cooling technology is categorized into non-contact and contact types, with non-contact cooling being the most widely used due to its maturity [5]. - The average energy consumption for cooling systems in air-cooled data centers exceeds 50%, with higher ratios in AI computing centers [5]. - The emergence of high-density computing scenarios has led to the development of new immersion cooling solutions, which are expected to see widespread adoption as server power densities increase [5][6]. Group 4: Financial Performance and Future Outlook - MiaoSuan Technology, founded in 2023, aims for a revenue target of 300 million yuan in 2025, leveraging its immersion cooling technology [6][7]. - Supermicro's recent partnership with DataVolt in Saudi Arabia indicates ongoing interest in high-performance computing solutions despite past financial challenges [7]. - The operational efficiency of liquid cooling systems can lower Power Usage Effectiveness (PUE) to as low as 1.15, with potential for further reductions in specific areas [9].