Investment Rating - The report does not explicitly state an investment rating for the liquid cooling industry. Core Insights - The Chinese liquid cooling industry is structured into three tightly connected segments: upstream (core components), midstream (liquid cooling IT equipment and technology), and downstream (application empowerment and infrastructure construction) [2][7]. Upstream Summary - The upstream segment is the core foundation of the entire industry chain, comprising high-value and high-barrier components such as cooling liquids, cold plates, quick connectors, and CDU. This segment directly determines system cooling efficiency, safety, and reliability. The average gross profit margin in this segment is over 25%-30%, with some high-barrier technology segments reaching 40%-60%, which is higher than midstream and downstream [3][11]. - Currently, the market is characterized by international giants dominating the high-end market, while domestic companies accelerate replacement in niche areas and achieve breakthroughs in some core segments [3][11]. Midstream Summary - The midstream segment serves as the core transformation and integration link, focusing on cold plate and immersion liquid cooling systems, CDU, and liquid cooling servers. Customized solutions are provided to meet the high power density cooling demands of downstream applications. The current landscape shows leading companies dominating, with differentiated competition between domestic and international players, and accelerated domestic replacement driven by AI [4][10]. - Future developments are expected to trend towards integrated solutions, intelligent integration, penetration of immersion technology, and deep collaboration with upstream and downstream partners [4][10]. Downstream Summary - The downstream segment is driven by demand, primarily focusing on data centers. The current situation is characterized by dual drivers from policies (carbon neutrality, East Data West Computing) and the explosion of AI computing power, leading to rapid market expansion and increasing penetration of liquid cooling in high-density scenarios. Future trends will involve deepening technology towards immersion, standardization, and intelligent upgrades [5][18]. - In terms of infrastructure construction, the three major telecom operators in China have formed a unified vision and differentiated development in liquid cooling infrastructure. As of January-May 2025, the proportion of new projects utilizing liquid cooling has reached 60%-70%, with improved compatibility between domestic computing cards and liquid cooling equipment [15][17].

Core Insights - The liquid cooling server industry is experiencing significant growth, driven by increased demand for high-density servers and efficient cooling solutions [1][2] - Major companies are actively investing in liquid cooling technologies, with substantial market opportunities projected in the coming years [2][3] Industry Developments - Xiechuang Data plans to invest up to 9 billion yuan to purchase servers from multiple suppliers, indicating accelerated infrastructure development in cloud computing [1] - The 5th International AIDC Liquid Cooling Supply Chain Summit will be held on December 18-19, focusing on technology exchange and market trends [1] Market Projections - UBS forecasts that the global direct liquid cooling market for data centers will grow from $1.138 billion in 2024 to $31.191 billion by 2030, with a compound annual growth rate of 51% [2] - The AI server liquid cooling market is expected to reach $23.746 billion, while the non-AI server liquid cooling market will grow to $7.446 billion [2] Company Highlights - Yingweike (002837) holds over 35% market share in liquid cooling technology and is a designated temperature control supplier for major clients like Tencent and Alibaba [2] - Shenling Environment (301018) is a core supplier for Huawei's data centers, with 63 liquid cooling patents and a PUE as low as 1.15 [2] - Highlan (300499) uniquely supplies both server and energy storage solutions, with a client base including ByteDance and Alibaba [3] Key Component Suppliers - Juhua (600160) is a leading domestic supplier of electronic-grade fluorinated liquids, aiming for a 15% global market share by 2025 [4] - Feirongda (300602) specializes in integrated cooling solutions and is a core supplier for Huawei servers [5] - Zhongshi Technology (300684) provides unique nano-carbon material cooling plates, with over 90% of its business in liquid cooling modules [5] System Integration Leaders - Inspur (000977) is a leading global liquid cooling server provider, with a projected market share of over 45% in 2024 [6] - Zhongke Shuguang (603019) collaborates on liquid cooling server development, introducing a high-density cooling solution for complex computing scenarios [6] - Unisplendour (000938) has a significant market presence with over 35% share in the operator market and expects liquid cooling orders to exceed 5 billion yuan in 2024 [6] Other Relevant Companies - Guangxun Technology (002281) is the only domestic company to achieve mass production of liquid cooling optical modules, holding a 15% global market share [7] - Changfei Optical Fiber (601869) applies optical fiber technology to liquid cooling, enhancing data transmission efficiency [8] - Ruijie Network (301165) offers a full range of liquid cooling products and has launched a new immersion liquid cooling switch [8]