Summary of Liquid Cooling Industry Conference Call Industry Overview - The liquid cooling market is expected to see significant growth, with Google's demand for liquid cooling cabinets revised upwards from 30,000-40,000 units to approximately 65,000 units by 2026, indicating a market space increase of about 50% [2][3] - NVIDIA anticipates shipping 100,000 liquid cooling cabinets next year, corresponding to a market space of 70 billion RMB [1][4] - The global liquid cooling market is projected to reach a scale of 100 billion RMB by 2026, tripling from approximately 30 billion RMB in 2025, and could reach 200 billion RMB by 2028 [1][6] Key Players and Supply Chain - Major suppliers in NVIDIA's liquid cooling supply chain include AVC, Colmars, Baode, and Shuanghong, while CDU suppliers include Weidi, Delta, Ament Cool IT, and Schneider [5] - Google's CDU suppliers include Invec, Kohler Master, and Invent, with Invec holding a market share of 30%-35% [5] - Domestic suppliers include Invec, Shenling Environment, and Gaolan Co., which have a high localization rate [5] Company-Specific Insights Invec - Invec is highlighted as a key recommended company due to its capacity and technological advantages, showing significant competitiveness in acquiring overseas orders [7] - The company is expected to see a substantial improvement in performance, with stock prices potentially increasing by 40%-50% as it captures a 30% market share in the external cabinet market, leading to revenues exceeding 4 billion RMB and profits over 1 billion RMB [8] DingTong Technology - DingTong Technology has secured an order for 5,000 liquid cooling IO connectors and anticipates a near doubling of demand for 800G and 1.6T optical modules in 2026, which will significantly boost connector demand [9][10] YiDong Electronics - YiDong Electronics, engaged in OEM for server-related products, expects its OEM revenue to reach at least 1 billion RMB next year, with plans to expand capacity to meet customer demand [11] ShenLing Environment and GaoLan Co. - ShenLing Environment is positioned strongly in the domestic data center air cooling management systems and is expected to secure 20%-30% of Huawei's procurement share, with overseas orders amounting to at least 250 million RMB [12] - GaoLan Co. is also a key supplier for Huawei, with expectations of securing similar procurement shares and actively participating in Southeast Asian project tenders [12] Other Companies - Shuguang Digital Creation is a leading domestic company in immersion liquid cooling technology, collaborating with major North American clients like Meta and Google [13] - Siquan New Materials is focused on sample work within NVIDIA's supply chain and is advancing its related business development [13] Market Trends and Future Outlook - The increasing power consumption of AI computing cards and the rising penetration rate of liquid cooling solutions are expected to enhance the value of liquid cooling, with a sustainable gross margin of around 50% projected for the next 2-4 years [1][6] - The liquid cooling market is anticipated to align closely with the growth trajectories of optical modules and PCB sectors, indicating a robust future for the industry [6]

随着AI芯片功耗迈入"千瓦时代"，一场围绕散热的革命正悄然加速，液冷正从一个"可选项"迅速变为数据中心的"必选项"。 综合瑞银与东吴证券近期发布的深度报告，市场似乎仍未完全消化这场变革的颠覆性。报告明确指出，市场普遍低估了向液冷过渡的速度 和规模，这并非一次普通的硬件升级，而是由AI芯片激烈竞争驱动的"即时、战略性必要之举"。 这一结构性转变不仅将催生一个高达311.91亿美元（约合人民币2205.23亿元）的超级周期，更在重塑全球供应链格局，特别是为国产厂商 打开了进入核心体系的大门。 "热墙"来袭：当风冷走到尽头，液冷即将迎来爆发 AI算力的爆炸式增长，正将芯片推向一道"热墙"。据瑞银及东吴证券报告梳理，AI加速器的热设计功耗（TDP）正以惊人的速度攀升。 英伟达的GPU产品路线图清晰地展示了这一趋势：从H100的700W，到Blackwell B200的1200W，再到预计明年推出的VR200的1800W- 2300W，以及2027年可能超过3600W的VR300，直至未来Feynman平台可能高达5000W-7000W的功耗。 芯片功耗的飙升直接导致机柜功率密度急剧攀升。一个GB200 NVL72机柜 ...

Investment Rating - The report maintains a "Recommendation" rating for the company, with a target price of 62.4 yuan [2]. Core Insights - The company achieved a revenue of 3.977 billion yuan in the first three quarters of 2025, representing a year-over-year increase of 15.05%. The net profit attributable to shareholders reached 4.704 billion yuan, up 210.74% year-over-year [2]. - The company has shown continuous quarter-over-quarter growth in both revenue and profit, indicating a positive trend in its delivery and deployment [2][7]. - The company has a robust resource reserve, having successfully listed its REIT project, which enhances its financing capabilities [2][7]. - The company is expanding its liquid cooling deployment, with new centers exceeding the power capacity of conventional data centers [2][7]. - The company is well-positioned to benefit from the increasing demand for intelligent computing centers driven by AI development [2][7]. Financial Summary - For 2025, the company is projected to generate total revenue of 5.886 billion yuan, with a net profit of 5.217 billion yuan, reflecting a significant growth trajectory [2][8]. - The earnings per share (EPS) is expected to be 3.19 yuan in 2025, with a price-to-earnings (P/E) ratio of 15 [2][8]. - The company’s total assets are projected to reach 39.052 billion yuan by 2025, with a debt-to-equity ratio of 111.2% [8].

Core Viewpoint - The company has developed a comprehensive capability chain in liquid cooling solutions, leveraging its expertise in semiconductor packaging materials to provide end-to-end services from material design to system-level solutions [1] Group 1: Business Development - The liquid cooling business has naturally extended from packaging materials to liquid cooling components and system-level solutions [1] - The company has established a complete product matrix for secondary side liquid cooling, including MLCP, cold plates, quick connectors, CDU modules, and liquid cooling cabinets [1] Group 2: Service Offering - The business model allows the company to offer a full range of services to clients, including thermal simulation, structural design, prototype validation, and mass production [1] - The company utilizes a self-controlled manufacturing system to achieve cost optimization and high reliability in delivery [1]

Core Insights - The liquid cooling technology is gaining prominence in the digital economy era, driven by the "dual carbon" strategy and the national project "East Data West Computing" [1][2] - The capital market has responded positively, with the liquid cooling sector index rising by 2.22% and a total transaction volume of 58.358 billion yuan on November 13 [1] Industry Overview - Data centers, while being the engine of the digital economy, are also significant energy consumers, facing pressure to transform under the "dual carbon" strategy [2] - By 2025, data centers are required to improve energy efficiency by 30%, with a target Power Usage Effectiveness (PUE) of below 1.3, marking a critical threshold for operational viability [2] Technology and Market Dynamics - Traditional air cooling methods are inadequate for meeting the new efficiency standards, necessitating revolutionary cooling solutions like liquid cooling [2] - Liquid cooling technology can potentially reduce overall energy consumption in data centers by over 30%, with its cooling efficiency being significantly higher than that of air cooling [2] Competitive Landscape - The liquid cooling market is expanding rapidly, with companies like Zhongshi Technology and Wanma Technology increasing their investments in liquid cooling solutions [3] - The liquid cooling technology is evolving towards more efficient and intelligent systems, with two main types: cold plate liquid cooling and immersion liquid cooling, each with distinct advantages and cost implications [3] Future Trends - The immersion liquid cooling technology is expected to become mainstream as costs decrease, and it will likely integrate with AI and IoT for smarter thermal management [3]

Core Viewpoint - The company, Runze Technology, is positioned to benefit from the transition of liquid cooling from an optional solution to a necessary one for high-power computing, driven by the rapid increase in chip and cabinet power since 2025 [1] Group 1: Liquid Cooling Technology - Since 2023, the company has delivered the industry's first fully liquid-cooled intelligent computing center, indicating a significant advancement in liquid cooling deployment [1] - The company has expanded its liquid cooling deployment scale, applying its self-developed next-generation cold plate liquid cooling technology across multiple new intelligent computing center projects nationwide [1] - The new technology enables high-density, green deployment with individual cabinets exceeding 40 kW [1] Group 2: Market Position and Operations - The company has established itself as one of the earliest third-party suppliers to scale deploy high-performance domestic liquid cooling computing power, reinforcing its leadership in liquid cooling [1] - The operational stability of liquid cooling computing centers has improved, supporting the company's ongoing commitment to reliable and secure operations [1]

Core Viewpoint - Industrial Fulian, once labeled as a "contract manufacturer," has successfully transformed into a key supplier of global AI computing infrastructure, riding the wave of the AI boom and significantly increasing its market valuation [1][2][3] Financial Performance - In Q3, Industrial Fulian reported a net profit of 10.373 billion yuan, a substantial increase of 62.04% year-on-year, driven primarily by AI servers and high-speed switches [3][5] - For the first three quarters of 2025, the company achieved a revenue of 603.931 billion yuan, up 38.40% year-on-year, with a net profit of 22.487 billion yuan, reflecting a growth of 48.52% [5] - The cloud computing segment saw revenue growth exceeding 65% year-on-year, with Q3 alone showing over 75% growth, largely due to the demand for AI server products [5][6] Market Trends - The global demand for AI servers is expected to grow significantly, with projections indicating a market value of $298 billion by 2025, accounting for over 70% of the overall server market [9] - Major cloud service providers like Amazon, Microsoft, and Nvidia are expanding their AI computing infrastructure, leading to a surge in AI server demand [2][9] Strategic Positioning - Industrial Fulian has leveraged over 20 years of experience in large-scale intelligent manufacturing to meet the "contract manufacturing" needs for AI servers, enhancing customer stickiness [9] - The company is a key manufacturer of Nvidia's GB200 AI server products and is preparing for the mass production of the next-generation GB300 products, expected to ship in the second half of 2025 [2][10] Customer Engagement - Industrial Fulian has established deep collaborations with leading global clients to develop next-generation AI servers and liquid-cooled cabinets, providing customized solutions widely used in high-performance AI data centers [10] - The company is also actively involved in the design and development of robotics, applying these technologies in various automated production lines [11] Investment Interest - With high performance expectations, Industrial Fulian has become a core investment target for institutional investors amid the AI wave, rising from 157th to 7th in public fund holdings [13][14] - The AI computing sector is experiencing rapid growth, with significant capital flowing into companies like Industrial Fulian, indicating a shift from traditional sectors to AI computing leaders [14]

Core Viewpoint - Foxconn Industrial Internet Co., Ltd. (Industrial Fulian) is being revalued by the capital market as it transitions from a "contract manufacturer" to a key player in the AI computing infrastructure sector, with its stock price surging over 280% in less than six months, reaching a market capitalization of over 1.6 trillion yuan [1][2]. Financial Performance - In Q3, Industrial Fulian reported a net profit of 10.373 billion yuan, a significant increase of 62.04% year-on-year, driven primarily by AI servers and high-speed switches [2][3]. - For the first three quarters of 2025, the company achieved a revenue of 603.931 billion yuan, up 38.40% year-on-year, with a net profit of 22.487 billion yuan, reflecting a growth of 48.52% [3]. - The cloud computing segment saw a revenue increase of over 65% year-on-year, with Q3 alone showing a growth of over 75%, largely due to the demand for AI server products [3][4]. Market Trends - The global AI server market is experiencing robust growth, with major cloud providers like Amazon, Microsoft, and Nvidia expanding their AI computing infrastructure, leading to a projected market value of $298 billion by 2025 [6][10]. - Industrial Fulian is positioned as a critical manufacturer of AI servers, including Nvidia's GB200 and the upcoming GB300 products, which are expected to enhance revenue and profit potential [7][10]. Business Segments - The company’s communication and mobile network equipment business is also benefiting from AI-driven demand, with significant growth in the switch business, particularly in 800G switches, which saw a year-on-year increase of over 27 times in Q3 [4][8]. - Industrial Fulian is actively involved in the design and development of robots, with applications in automation across various business lines, including logistics and production [8]. Investor Sentiment - Institutional investors are increasingly favoring Industrial Fulian, with its ranking among public funds rising from 157th to 7th, indicating strong market recognition of its leadership in the AI server sector [9]. - The company is expected to maintain its leading position in the AI computing supply chain, benefiting from strong demand and improving profit margins as it scales up production [10].

Core Viewpoint - The liquid cooling cabinet is an efficient cooling device that uses liquid as a heat transfer medium, crucial for data centers aiming to reduce carbon emissions and meet high-density cooling demands driven by the rise of generative AI. The global shipment of liquid cooling cabinets is expected to reach 150,000 units by 2026 and 470,000 units by 2030 [1][5]. Group 1: Industry Definition and Classification - Liquid cooling cabinets are defined as high-efficiency cooling devices that utilize liquid to dissipate heat from servers and other equipment. They integrate key components like cooling liquid distribution units and monitoring systems into a standard cabinet framework, creating a plug-and-play cooling environment [2][4]. - The main types of liquid cooling cabinets include cold plate, immersion, and spray cooling cabinets, with cold plate cabinets being the most widely used due to their simple structure and lower costs [3]. Group 2: Current Industry Status - The global liquid cooling cabinet industry is experiencing growth due to the increasing focus on energy conservation and carbon reduction in data centers, which are significant carbon emitters. The demand for high-density cooling solutions is rising alongside the development of generative AI [5]. - In China, the liquid cooling cabinet market is expanding rapidly, driven by strong governmental support for AI infrastructure. The number of operational data center racks in China is projected to grow from 8.1 million in 2023 to 22.5 million by 2025 [6][8]. Group 3: Industry Supply Chain - The liquid cooling cabinet supply chain includes components such as cabinet bodies, independent compartments, connectors, condensers, cooling towers, pumps, monitoring systems, and electrical control systems. The midstream involves manufacturing and system integration, while the downstream applications are primarily in data centers and AI computing centers [8][9]. Group 4: Competitive Landscape - The liquid cooling cabinet market is witnessing explosive growth, with several domestic companies actively investing in liquid cooling technology. Key players include Inspur Information, Industrial Fulian, H3C, Dell, Supermicro, and Huawei Digital Energy, among others [10][11]. - Inspur Information has adopted an "All-in Liquid Cooling" strategy, continuously innovating its product offerings to support liquid cooling across its entire server product line. The company reported a revenue of 114 billion CNY from servers and components in 2024, accounting for 99.33% of its total revenue [13][14]. Group 5: Industry Development Trends - The liquid cooling cabinet is becoming a fundamental infrastructure unit in the AI computing era, integrating advanced thermal management technologies. The market is expected to grow significantly due to the rapid development of data centers, cloud computing, and AI, with increasing demand for efficient cooling solutions [17]. - As AI computing demands continue to rise, liquid cooling cabinets are anticipated to transition from high-end applications to standard configurations in intelligent computing centers and cloud data centers, with a trend towards higher density and increased intelligence in monitoring capabilities [17].

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [6][18]. Core Views - The company achieved a revenue of 2.496 billion yuan in the first half of 2025, representing a year-on-year growth of 15.31%, while the net profit attributable to the parent company was 882 million yuan, down 8.73% year-on-year [1]. - The company is expected to accelerate its performance in the second half of the year due to a strong delivery schedule and existing customer orders, with significant contributions anticipated from new data centers in Pinghu, Foshan, and Huizhou [2]. - The company has successfully delivered approximately 220MW of computing centers in key regions, achieving a historical high in delivery scale, and has made significant advancements in the size of individual data centers [3]. - The company is a leader in liquid cooling, IDC, and AIDC, having established a comprehensive framework for integrated computing centers across the country, with a significant number of intelligent computing centers and cabinet resources [4]. - The company has ample cash resources, totaling 5.49 billion yuan as of the first half of 2025, which will support horizontal mergers and acquisitions to enhance market share and industry concentration [5]. Financial Summary - The company adjusted its profit forecast for 2025 and 2026, estimating net profits of 2.4 billion yuan and 3.2 billion yuan respectively, with corresponding PE ratios of 36 and 27 times [6]. - The company reported a gross margin under pressure, but the overall development of data centers and intelligent computing centers is progressing rapidly, with expectations for positive impacts on profits from accelerated deliveries in the second half of the year [6]. - The company’s total assets are projected to grow from 23.31 billion yuan in 2023 to 37.28 billion yuan by 2027, indicating a strong growth trajectory [13].