Summary of Conference Call Notes Industry Overview - **Industry**: China Data Center Equipment - **Key Players**: Schneider Electric, Vertiv, Eaton, Kstar, Kehua Core Insights and Arguments - **Schneider Electric's Q425 Results**: - Reported strong results and is positioned to support NVIDIA's next-level GPU requirements with a new data center power distribution architecture - Introduced the 800V-DC sidecar architecture, expected to impact 15-25% of demand through 2030 - Anticipates 18-24 months of order backlog visibility for data centers, supporting revenue growth in 2026 [2][3] - **Vertiv's Performance**: - Achieved a 252% YoY and 117% QoQ growth in 4Q25 order intake, totaling $8 billion, significantly exceeding expectations - Backlog more than doubled YoY to $15 billion, driving organic sales growth of 28% for FY26 - Management believes the company is in the early stages of a secular growth trend [3] - **Eaton's Data Center Business**: - Reported a 40% YoY increase in data center sales for 4Q25, with a 200% YoY increase in order backlog - Management is optimistic about double-digit long-term growth in the data center market from 2026 [3] - **Chinese Manufacturers' Outlook**: - Kstar and Kehua are expected to benefit from strong new orders and accelerated development of 800VDC technology - Anticipated commercial production for 800VDC could start in Q3-Q426, with domestic data center growth expected to drive power equipment demand [4] Additional Important Insights - **Risks for China's Data Center Equipment Sector**: - Potential risks include slower-than-expected AI data center capacity growth, slower penetration of high-power density products, and challenges in gaining market share in overseas AIDC equipment supply chains [7] - **Valuation and Risk Statements for Kehua and Kstar**: - Downside risks include slower IDC capacity expansion and challenges in entering overseas hyperscaler supply chains - Upside risks include faster IDC capacity expansion and stronger relationships with hyperscalers leading to market share gains [8][9] - **Price Targets**: - Kehua Data: Buy rating with a price target of Rmb62.65 - Shenzhen KSTAR Science and Technology Co: Buy rating with a price target of Rmb56.87 [21] This summary encapsulates the key points from the conference call, highlighting the performance and outlook of major players in the China data center equipment industry, along with associated risks and valuation insights.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Data Center Equipment in China - **Key Company**: NVIDIA Core Insights and Arguments - **Transition to 800VDC Architecture**: NVIDIA released a white paper detailing the transition to an 800VDC power distribution model for AI infrastructure, confirming a phased approach to this transition [2][4] - **Phase 1**: Retrofit with an 800VDC side rack to convert from 480VAC to 800VDC - **Phase 2**: Replace UPS with high power density rectifiers - **Phase 3**: Utilize Medium Voltage rectifiers or Solid State Transformers (SST) for direct conversion from medium voltage to 800VDC - **Energy Storage as Essential Component**: Energy storage is highlighted as a critical part of the 800VDC architecture, addressing load swings and enhancing compatibility with DC environments [4] - **Short Duration Storage**: High power capacitors and super capacitors for high frequency power volatility - **Long Duration Storage**: Located at grid interconnections for managing larger power shifts - **Commercialization Timeline**: Anticipated delivery of HVDC systems starting from the second half of 2026, with mass production scaling from 2027 and SST commercialization ramping up from 2029 [2] Key Suppliers and Partnerships - **NVIDIA's Ecosystem**: Key industry partners aiding the development of the 800VDC system include major power system component providers and data center power system providers such as ABB, Eaton, and Siemens [3] Investment Insights - **Top Pick**: Kehua Data is identified as a top pick within the Chinese AIDC supply chain due to its potential for overseas HVDC market penetration and technological advantages [5] - **Valuation Risks**: Major downside risks for the data center equipment sector include slower-than-expected AI data center capacity growth and market share gains in overseas AIDC equipment supply chain [10][11] Valuation Methodology - **Price Target for Kehua**: Based on a DCF methodology, with potential risks including slower IDC capacity expansion and lower-than-expected overseas shipments of energy storage systems [11][23] Additional Considerations - **Market Dynamics**: The report emphasizes the importance of energy storage in the evolving data center landscape, driven by increasing capital expenditures in the sector [4] - **Analyst Contact Information**: Analysts involved in the report include Yishu Yan, Ken Liu, and Anna Yuan, providing insights into the sector [6] This summary encapsulates the critical points discussed in the conference call, focusing on the transition to 800VDC architecture, the role of energy storage, key partnerships, and investment insights regarding Kehua Data.