Envicool(SZ:002837)2026-01-20 03:19Summary of Shenzhen Envicool Technology (002837.SZ) Conference Call Company Overview - Company Name: Shenzhen Envicool Technology - Stock Code: 002837.SZ - Industry: AI Robotics & Power, specifically focusing on server cooling technologies Key Points and Arguments 2026 Sales and Earnings Outlook - Envicool anticipates sales growth exceeding its historical target of 30% per annum, with earnings growth expected to outpace sales growth in 2026, marking a critical inflection point for mass production across multiple customers and supply chains [1][23] - The company projects total sales growth of 79% in 2026 and 49% in 2027, with earnings growth of 127% in 2026 and 67% in 2027 [1] Growth Drivers 1. ASIC Supply Chain Breakthroughs: Significant contributions from Coolant Distribution Unit (CDU) products are expected in the second half of 2026, particularly from the 2MW Google Project Deschutes 5 design [1][15] 2. NVIDIA Ecosystem Penetration: A 20x capacity expansion for Quick Disconnects (QDs) is set to be operational by the end of Q1 2026 to meet rising demand [1][16] 3. BESS Growth: The energy storage system (ESS) cooling segment is projected to grow significantly, driven by global demand and increased content value in overseas markets [1][19] Financial Projections - Revenue Forecast: Expected revenues of Rmb 11.54 billion in 2026 and Rmb 17.23 billion in 2027 [1][14] - EBITDA Forecast: Projected EBITDA of Rmb 1.66 billion in 2026 and Rmb 2.76 billion in 2027 [1][14] - Earnings Per Share (EPS): Expected EPS of Rmb 1.45 in 2026 and Rmb 2.42 in 2027 [1][14] Margin Trends - The company expects an increase in overall margins in 2026 due to a rising mix of overseas sales, despite potential near-term headwinds from commodity price increases [1][20] - Forecasted Gross Profit Margin (GPM) of 28.6% in 2026 and 29.1% in 2027, with Net Profit Margin (NPM) of 12.3% in 2026 and 13.7% in 2027 [1][20] Capacity Expansion - Envicool is expanding production capacity both domestically and internationally, including a 20x increase in QD capacity by the end of Q1 2026 [1][17] - The company is also ramping up capacity in the US and Thailand for server cooling products [1][17] Investment Thesis - The company is rated as a "Buy" with a target price of Rmb 121.1, based on a projected P/E of 42x for 2028E discounted back to 2026E [1][24] - Envicool is positioned to capture a growing share of the global server liquid cooling market, with expectations of 5% market share in 2027E, 7% in 2028E, and 10% by 2030E [1][23] Additional Important Insights - The company is selective in domestic data center cooling projects due to intense pricing competition, while the overall industry demand remains strong [1][20] - Envicool's strong R&D capabilities and extensive experience in liquid cooling deployment position it favorably against new entrants in the market [1][16] This summary encapsulates the critical insights from the conference call regarding Shenzhen Envicool Technology's growth prospects, financial outlook, and strategic initiatives in the server cooling market.