The company has established early reserves and comprehensive product portfolios in AIDC power supply-related fields, ranking first in industrial UPS in Asia. In recent years, HVDC products have achieved breakthrough progress, while liquid cooling products and overseas markets are experiencing breakthroughs. The company's AIDC sector may be driven by four key forces in the future. In terms of performance, accompanied by the gradual delivery of domestic AIDC orders and the stabilization of new energy business, the company's Q2 performance reached a new high in nearly 2 years. We expect that the company's profitability and new orders are likely to accelerate simultaneously.
**Q2 Performance Reaches New High in Nearly 2 Years**
The company released its 2025 interim report, showing revenue, net profit attributable to shareholders, and adjusted net profit of 3.73 billion yuan, 240 million yuan, and 220 million yuan respectively for the first half of the year, representing year-over-year growth of 0.1%, 7.9%, and 9.2% respectively. For Q2 alone, revenue, net profit attributable to shareholders, and adjusted net profit were 2.52 billion yuan, 180 million yuan, and 160 million yuan respectively, showing year-over-year growth of -1.2%, 14.8%, and 12.1%, while quarter-over-quarter growth surged 107%, 153%, and 166% respectively. Q2 profitability reached a new single-quarter high in nearly 2 years, exceeding performance expectations. The company has consistently maintained excellent cash collection, and based on substantial depreciation provisions in 2024, credit and inventory impairment totaled 88 million yuan in Q2 this year, indicating high performance quality.
**Business Segment Breakdown:** a) Data Center: Total revenue of 1.398 billion yuan, up 16.77% year-over-year, including IDC services of 613 million yuan (up 0.15% year-over-year) and AIDC products of 784 million yuan (up 34.2% year-over-year). b) New Energy: Revenue declined slightly by 4.22% to 1.852 billion yuan, with gross margin increasing 0.63 percentage points year-over-year to 17.51%. c) Smart Power: Revenue of 439 million yuan, down 22.56% year-over-year, with gross margin improving 1.9 percentage points to 36.39%. d) Regional: Domestic revenue declined slightly by 2% in the first half, but overseas revenue grew 24.7% year-over-year, with overseas gross margin at 42.07%, significantly outperforming domestic at 22.30%.
**AIDC Segment's Four-Fold Drivers to Become Future Growth Engine**
The company has a broad product range in the AIDC field, with business models primarily focused on direct sales and major customers, and management and organizational structures suitable for the current AI ecosystem. Having cultivated the data center sector for an extended period, the company currently operates computing power businesses and maintains multiple joint ventures with Tencent, providing insights into industry trends. Looking ahead, the company's AIDC sector has four driving forces:
a) The company ranks first in industrial UPS in Asia, with modular and containerized integrated products for AI scenarios beginning deployment. UPS remains the mainstream solution for overseas CSPs and continues rapid growth.
b) The company has made significant progress in HVDC, securing consecutive wins with leading internet clients in recent years and substantially increasing market share on platforms like Tencent, establishing HVDC in the first tier.
c) Early-deployed liquid cooling solutions are poised for breakthroughs in the domestic market; additionally, the company's liquid cooling products began delivery in the United States in 2024.
d) Positive progress in overseas markets, which have become a strategic priority for the company. Currently, the company has achieved market presence in Southeast Asia and may accelerate cooperation with overseas CSPs and tier-1 integrators in the future.
**Risk Warnings:** 1) AIDC demand below expectations: If overall market demand growth falls short of industry expectations, the company may face insufficient capacity utilization and extended capital expenditure payback periods, affecting profitability and future development potential.
2) Asset and credit impairment risks: Under macroeconomic downturns, low industry sentiment, or poor company operations, non-current assets such as fixed assets, goodwill, and long-term equity investments may experience value declines, triggering asset impairment losses. Simultaneously, if customers or counterparties experience financial deterioration, extended collection periods, or defaults, financial assets like accounts receivable will face higher credit impairment risks.
3) Intensified competition in new energy sector: The new energy industry has transitioned from early growth dividend periods to deep competition phases, with frequent price wars among enterprises, serious product homogenization, and accelerated technological iteration. If companies cannot maintain sustained competitive advantages, market share may be eroded, facing risks of declining operating performance.
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