On the evening of November 26, 2025, Shenzhen Megmeet Electrical Co., Ltd. (Megmeet) announced that its private placement plan had received approval from the Shenzhen Stock Exchange.
According to the subsequent registration draft, the company aims to raise up to 2.663 billion yuan ($366 million). The net proceeds will be allocated to multiple projects: R&D center expansion and smart power control testing center (188 million yuan), the second phase of Changsha industrial center (828 million yuan), the second phase of Thailand production base (836 million yuan), Zhuzhou base expansion (178 million yuan), and working capital supplementation (770 million yuan).
Following the announcements, Megmeet’s stock price surged by 15% over 11 trading days from December 4 to December 18. This market reaction aligns with expectations, as Megmeet’s collaboration with NVIDIA since October 2024 has drawn significant attention to its entry into the AIDC power supply sector. The private placement is seen as a critical step in securing R&D and production capacity for future power product shipments.
However, the transition to HVDC (High Voltage Direct Current) power systems for AIDC remains in its early stages, with several uncertainties:
1. **Unclear Technology Pathways** The shift toward HVDC is not unique to AI but stems from the limitations of physics—large-scale power transmission eventually adopts high-voltage DC solutions for efficiency and stability. Low-voltage, high-current alternatives incur higher thermal losses, demanding thicker cables and advanced cooling systems, which escalate costs.
AI data centers (AIDCs) present unique challenges, requiring precise power regulation to bridge robust grid power with sensitive electronics. Multi-stage conversions inflate copper usage and footprint, while performance demands complicate technological breakthroughs.
At the 2025 GTC conference, NVIDIA introduced its 800V HVDC "Kyber Side Car" solution, prompting varied technical responses from suppliers. Current HVDC approaches include: - Conventional transformers with AC/DC conversion (widely adopted but low-barrier). - "Panama Power" architecture, integrating power modules for single-stage conversion (still reliant on power shelves). - Solid-State Transformers (SSTs), leveraging SiC/GaN semiconductors for compact, high-efficiency solutions (limited to pilot projects).
The winning technology remains uncertain, hinging on R&D progress and evolving AIDC power needs—a market still dominated by overseas players.
2. **Ambiguous Market Potential** Megmeet projected 500 million yuan ($69 million) in 2025 revenue from AI server power supplies during an April earnings call—just 6% of its 2024 total revenue (8.2 billion yuan). Disappointed investors drove its stock to yearly lows.
Two factors constrain near-term growth: - HVDC adoption may not scale until 2027, when NVIDIA’s Rubin Ultra (requiring megawatt-level HVDC) enters mass production. - Current shipments rely on conventional 5.5kW power supplies, with high-voltage modules delayed until late 2026.
Estimates based on Delta Electronics’ power shelf pricing (4–5 yuan/watt) and Semi Analysis’ data suggest a 160–200 billion yuan ($22–27.5 billion) global opportunity from 2023–2026—equivalent to 20% of China’s 2024 mobile gaming market. However, rapid AIDC evolution and incomplete product standards cloud projections.
3. **Substantial Pre-Revenue Costs** Megmeet’s 2.03 billion yuan ($279 million) investment—nearly matching its Q3 2025 fixed assets—requires three years of construction and five more to reach full capacity. With 2024 R&D spending at 1 billion yuan ($138 million), sustained expenditures could strain profitability.
The company’s traditional business struggles further: Q3 2025 saw its first-ever non-GAAP net loss, with net margins at 3.54%. If new products fail to lift margins to 5–10%, the projected 6 billion yuan ($825 million) annual revenue at full capacity may yield only 300–600 million yuan ($41–82 million) in net profit—a modest return on heavy upfront costs.
Investors are advised to scrutinize Megmeet’s cost structure and pricing power in high-voltage products.
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