Dongxing: The IDC industry is expected to accelerate the transformation and upgrading of traditional data centers.

Dongxing released a research report stating that although the IDC industry is facing opportunities for AI development, the proportion of high-power cabinets in existing cabinets is still low. Looking ahead to 2025, driven by new formats such as private deployment of DeepSeek, large-scale model inference business explosion, and car networking, the IDC industry is expected to accelerate the transformation and upgrading of traditional data centers in China. Currently, the IDC industry has increased capital expenditure, with top enterprises performing steadily and supportive policies at the upper level yet to be implemented. This round of high prosperity in the AIDC industry is expected to exceed three years. Dongxing's main points are as follows: Investing in IDC, looking at incremental growth, but also focusing on existing market AI-driven IDC industry is entering the AIDC development stage. However, it is important to note that the current domestic IDC market has exceeded 150 billion yuan, with a large industry of 8.8 million standard racks. In addition to seizing investment opportunities in the AIDC industry, it is important to also consider the operational situation of existing data center markets. The transformation of original cabinets in data centers to high-power is a necessary step for IDC enterprises to enter the AI era. In 2024, Shanghai AtHub actively carried out the transformation of existing cabinets In 2024, Shanghai AtHub's expenditure on technical equipment upgrades for data centers amounted to 226 million yuan, an increase of 82.3% year-on-year, reaching a new high since 2020. In 2024, the proportion of high-power cabinets in Shanghai AtHub was about 11%. Assuming: (1) Assuming a construction cost of 120,000 yuan per cabinet, with high-power cabinet transformation expenditure accounting for 10%, equivalent to 12,000 yuan; (2) Shanghai AtHub's expenditure on high-power transformation in data center equipment upgrades in 2024 is about 100 million yuan. It can be calculated that the company has about 8,300 high-power cabinets in existing cabinets, accounting for 11% of existing cabinets. Century Internet's retail business has a high-power cabinet ratio of about 15% According to Century Internet's annual report, as of the end of 2024, the company's base business operating capacity was 486MW, equivalent to about 60,800 standard cabinets with a capacity of 8KW per cabinet, and the number of cabinets in the urban business was 52,100. The average power of a single cabinet in Century Internet's base business is about 8KW, which can be divided into a high-power cabinet section. According to Dongxing's calculations, the proportion of high-power cabinets in the company's urban business (retail model) is about 15%. Related targets Range Intelligent Computing Technology Group (300442.SZ), Shanghai Baosight Software (600845.SH), Beijing Sinnet Technology (300383.SZ), Wangsu Science & Technology (300017.SZ), Guangdong Aofei Data Technology (300738.SZ), Shanghai AtHub (603881.SH), RunJian Co., Ltd. (002929.SZ). Risk warning (1) AI computing power demand is lower than expected; (2) Energy policies become stricter; (3) Changes in competitive landscape.