Brokerage Morning Meeting Highlights | Continuing to Be Optimistic About the Allocation Value of the Liquid Cooling Sector

Yesterday, the three major indices showed mixed results, with both the ChiNext and SME indices falling by over 1%. The trading volume on the Shanghai and Shenzhen stock exchanges reached 1.96 trillion yuan, an increase of 14.3 billion compared to the previous trading day. In terms of sectors, the agriculture sector was repeatedly active, the fertilizer sector saw unusual surges, the non-ferrous and copper concepts performed actively, the media sector maintained its strength, and the oil and gas sector rebounded amid fluctuations. By the end of the trading day, the Shanghai Composite Index rose by 0.2%, the Shenzhen Component Index fell by 0.52%, and the ChiNext Index dropped by 1.15%. China Securities Co., Ltd. believes that the value of allocating to the liquid cooling sector remains optimistic; CITIC SEC states that the Tao Law has moved from a theoretical framework to a product stage, and suggests focusing on the domestic wafer manufacturing, semiconductor equipment, and testing industrial chain; Galaxy Securities believes that the self-sufficiency rate of domestic optical chips is accelerating its breakthrough. China Securities Co., Ltd.: Remains optimistic about the allocation value of the liquid cooling sector China Securities Co., Ltd. forecasts that the liquid cooling industry will see concentrated growth by 2026, with both domestic and international high-performance servers simultaneously adopting full liquid cooling solutions, and continuous release of orders for core components; in the future, the iterative improvement of high-power AI chips will reinforce the essential demand for liquid cooling, as domestic manufacturers continue to tackle precision processing and long-lasting sealing technologies, gradually achieving self-controllability over all core components of liquid cooling, and deeply benefiting from the expansion of global computing power construction. In terms of industry judgment, the performance of suppliers will show a trend of lower performance in the early stage followed by higher performance later, and in 2027, they will enter a stage of profit release driven by the annualization of Rubin orders, increased domestic share, and upgrade of product structure, maintaining a positive outlook on the allocation value of the liquid cooling sector. CITIC SEC: The Tao Law has moved from a theoretical framework to a product stage, focusing on the domestic wafer manufacturing, semiconductor equipment, and testing industrial chain The Tao Law has moved from a theoretical framework to a product stage. On September 4, He Tingbo, head of Huawei Semiconductor, published a follow-up paper on the Tao Law, focusing on addressing power consumption and heat dissipation issues of 3D stacked chips; on September 7, Huawei launched the Mate XT2 ULTIMATE DESIGN, which debuted with the Kirin 9050 Pro, achieving over a 42% performance improvement over the previous generation. We believe that the Kirin 9050 Pro becomes the first product validation window for the Tao Law. Logic Folding will increase demand for multi-layer active wafer manufacturing and wafer-level hybrid bonding, which will drive upgrades in CMP, cleaning, deposition, etching, measurement, and testing processes, suggesting a focus on the domestic wafer manufacturing, semiconductor equipment, and testing industrial chain. Galaxy Securities: The self-sufficiency rate of domestic optical chips is accelerating breakthrough Galaxy Securities states that supply and demand are in a tight balance, with the speed and optoelectronic integration accelerating evolution. Currently, the optical communication industry is experiencing a high-end product supply shortage, resulting in a tight balance. There are three notable changes observed in the industry: first, the evolution of speed has exceeded expectations, with the commercialization of 1.6T optical modules entering its inaugural year and launching large-scale shipments, while single-wave 400G and forward-looking solutions like 3.2T/6.4T have made a concentrated appearance, indicating that the combined market scale of 800G and 1.6T is expected to occupy a significant proportion of the overall market; second, the interconnected architecture is rapidly evolving towards "optoelectronic integration" to solve the power consumption and signal integrity bottleneck at high speeds, with NPO solutions accelerating the push of optical engines closer to switching chips, and CPO technology gradually moving from laboratory validation to small-scale delivery; third, the value of core underlying devices has become prominent, as advancements in 3.2T and NPO/CPO elevate the significance of upstream components such as DFB, EML, and precision coupling components, resulting in an accelerating breakthrough in the self-sufficiency rate of domestic optical chips. This article is reproduced from "Cailian Press," editor GMTEight: Xu Wenqiang.