On the evening of April 9, Dongyangguang (600673.SH) released its 2024 annual report alongside its Q1 2025 performance forecast. The report revealed that the company generated revenues of RMB 12.199 billion and net profit attributable to shareholders of the listed company (NPSLC) of RMB 375 million in 2024, marking a year-on-year absolute growth rate of 227.41%. Non-recurring net profit attributable to shareholders of the listed company (NNPSLC) stood at RMB 327 million, with an annual growth rate of 174.35%.

Remarkably, Dongyangguang's NPSLC for Q1 2025 is projected to range between RMB 253-323 million, representing a year-on-year increase of 156.17%-227.05%. Similarly, NNPSLC is expected to be RMB 244-314 million, up 166.25%-242.63% from the previous year.

Dongyangguang emphasized its commitment to a key customer strategy, adhering to the "innovation + internationalization" roadmap. By continuously driving technological innovation and industrial upgrades, deepening industrial collaboration, and strengthening ties with industry leaders, the company has successfully expanded its market presence. Additionally, through lean management practices and increased R&D investments, Dongyangguang has achieved significant cost reductions and efficiency gains, ensuring high-quality operational standards. These efforts have positioned the company for development opportunities in a challenging market environment, laying a solid foundation for sustained, high-quality growth.

Furthermore, Dongyangguang unveiled its inaugural ESG report, elevating ESG to a corporate-level priority. The report outlines the company's framework for ESG management, detailing its efforts in promoting lean management, technological innovation, green initiatives, employee engagement, and community contributions. This underscores Dongyangguang's commitment to environmental, social, and governance responsibilities.

I. Collaborative Industrial Clusters Facilitate Turnaround

Over two decades of development, Dongyangguang has established five major industrial clusters in electronic components, high-end aluminum foil, chemical new materials, energy materials, and liquid cooling technology. This has solidified its foundation and propelled it into the AI computing power and intelligent robotics sectors, significantly enhancing its core competitiveness in liquid cooling technology and embodied AI.

In the electronic components segment, Dongyangguang's foil production capacity in Wulanchabu, Inner Mongolia, is gradually scaling up, coupled with policy-driven electricity cost reductions, leading to lower unit production costs and year-over-year operating profit growth. In the chemical new materials sector, robust profits from the refrigerant business have bolstered overall profitability. Additionally, Dongyangguang's participation in the bankruptcy reorganization of Lanhengda will establish a second chemical production base, further optimizing its industrial layout and providing new growth impetus.

II. AI Demand Surge Drives Liquid Cooling Solutions

Dongyangguang has strategically positioned itself in cold plate and immersion liquid cooling technologies. After years of technological breakthroughs and supply chain integration, the company now produces aluminum cold plates, a core liquid cooling material, and offers mature liquid cooling solutions. Focusing on the cooling requirements of AI data center servers, optical modules, and energy storage industries, Dongyangguang stands as one of the few market leaders capable of providing comprehensive solutions encompassing aluminum cold plates, fluorinated cooling liquids, and both cold plate and immersion liquid cooling technologies.

Dongyangguang is constructing a comprehensive liquid cooling solution spanning "system-level, cabinet-level, server-level" with a diverse product range. In the prevalent cold plate liquid cooling segment, the company already covers core components and related services. For immersion liquid cooling, seen as a future trend, Dongyangguang has invested in Xinhan Technology, which specializes in biphasic immersion cooling, further strengthening its technological prowess and enhancing its full industrial chain from technology to production.

Dongyangguang aims to become a world-class supplier of liquid cooling components, materials, and solutions within 3-5 years through technological innovation and market expansion, capitalizing on the rapid evolution of AI technology and surging computing power demand. Intelligent computing center cooling is transitioning to more efficient liquid cooling solutions, heralding a multi-billion-dollar market expansion globally.

According to the latest IDC report, China's liquid cooling server market is projected to grow at a compound annual rate of 46.8% from 2024 to 2029, reaching a market size of USD 16.2 billion by 2029. Globally, CITIC Securities forecasts the liquid cooling market to reach approximately RMB 85.8 billion by 2027, with China's market exceeding RMB 10 billion, both experiencing a CAGR exceeding 100% from 2023 to 2027.

In response to this potential, Dongyangguang has forged a strategic partnership with InnoLight, a leading international optical module company, to promote comprehensive liquid cooling solutions globally. This partnership integrates Dongyangguang's cold plate R&D and fluorinated cooling liquid capabilities with InnoLight's optical module cooling design expertise, fostering a "materials + scenarios" synergy and jointly developing AI server cooling solutions. Commercially, InnoLight's downstream clientele includes global cloud computing giants, enabling the joint venture to promote Chinese liquid cooling standards worldwide through its domestic and international channels.

Moreover, Dongyangguang is strategically cooperating with the Shaoguan Municipal Government to align with the "East Data to West Computing" strategy. The company will establish a data center liquid cooling equipment manufacturing and supercapacitor R&D base in the Shaoguan Data Center Cluster, the sole national-level data center cluster in South China. This move will establish a complete industrial chain for data center liquid cooling and supercapacitors, enhancing market competitiveness and creating new profit growth avenues. Leveraging the Shaoguan Data Center Cluster's strategic position and policy advantages, Dongyangguang will deepen collaborations with upstream and downstream enterprises to build liquid cooling, supercapacitor, and AI industrial clusters, fortifying its long-term strategic layout in the data center sector and reinforcing its industry-leading position.

III. Embodied AI Orders Pave the Way for Full-Chain Development

As the AI era dawns, Dongyangguang has not only deployed full-chain liquid cooling solutions but also ventured into humanoid robots, the optimal platform for general AI. 2024 marked the "first year of humanoid robot commercialization," with the fusion of AI large models and humanoid robots propelling embodied AI to the forefront of global technological competition, revealing immense market potential and prospects.

With support from the Wuhan Municipal Government, Dongyangguang entered the intelligent robot field, co-founding Guanggu Dongzhi in Wuhan alongside Shanghai Zhiyuan, Beiwu Institute, and Lingchu AI. These entities signed multiple strategic cooperation agreements in Wuhan's East Lake New Technology Development Zone, leveraging collective resources to propel technological innovation and application implementation, jointly establishing China's largest and Central China's first advanced humanoid robot innovation center.

As the lead partner, Dongyangguang leverages its extensive industry experience and vast data, alongside Shanghai Zhiyuan's full-stack technological prowess, Beiwu Institute's AI algorithm expertise, and Lingchu AI's end-to-end model development capabilities, forming a seamless loop from data collection to model training and application development. This robust ecosystem underpins intelligent robot technology's application across diverse scenarios.

Significantly, Dongyangguang signed a "Robot Procurement Project Agreement" with Hubei Science and Technology Investment Group Co., Ltd., entrusting Guanggu Dongzhi with a robot project worth up to RMB 70 million. This marks Dongyangguang's first batch of market-oriented orders, opening up the full chain from embodied intelligent robot bodies to applications.

Meng Pengfei, chief analyst at Kaiyuan Securities' machinery industry division, recently noted at the "Intelligent Humanoid Robot: Gathering Momentum for the Future" SSE Yangtze River Delta Scientific Innovation Salon that humanoid robots could potentially become the first technology product to surpass smartphone shipments and exceed automobile unit prices. Regarding mass production timelines, Meng predicted a rapid scale-up, with production reaching 10,000 units within 3-5 years, 100,000 units in 2-3 years, 1 million units in 1-2 years, and 10 million units within half a year.

By deepening industrial collaborations, fostering technological innovation and upgrades, strengthening ties with industry leaders, and adhering to green development principles, Dongyangguang continuously strengthens its competitive edge. These new technologies, products, and ventures embody Dongyangguang's steadfast and high-quality advancement towards the AI era, promising long-term value through its investments and explorations in liquid cooling technology and embodied AI.

Source: ECNS