Tracking the Hong Kong stock concept | Domestic internet companies are vigorously investing in computing power, increasing capital expenditures and driving equipment demand growth (attached concept stocks)

Terminal customers have a strong demand for AI computing power, and internet companies are increasing their purchases of AI DC, servers, and other computing infrastructure. In the first three quarters of 2024, BAT's total capital expenditures reached 86.721 billion yuan, a year-on-year increase of 119.80%. In the third quarter of 2024, total capital expenditures reached 36.230 billion yuan, a year-on-year increase of 117.15% and a quarter-on-quarter increase of 57.93%. According to Jiemian News, Xiaomi is currently building a GPU card cluster and heavily investing in AI large models. Xiaomi's large model team already has 6,500 GPU resources, and according to Xiaomi's 2023 anniversary speech, Xiaomi's large model technology focuses on lightweight and local deployment. In terms of server capital expenditure in 2024, according to Omida data, global server capital expenditures are approximately $229 billion, with ByteDance spending about $8 billion, Tencent about $6 billion, Alibaba about $3 billion, and internet companies continuing to invest in computing infrastructure. According to third-party forecasts, the total installed power of global data centers is expected to increase from 49GW in 2023 to 96GW in 2026, with 40GW driven by intelligent computing, accounting for 85% of the total increase. In the next five years, institutions predict that the compound annual growth rate of computing power will remain above 50%. In the total cost structure of data centers (excluding servers and related equipment outside of the network system, including infrastructure), electrical equipment accounts for nearly 50%, mainly including high/low voltage distribution systems and automatic switching devices, diesel generators, uninterruptible power supplies, cooling systems, rack power supplies, etc. Data centers have high requirements for related products, which may bring some incremental growth to certain specific areas. Related Hong Kong stocks of computing equipment: Weichai Power (02338): The barrier to entry for engine supply is high, mainly dominated by foreign brands such as Cummins, Caterpillar, and MTU. According to industry feedback, engine supply has been relatively tight since the second half of 2024, with Cummins raising diesel-related business guidance for three consecutive quarters. The future supply bottleneck may increase, and companies with domestic and foreign engine supply guarantees have an advantage. For domestic engines, companies like Weichai and Yuchai are actively importing, with great potential for substitution in the future. ZTE Corporation (00763): The new generation of high-performance 400GE/800GE data center switches support single-slot 14.4T, use intelligent lossless technology to achieve zero packet loss and low latency, have green energy-saving features, and help customers build architecture-optimal, feature-rich, highly reliable intelligent computing center networks; innovative frame-type single-layer multi-track networking solutions are used to flexibly and efficiently build thousands of card/w kann card computing power clusters. This series of products maintains the highest rating of VeryStrong for the same domestic products according to the IDC 2023Q3 report, with the fastest year-on-year growth in market share in the domestic data center switch market compared to other companies. Data centers have become a focus as the infrastructure for cloud computing and edge computing, gradually becoming an important area for industry investment. As a leader in green and intelligent data centers, ZTE Corporation has released a new generation of data centers focusing on green energy-saving, rapid and easy construction, intelligent management, and safety and reliability, and has introduced innovative energy-saving products such as power modules and liquid cooling systems, with a PUE as low as 1.13 applied in Jiangsu, Guizhou, and other areas. At the same time, actively responding to the "Double Reduction" policy, it has comprehensively launched eight core node data center complete solutions and continuously expanded deployment scales in key nodes such as Gansu, Helinge'er, and Ningxia. Building core competitiveness in self-developed products, actively practicing and creating a benchmark for the Binjiang liquid-cooled intelligent computing center.