New stock preview|Revenue and profit change trends diverge, Shenzhen Megmeet Electrical (002851.SZ) Hong Kong IPO tests the ability to realize AI power business

"The end of AI is electricity." In recent years, with the exponential increase in computing power demand, the electricity gap caused by AI is attracting more and more attention and concern. For example, the power of a single cabinet in an AI data center has soared from traditional 10-20 kilowatts to several hundred kilowatts. In the industrial transformation, the power system is no longer just a supporting role, but the core infrastructure that determines whether computing power can be stably released. According to Zhukshi Consulting data, the global data center power market is expected to reach 429.5 billion yuan by 2030. In this electricity revolution, Shenzhen Megmeet Electrical (002851.SZ) is trying to play a key role. GMTEight noticed that Shenzhen Megmeet Electrical recently submitted an application for listing to the Hong Kong Stock Exchange. According to the prospectus, the company defines its mission as: "Efficient use of electricity, providing a comfortable living environment for humans in the intelligent era." Centered around three core technology platforms of power transformation, digital power control, system control and communication, Shenzhen Megmeet Electrical has built a complete product system of "core components + software + system solutions", covering six major areas: power supply, new energy transportation, industrial automation, smart living, intelligent equipment, and magnetic and precision electronics. In the most concerned arena of AI computing infrastructure power supply, the company is the first in mainland China and one of the few in the world to provide a system-level power supply solution with 800V HVDC megawatt-level rack power system and AI data center power conversion efficiency exceeding 98%. Layout in the AIDC field intensifies, profits continue to be under pressure Shenzhen Megmeet Electrical was established in 2003, and publicly available information shows that its core team comes from Huawei Electric and Emerson. The company was listed on the Shenzhen Stock Exchange in March 2017. From the revenue perspective, Shenzhen Megmeet Electrical has maintained a steady growth trend over the past three years. In the years 2023 to 2025, the company's operating income was 6.754 billion yuan, 8.172 billion yuan, and 9.403 billion yuan, with a compound annual growth rate of approximately 18.0%. In the first quarter of 2026, revenue increased further to 2.788 billion yuan, a year-on-year increase of 20.35%. In terms of business structure, smart living (frequency conversion home appliances and smart bathroom) remains the largest source of income for the company, contributing 3.559 billion yuan to the total revenue in 2025, accounting for 37.9%. Power products rank second, with revenue of 2.68 billion yuan, accounting for 28.5%. New energy transportation products grew the most rapidly, with revenue of 1.145 billion yuan in 2025, a substantial increase of 108.65% year-on-year. In addition, industrial automation, intelligent equipment, and precision connections contributed 877 million yuan, 605 million yuan, and 449 million yuan, respectively. However, the other side of revenue growth is the sustained pressure on profits. In the years 2023 to 2025, the company's gross profit was 1.659 billion yuan, 2.025 billion yuan, and 2.054 billion yuan, with the gross profit margin decreasing from 24.6% to 21.8%. The decline in net profit was even more significant, with net profits of 625 million yuan, 459 million yuan, and 197 million yuan, respectively, for the years 2023 to 2025, with the net profit margin plummeting from 9.3% to 2.1%. The company's attributable net profit for the full year 2025 was only 146 million yuan, a year-on-year decrease of 66.58%, and the non-recurring attributable net profit was only 25.78 million yuan, a drastic decrease of 92.96%. The significant decline in profits is the result of multiple factors. Firstly, the traditional business is under significant pressure: the intelligent home appliance control business was affected by factors such as the slowdown in air conditioning demand due to unusual weather in India, resulting in a 4.79% year-on-year decrease in revenue in 2025; the new energy transportation sector was dragged down by the intense competition in the domestic new energy vehicle industry, with the gross profit margin dropping from 21.0% in 2024 to 14.3%. Secondly, there is a continuous high level of research and development investment, with research and development expenses reaching 1.122 billion yuan in 2025, an increase of 14.05% year-on-year, accounting for a high proportion of 11.94% of revenue. It is worth noting that Shenzhen Megmeet Electrical recently completed a targeted issuance of shares, raising over 2.6 billion yuan, with the proceeds aimed at research and development efforts in new businesses such as AI data center power and the expansion of overseas production capacity. However, at least from the current financial reports, the continued investment in new businesses by Shenzhen Megmeet Electrical is unlikely to fully profit contributions in the short term, while the sustained high increase in research and development expenses and the upfront costs of expanding into overseas markets are concentrated in the current period. In my opinion, the company's strategic choice in the current strategic window period is to exchange short-term profits for long-term positioning, facing a phased test between "long-term investment in new businesses" and "pressure on current profits". Market expectations are high, but realizing profits will take time As a star stock that touches on multiple hot topics, Shenzhen Megmeet Electrical's A shares have experienced a magnificent revaluation since 2024. Behind the rising stock price, there is actually a strong market expectation for Shenzhen Megmeet Electrical's transformation from a traditional power manufacturer to a leading player in AI server power supply. From a positive perspective, the AI power industry has entered a period of rapid growth. According to estimates, the market size of AI server power module is expected to reach 7.4 billion, 15 billion, and 32.5 billion US dollars in the years 2025 to 2027, with a high compound annual growth rate of 110%. The power consumption of a single cabinet has soared from the traditional 20-30kW to over 100kW, and is expected to exceed 300kW in 2026; power module power has also evolved from the first generation of 5.5kW to 12kW and even higher. According to Zhukshi Consulting data, the global data center power market is expected to reach 429.5 billion yuan by 2030, indicating a vast market space. Focusing on Shenzhen Megmeet Electrical itself, the company's AI power business is moving from research and development reserves to substantial growth. In April of this year, the company disclosed that it has successfully obtained a large order for NVIDIA's GB300 power products, with related performance contributions reflected in the first quarter of 2026; for the next-generation Vera Rubin power products, the products have started in-depth project integration and testing with several leading cloud providers in North America. Currently, Shenzhen Megmeet Electrical has become one of the designated data center recommended suppliers for NVIDIA, and the only power supplier for NVIDIA in mainland China. The company has established an integrated power supply solution covering "modules, racks, and cabinets," which can cover kilowatt to megawatt-level AI power demand, and is actively deploying next-generation power architectures such as 800V HVDC and SST. Institutional forecasts predict that the company's share of AI server power in NVIDIA's cabinets in 2026 can exceed 10%. However, the flip side of the coin is also worth paying attention to. Firstly, there is still uncertainty in the pace of the large-scale deployment of AI power. NVIDIA's GPU platform iterates quickly, and the power module needs to be continuously upgraded accordingly, with the risk of changes in technology routes always present. The more realistic challenge lies in the fact that Shenzhen Megmeet Electrical's non-recurring net profit in the first quarter of this year still decreased by 56.23% year-on-year, indicating that the profit contribution of new businesses has not yet been able to cover the cost pressure brought by high-intensity investment. Secondly, the risk of customer concentration cannot be ignored. The company's AI power business is deeply tied to NVIDIA's supply chain, and any adjustments in customer order allocation strategy or increased market competition will have a significant impact on performance. Standing at the forefront of the era of AI computing infrastructure power supply, Shenzhen Megmeet Electrical has established an initial advantage through technological positioning and product matrix. The landing of the GB300 large order signifies that the AI power business is gradually entering a phase of realization. However, the gap between high valuation and profit realization, the real pressure on operating cash flow, and the more cautious pricing logic in the Hong Kong stock market all pose challenges that cannot be ignored. As for whether the company's journey on the Hong Kong stock market will be smooth in the future, GMTEight will also keep a close eye on it.