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

Yesterday, the three major indices showed mixed results, with the ChiNext Index and the Innovation Index both dropping over 1%. The trading volume in the Shanghai and Shenzhen markets reached 1.96 trillion yuan, an increase of 14.3 billion yuan compared to the previous trading day. From a sector perspective, the agricultural sector remained actively volatile, the fertilizer sector saw unusual gains, the non-ferrous metals and copper concept sectors performed actively, the media sector continued its strong performance, and the oil and gas sector experienced a rebound. By the close, the Shanghai Composite Index rose by 0.2%, while the Shenzhen Component Index fell by 0.52%, and the ChiNext Index fell by 1.15%. China Securities Co., Ltd. believes in the ongoing value of liquid cooling sector allocations; CITIC SEC states that the Tao Law has moved from a theoretical framework into the product stage, paying attention to the domestic wafer manufacturing, semiconductor equipment, and testing industry chain; Galaxy Securities believes that the self-sufficiency rate of domestic optical chips is accelerating its breakthrough. China Securities Co., Ltd.: Continue to be optimistic about the value of liquid cooling sector allocations China Securities Co., Ltd. believes that the liquid cooling industry will see concentrated growth in 2026, with high-performance servers domestically and internationally simultaneously adopting full liquid cooling solutions, and continuous release of orders for core components in niche areas; the iteration of high-power AI chips in the future will continue to reinforce the rigid demand for liquid cooling, while domestic manufacturers will continuously tackle precision processing and long-lasting sealing processes, gradually realizing autonomous control over all core components of liquid cooling, deeply benefiting from the expansion of global computing power. In terms of industry judgment, commercial performance is expected to show a low first half followed by a high second half in 2026, and in 2027, it will enter a profit release phase driven by the annualization of Rubin orders, increased domestic market share, and product structure upgrades, maintaining optimism about the value of liquid cooling sector allocations. CITIC SEC: The Tao Law has moved from a theoretical framework into the product stage, focusing on domestic wafer manufacturing, semiconductor equipment, and testing industry chain The Tao Law has now transitioned from a theoretical framework into the product phase. On September 4, Huawei's semiconductor head He Tingbo published a follow-up paper on the Tao Law, specifically addressing the power consumption and heat dissipation issues of 3D stacked chips; on September 7, Huawei released the Mate XT2 ULTIMATE DESIGN, which debuted with the Kirin 9050 Pro, featuring over a 42% improvement in overall performance compared to the previous generation. We believe that the Kirin 9050 Pro has become the first product validation window for the Tao Law. LogicFolding will increase demand for multi-layer active wafer manufacturing and wafer-level hybrid bonding, driving upgrades in CMP, cleaning, deposition, etching, measurement, and testing processes, suggesting that attention should be focused on the domestic wafer manufacturing, semiconductor equipment, and testing industry chain. Galaxy Securities: The self-sufficiency rate of domestic optical chips is accelerating its breakthrough Galaxy Securities states that supply and demand are tightly balanced, with the rate and optoelectronics fusion accelerating its evolution. Currently, the optical communication industry shows a tight balance with high-end products in short supply. Three significant changes have emerged in the industry: first, the rate evolution has exceeded expectations, with the 1.6T optical module entering its commercial year and starting large-scale shipments, while single-wavelength 400G and 3.2T/6.4T advanced solutions are being unveiled, making the combined market scale of 800G and 1.6T expected to account for a significant proportion of the overall market; second, the interconnection architecture is accelerating its evolution towards "optoelectronic fusion" to address power consumption and signal integrity bottlenecks at high rates, with NPO solutions pushing optical engines closer to switching chip sides, and CPO technology gradually moving from laboratory validation to small batch delivery; third, the intrinsic value of underlying core devices is becoming apparent, and with the advancement of 3.2T and NPO/CPO, the significance of upstream components such as DFB, EML active chips, and precision coupling components is simultaneously rising, with the self-sufficiency rate of domestic optical chips breaking through. This article is reproduced from "Caixin", edited by GMTEight: Xu Wenqiang.