Cathay Pacific Haitong: Intelligent computing drives transformation, the data center industry ushered in a new golden period of development

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that if you refer to the capital expenditure plans of Byte, Alibaba-W (09988), and Tencent Holdings (00700) and judging the boom in AI investment, it is expected that the capital expenditure of leading domestic Internet manufacturers will remain high for the next three years, which is expected to bring at least 7 GW of additional IT power demand, while the existing third-party IDC reserves are less than 5GW. This provides a broad development space for related enterprises. Therefore, we recommend: Aofei Data (300738.SZ), Guanghuan New Network (300383.SZ), Data Port (603881.SH), and it is recommended to focus on: Runze Technology (300442.SZ).

Cathay Pacific Haitong's main views are as follows:

From the demand side, AI has become the core driving force for large-scale growth in computing power

According to the “Comprehensive Computing Power Evaluation Report” of the China Academy of Information and Communication Technology, the total global computing power reached 910EFLOPS (FP32) by the end of 2023. The scale of intelligent computing in China increased by more than 70% year on year, and the growth momentum is strong. Global data center core IT power demand is expected to increase from 49 GW in 2023 to 96 GW in 2026, with electricity demand driven by new intelligent computing centers accounting for 85% of the increase. Overseas cloud vendors, such as Amazon, Google, META, and Microsoft, will continue to increase in 2025Q1 capital support, and maintain optimistic expectations for the whole of 2025. Large amounts of capital will be invested in AI and technology upgrades. Domestic Internet vendors have also entered a period of accelerated investment in AI. Giants such as Alibaba and Tencent have increased their investment in cloud business and AI infrastructure. The number of users of ByteDance's products has increased dramatically, and the potential for capital expenditure is huge. At the same time, operators' capital expenditure on computing power continues to grow.

In terms of order size, ByteDance is leading the growth in demand for large bases

In 2024, the number of projects under construction at the China Intelligent Computing Center grew rapidly, with more than 500 projects at different stages of construction across the country. Third-party IDC orders are about 2.5 GW, of which ByteDance's demand is about 2 GW. The development of intelligent computing is driving data centers towards high density and high energy efficiency. The global average rack power continues to rise, and domestic Ulanqab and overseas Southeast Asia have become hot spots for data center development. Since 2013, Ulanqab has vigorously developed the big data industry, with over 1.1 million rack contracts and impressive computing power operations; the Southeast Asian data center market has exploded, and the “SJB Corridor” is expected to become one of the world's largest data center markets, and Johor has attracted many international giants with its advantages.

Judging from the market environment, supply and demand are recovering and prices are stabilizing. As demand continues to grow, price increases can be expected

The domestic data center market underwent early adjustments, the supply and demand structure was gradually optimized, and prices stabilized. Overseas data centers have shown a trend of rising prices. As AI's demand for intelligent computing data centers increases, supply and demand in the global data center market will be further balanced, and rental prices are expected to rise.

Risk warning: Risk of trade friction between China and the US, government and industry investment progress is lower than expected, and industry demand is lower than expected.