Analysis of the Sustainability of Growth in Yinlun Co., Ltd.'s Liquid Cooling Business

According to public information, Yinlun Co., Ltd.'s liquid cooling business has indeed shown a strong growth trend. In 2024, the company’s digital energy business revenue was 1.027 billion yuan, a year-on-year increase of 47.44%, accounting for 8.08% of total revenue [1][2]. The liquid cooling business grew by 58.94% year-on-year, mainly driven by breakthrough applications in data centers, energy storage, ultra-fast charging and other fields [2].

• Rapid Growth of Market Size
  : According to IDC data, the Chinese liquid cooling server market size reached 2.37 billion US dollars in 2024, a year-on-year increase of 67%, and it is expected to have a compound annual growth rate (CAGR) of 46.8% from 2024 to 2029, exceeding 16.2 billion US dollars in 2029 [1]
• Accelerated Penetration Rate
  : The penetration rate of liquid cooling data centers among the three major operators jumped from 14% to 26% in 2025, and order scheduling has been extended to 2026 [1]
• Broad Prospects for Global Market
  : From 2025 to 2030, the global data center liquid cooling market size is expected to rise from 3 billion US dollars to nearly 8 billion US dollars, with a CAGR of over 20% [1]

• Deep Technical Accumulation
  : Relying on automotive-grade thermal management technology, the company directly applies its core capabilities of “leak-proof, high adaptability, and strong stability” to data center scenarios [2]
• Complete Product Layout
  : It has formed a liquid cooling product layout covering the inside and outside of server cabinets, including megawatt-level immersion integrated liquid cooling equipment, cooling towers, CDU core heat exchangers, etc. [1][2]
• Rich Customer Resources
  : It has initially formed a “3+3+N” customer layout and established cooperation with multiple data center solution providers [1]

####3. Sufficient Handheld Orders

• In 2024, the company’s digital energy business added 950 million yuan in new annualized orders
• 640 million yuan in new annualized orders in the first half of 2025 [2]
• In August 2024, it successfully won an order for 108 sets of liquid cooling heat dissipation systems for computing centers, and added 193 sets of orders in December [2]

####1. Intensified Market Competition
The liquid cooling industry has relatively high technical barriers, but as the market size expands, more competitors may enter, putting pressure on gross profit margins. The gross profit margin of the company’s passenger car business decreased by 1.75 percentage points year-on-year in the first half of 2025 [1]

####2. Downstream Customer Concentration
Although the new project approval of the digital energy segment has a high growth rate, customer concentration may bring the risk of order fluctuations

####3. Raw Material Price Fluctuations
Fluctuations in raw material prices for thermal management products may affect profitability and gross profit margin levels

, for the following reasons:

1. Industry β Upward
   : The explosion of AI computing power demand has driven the acceleration of data center construction, the increase in liquid cooling penetration is a deterministic trend, and the company is in a high-quality track

2. Company α Significant
   :
   • Leading Technology: It has accumulated automotive-grade thermal management experience and has a first-mover advantage in the liquid cooling field [2]
   • Production Capacity Layout: It has a complete global localized production network in North America, Europe, and Southeast Asia
   • New Product Iteration: It is developing cutting-edge applications such as thermal management for humanoid robots

3. High Order Visibility
   : Handheld annualized orders continue to break through, with a total of 1.6 billion yuan in new orders from 2024 to H1 2025, supporting future revenue growth [2]

Many institutions are generally optimistic about the development prospects of Yinlun Co., Ltd.'s liquid cooling business. Pacific Securities believes that the large-scale application of liquid cooling technology will drive the company’s third curve business into a high-growth period [2]; Minsheng Securities expects the digital energy business to achieve volume growth soon [2].

The company expects its revenue from 2025 to 2027 to be 15.8/18.7/21.5 billion yuan respectively, and its net profit attributable to parent company to be 1.07/1.33/1.65 billion yuan respectively [1], corresponding to PE ratios of 31/25/20 times respectively. As a thermal management leader, Yinlun Co., Ltd. is expected to fully benefit from the wave of AI computing power and new energy development, and the high growth of its liquid cooling business has good sustainability.

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[1] Full Text of the 2025 Semi-Annual Report of Zhejiang Yinlun Machinery Co., Ltd. (http://static.cninfo.com.cn/finalpage/2025-08-27/1224580484.PDF)
[2] NVIDIA GB300 Sparks New Battle in Liquid Cooling: How Does Yinlun Co., Ltd. Seize the Opportunity? (https://www.donews.com/article/detail/7331/92341.html)
[3] Pacific Securities: Yinlun Co., Ltd. Driven by Liquid Cooling + Humanoid Robots for Sustained Growth (https://pdf.dfcfw.com/pdf/H3_AP202509011737549999_1.pdf)