Based on the wind power industry, develop a new growth pole of AI computing power. 1) founded in 2003, after 20 years of accumulation, the company has developed into a precision machinery manufacturer providing one-stop services for design, forging and finishing, specifically covering wind power flanges, wind power bearings, gas turbine components and other products.

2) on July 29, 2023, the company announced that it planned to sign a "joint venture contract" with Shanghai Liuzhi Technology Group Co., Ltd., and jointly funded the establishment of Liuchu Hengrun Intelligence (Shanghai) Co., Ltd., which plans to set up a computing center in Shanghai, Fuzhou Economic Development Zone, Wuhu, Anhui, and Jining, Shandong, and to build a cluster of GPU computing centers in the Yangtze River Delta. The company holds 51% of the shares and officially enters the intelligent computing leasing track. 3) from the background, the controlling shareholder of the company is the State-owned assets Supervision and Administration Commission of Jining, which has the natural advantages of state-owned enterprises in stable operation and raising funds, which also lays a solid foundation for the company to carry out intelligent calculation center investment.

AIGC superimposes the tide of digital economy, and intelligent computing power has become an important base for development. 1) in recent years, the digital economy has become a national strategic planning, and the "calculation of the East and the West" project launched in February 2022 is the infrastructure for the development of the digital economy, with an investment of more than 400 billion yuan by September 2022. Eight computing hub nodes will be built nationwide in the future, among which, according to the instructions of the Ministry of Industry and Information Technology, intelligent computing meets the requirements of the development of new technologies, new scenarios and new applications, and the penetration rate will reach 35% in 2025. 2) the launch of ChatGPT means that generative artificial intelligence has broken through the technical singularity. Internet companies, cloud computing providers and enterprise customers are all eager to apply generative AI to their own business. AIGC may trigger a new round of intelligent computing demand. On the training side, the GPT3.5 model of the same level needs thousands of H100s, GPT4 or tens of thousands of A100s, GPT5 or tens of thousands of H100s. Model training shows rigid demand for large-scale computing clusters. On the reasoning side, only text Q & A scenarios are considered, requiring tens of thousands of H100s and billions of dollars in corresponding computing; multimodal may have more improvements. 3) We believe that intelligent computing power is the basic soil of digital economy and AIGC, and the downstream demand is expected to be released at a high speed, while clustering, intelligence and greening have become an important trend of computing power center.

Master the core computing chip resources, the landing speed is expected to continue to exceed expectations. 1) the major science and technology enterprises at home and abroad are vigorously involved in the development of the big model, but restricted by the CoWOS production capacity of Taiwan Semiconductor Manufacturing Co Ltd and other contract factories, NVIDIA Corp is temporarily unable to meet the upsurge procurement demand downstream. At this time, the market is the supplier market, and the card-taking ability has become one of the core competitiveness of math manufacturers. 2) take Coreweave as an example, the close cooperation with NVIDIA Corp may significantly determine the ability of the channel to get the card. Six feet Technology, the main partner of the company's computing business, has rich experience in AI smart computing, and maintains in-depth cooperation with NVIDIA Corp, Xinhua, etc., or can copy the growth path of Coreweave. 3) judging from the current construction results, the company has taken the lead in running through the whole chain of computing leasing, and the Wuhu Intelligence Center has completed the first phase of 1000p delivery, with a delivery cycle of only 50 days, which not only verifies the company's card-taking ability, but also proves that the company has perfect capabilities in cluster components, networking operation and maintenance. As one of the eight nodes of "East and West calculation", Wuhu Intelligence Center aims to provide more than 4000p computing power, with a planned investment of 8 billion yuan and a broad space. At the same time, the joint venture company run six feet has signed contracts with Zhisu, Baidu, Inc. and other large model manufacturers, customer demand is expected to continue to release. 4) on September 25, 2023, the company issued the announcement on signing the Supplementary Agreement on Joint Venture contracts and related transactions. It is pointed out that the six-foot performance goals of Shanghai Resources include: the calculation power required for the training and reasoning of the large model in 2024 is not less than 70% in Wuhu, Shanghai, Fuzhou and other places, and the non-net profit deducted by the mother is not less than 200 million yuan; in the manual computing server, the shelf rate is not less than 80%. The profit margin of lease orders is not less than 30%. The proportion of medium-and long-term orders for more than 6 months is not less than 50%, which strongly demonstrates the company's confidence in development.

Wind power may meet the warming cycle, the company's capacity expansion is about to be completed. 1) the long-term goal of carbon peak and carbon neutralization put forward by the country has brought broad opportunities for the development of wind power new energy industry. The large-scale development of the domestic wind power industry has been more than ten years. With the approaching of the 20-year service life of wind turbines, there will be a large number of decommissioned units in China, driving the demand for upgrading of the industry. According to the ERI analysis data of the Energy Research Institute, it is estimated that the cumulative decommissioning of wind power units in China will exceed 1.2 million kilowatts during the 14th five-year Plan, and the national demand for renovated units will exceed 2000 kilowatts. 2) in order to cope with the development of the wind power industry, the company conducted a non-public offering to raise 1.474 billion yuan in 2021 and started three capacity expansion projects, which are expected to be completed and landed by the end of this year.

Optimistic about the company's performance under the promotion of AI intelligence and the pick-up of the wind power industry, it was upgraded to a "buy" rating. In terms of AI intelligent leasing, the company has the core advantages of the whole chain, such as card core channels, cluster network operation and maintenance, and rapid customer delivery, and is expected to fully benefit from the technological tide of AIGC and digital economy. At the same time, the superimposed wind power industry is expected to gradually pick up. We expect the company's operating income to be 29.28,55.05 and 8.178 billion yuan in 2023-2025. The net profit of home ownership was 2.92,5.53 and 787 million yuan, which was upgraded to the "buy" rating.

Risk tips: AI technology development is not as expected, government investment is not expected, the assumption is not in line with the actual situation risk, industry competition intensifies the risk, the economic downturn exceeds the expected risk.