Pacific: Gives Co-creation Data a Buy rating

Pacific Securities Co., Ltd. recently conducted research on Xiechuan Data and published a research report titled “Computing Power Business Becomes Core Growth Engine, Investment Rhythm Accelerates,” giving Xiechuan Data a buy rating.

Xiechuan Data (300857)

Event: Xiechuan Data released its 2025 annual report. The company achieved operating income of 12.236 billion yuan, a year-on-year increase of 65.13%; net profit attributable to shareholders was 1.164 billion yuan, a year-on-year increase of 68.32%; and the net profit excluding non-recurring items was 1.135 billion yuan, a year-on-year increase of 69.07%.

The computing power business has become the core growth engine. In addition to traditional IoT business, the company’s various businesses achieved rapid growth, and gross profit margins significantly improved: 1) Intelligent computing power products and services: achieved revenue of 2.761 billion yuan, year-on-year +1727.17%, gross margin of 25.53%, year-on-year +4.25%; 2) Data storage devices: achieved revenue of 4.493 billion yuan, year-on-year +28.31%, gross margin of 14.89%, year-on-year +3.86%; 3) Server and peripheral remanufacturing: achieved revenue of 2.575 billion yuan, year-on-year +169.25%, gross margin of 15.02%, year-on-year +5.79%; 4) IoT intelligent terminals: achieved revenue of 1.572 billion yuan, year-on-year decrease of 30.42%, gross margin of 27.65%, year-on-year -4.38%.

Asset scale rapidly increased, and the computing power business significantly improved cash flow. By the end of 2025, total assets surged to 23.798 billion yuan, of which fixed assets and construction in progress totaled 12.630 billion yuan, primarily for the procurement of computing power service-related equipment. In 2025, the company’s net operating cash flow reached 1.100 billion yuan, year-on-year +1011.23%, of which the net cash flow from operating activities in Q4 2025 was 2.474 billion yuan, mainly driven by significant growth in collections due to the expansion of the intelligent computing power business.

Capital expenditures in computing power remain high, and the investment rhythm is accelerating. As a partner of NVIDIA’s Cloud Partner Program (NCP), the company is qualified to cooperate with NVIDIA in the fields of AI computing power leasing and cloud services. The company has deployed and operated computing power centers in multiple locations including Beijing, Shanghai, Ulanqab, Langfang, Zhongwei, Guangzhou, Shenzhen, and Ningbo to provide customers with cloud computing leasing services based on high-end computing power. It primarily serves leading internet companies in model training and inference, autonomous driving, biomedicine, and other fields. In 2025, the cumulative amount of computing server procurement announcements issued by the company did not exceed 21.2 billion yuan. In February 2026, the company announced a procurement contract for computing servers, with a procurement amount not exceeding 11 billion yuan, indicating an accelerated investment rhythm throughout the year.

Investment Recommendation: Against the backdrop of rapid penetration of AI agents, the demand for computing power continues to grow. Cloud vendors such as Alibaba Cloud and Baidu Cloud have announced price increases. It is expected that cloud services and computing power leasing will remain in high demand, and the company’s strong layout in the computing power field is expected to significantly enhance profits. It is estimated that the company’s net profit attributable to shareholders for 2026-2028 will be 2.084 billion / 2.975 billion / 3.949 billion yuan, maintaining a “buy” rating.

Risk Warning: Computing power demand may fall short of expectations, market competition intensifies, and supply chain volatility risks.

The latest profit forecast details are as follows:

In the last 90 days, three institutions have given ratings for this stock, all with buy ratings; the average target price from institutions in the past 90 days is 299.88.

The above content is compiled by Securities Star based on public information and generated by AI algorithms (Internet Information Record No. 310104345710301240019), and does not constitute investment advice.