AI Data Center Power Equipment: Overseas Expansion and Prefabrication Are Key

Overview

This report summarizes Goldman Sachs’ 2026 AIDC+Power Virtual Corporate Day, capturing the latest operational feedback from six Chinese data center electrical supply chain companies. Core conclusions: AI-driven demand for data center power equipment remains robust; technical architecture is transitioning gradually from traditional AC UPS toward 800V DC and solid-state transformers (SST); industry competition has intensified, and profitability diverges markedly across domestic and overseas markets; manufacturers with overseas channel advantages and prefabricated product capabilities demonstrate greater resilience. Among covered names, Goldman Sachs assigns a Buy rating to Kehua Data (002518.SZ), and maintains Neutral ratings on Kehua Data (002335.SZ) and Megmeet (002851.SZ).

Core views

Technology Evolution and Demand Timing: Traditional UPS demand has not weakened despite emerging technologies. Large-power (500–600kW+) UPS orders in North America remain strong, with backlogs at several global suppliers extending to 2028. Meanwhile, 800V DC architecture and SST are viewed as the ultimate solution for ultra-high-power racks, but most vendors remain in sample validation or small-batch shipment phases in 2026. Widespread commercialization of SST faces challenges including long-term reliability validation and core component supply constraints, and meaningful volume ramp-up is not expected until 2027 or later. Some industry participants forecast SST penetration in North America could reach 30%–40% by 2030, corresponding to a market size exceeding RMB 10 billion—though this remains subject to multi-year execution. Competitive Landscape and Business Model Shifts: Since 2025, numerous new entrants with adjacent power electronics expertise (e.g., energy storage PCS, server PSUs, EV chargers) have entered the 800V/SST space, intensifying competition. To mitigate geopolitical risks and stringent AVL (Approved Vendor List) requirements, multiple domestic vendors—not only engaging directly with North American chipmakers or cloud service providers, but also actively partnering with global power distribution giants via ODM models—to fill capacity gaps or accelerate next-generation product iteration. This 'ship-on-board' overseas strategy is becoming an industry norm. Prefabrication Trend and Overseas Premium: Addressing pain points of lengthy construction cycles and high on-site installation costs in overseas projects (especially North America and Southeast Asia), prefabricated and modular power solutions are gaining rapid adoption. Leading vendors’ containerized integrated solutions—pre-assembling transformers, medium-voltage switchgear, UPS/HVDC units at factory—shorten delivery timelines and lift value per watt to roughly three times that of standalone UPS systems, thereby enhancing overall profitability. By contrast, although the domestic market benefits from improved GPU/ASIC supply driving construction recovery, strong cloud provider bargaining power and elevated raw material costs have kept pricing flat or compressed margins. As a result, leading players adopt a 'defensive expansion' strategy: selectively pursuing high-quality domestic orders to preserve cash flow while shifting growth focus to higher-margin overseas markets. Divergent Stock Views: Kehua Data (002518.SZ) receives a Buy rating due to its high overseas revenue share, strong visibility on large-power UPS ODM orders across Europe, Southeast Asia, and North America, and smooth progress on its 2.4MW prefabricated cabin and 800V new products—effectively insulating it from domestic price wars. Kehua Data (002335.SZ) maintains a Neutral rating: although it expects billion-RMB-level order growth in Southeast Asia, its core domestic business continues facing margin pressure, and substantive breakthroughs in North America remain unlikely in the near term. Megmeet (002851.SZ) likewise maintains a Neutral rating: though successfully embedded in the global AI server PSU supply chain, its current valuation already fully reflects high-growth expectations, resulting in a balanced risk-reward profile.

Analysis framework

The report draws on direct management feedback gathered during the virtual corporate day involving six supply-chain companies, applying a bottom-up industrial verification approach. Its analytical framework centers on four dimensions: (i) timing of technology generational shift (real-world progress of 800V/SST from lab to commercial deployment); (ii) dynamic evolution of competitive structure (impact of new entrants and rise of ODM models); (iii) impact of product form innovation on profitability (how prefabrication enhances value-added); and (iv) structural differences across regional markets (root causes and responses to overseas-domestic margin divergence). By cross-validating first-hand management insights with broader industry trends, the report identifies firms best positioned to sustain growth certainty amid technological transition and intense competition—and accordingly delivers differentiated ratings.

Methodology notes

• Industry/Industrial Analysis FrameworkS-Curve of Technology Adoption

  New technologies (800V/SST) are in the early validation stage of the S-curve; commercial inflection depends more on reliability validation than on mere production capacity

  The report notes that while 800V/SST holds significant promise, it remains in sampling or small-batch stages in 2026, with large-scale commercialization not anticipated until post-2027. This exemplifies S-curve analysis: during the introduction phase, technical bottlenecks (e.g., long-term reliability) govern adoption speed more than manufacturing scale—investors must distinguish between 'conceptual hype' and actual volume ramp timing.

• Competition & Strategy FrameworkValue chain analysis

  Prefabricated products increase value per watt by integrating more equipment layers, transforming the traditional single-device sales model

  The report highlights that prefabricated cabin solutions can lift value per watt to ~3x that of standalone UPS systems. This represents classic value chain extension: firms shift from selling discrete components to delivering integrated solutions—capturing higher margins by assuming greater assembly and testing responsibilities, while simultaneously solving key customer pain points (e.g., schedule compression), creating win-win outcomes.

• Company Fundamentals & Financial FrameworkProfit Quality Analysis

  Domestic-overseas margin divergence reflects differing pricing power and competitive intensity across markets

  The report stresses that overseas markets permit 'cost-plus' pricing to absorb inflationary pressures, whereas domestic margins are suppressed by dominant cloud providers’ negotiation leverage. This underscores that investors should look beyond top-line growth: revenue mix matters—firms with higher overseas revenue shares tend to exhibit superior profit quality and cyclical resilience, even at comparable scale.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Kehua Data (002518.SZ)

  Beneficiary: High visibility on overseas ODM orders; smooth rollout of new products (2.4MW prefabricated cabin, 800V) effectively hedges against domestic price competition

  Strengths

  High overseas revenue share; clearly defined large-customer orders across Europe, Southeast Asia, and North America; flexible 'colo+ODM' dual model circumvents AVL restrictions; #1 domestic UPS shipment volume for 20 consecutive years

  Comparison

  Faster overseas expansion progress and superior product mix versus Kehua Data

  Risks

  Slower-than-expected growth in U.S. ODM orders; delays in 800V new product launch; weak recovery in overseas energy storage business

• Kehua Data (002335.SZ)

  Neutral: Domestic data center capex rebound is supportive, but core profits remain pressured and North American expansion lacks near-term catalysts

  Strengths

  Domestic UPS leader with deep ties to top-tier customers such as Alibaba and Tencent; potential for billion-RMB-level new orders in Southeast Asia

  Weaknesses

  Domestic gross margins constrained by cloud providers’ pricing power; low probability of substantive North American progress within 2026

  Comparison

  Slower overseas deployment and weaker domestic profit elasticity versus Kehua Data

  Risks

  Overseas (especially U.S.) expansion lags expectations; domestic hyperscaler capex falls short; domestic product price competition intensifies

• Megmeet (002851.SZ)

  Neutral: AI server PSU growth expectations are already fully priced in; upside hinges on market share gains or accelerated 800V validation

  Strengths

  Embedded in NVIDIA MGX ecosystem; 5.5kW PSU secured mass-production orders for GB200/GB300; R&D capabilities validated by international Tier-1 OEMs

  Weaknesses

  Efficiency and product portfolio still lag behind industry leaders like Delta; rising uncertainty from intensifying 800V/SST competition

  Comparison

  Automation business provides a stable base, but lower AI PSU purity versus pure-play data center power vendors

  Risks

  Slower-than-expected share gain within NVIDIA ecosystem; ASIC hardware stack validation delays; subpar yield execution in mass production; extended 800V R&D timeline

Key data

• North American Traditional UPS Order BacklogThrough 2028Backlog data from select global suppliers indicates continued strength in traditional AC UPS demand
• Projected SST Market Size (2030E)>RMB 10 billionBased on assumed 30%–40% penetration and unit price of RMB 3–4/W
• Jinko Tech Q1 2026 Data Center Power Order Growth+278% YoYTotal orders exceed RMB 1.7 billion, with ~RMB 1.5 billion from overseas (primarily North America)
• Kehua Data 2026 Southeast Asia Order Increment Expectation>RMB 100 millionDriven mainly by local expansions of China’s hyperscale cloud providers
• Prefabricated Cabin vs. Standalone UPS Value per Watt Multiple~3xIntegrated solutions significantly elevate unit value content

Impact & implications

For the data center power equipment industry, the era of relying solely on domestic incremental growth is ending. Core competitiveness is now shifting toward 'global delivery capability + technical solution integration depth.' Firms that establish compliant overseas channels early and enhance value-add through innovations like prefabrication will capture outsized returns amid industry consolidation. Conversely, vendors focused exclusively on competing on standardized domestic products may face persistent margin pressure. Technically, while 800V/SST represents the long-term direction, traditional UPS and HVDC remain cash cows in the near term; companies must balance forward-looking R&D investment against sustaining current profitability.

Risks

• U.S. ODM orders grow slower than expected
• Delays in launch or validation of new products (e.g., 800V DC)
• Overseas energy storage business recovery and margin improvement fall short of expectations
• Domestic cloud provider capex falls short of expectations
• Price competition intensifies for domestic data center and energy storage products
• Market share gains in AI server PSUs occur slower than expected
• Next-generation 800V R&D cycle extends
• Global AI capex sustainability remains uncertain

What to watch

• Commercialization progress and customer validation feedback for 800V/SST products across companies in H2 2026
• New large-power UPS order wins by European and Taiwan-based customers in Q2–Q3 2026
• Actual demand pull-through from improved GPU/ASIC supply on domestic data center construction
• Tender awards and delivery performance of prefabricated products in Southeast Asian and North American projects
• Megmeet’s mass-production yield and next-gen product R&D progress within the NVIDIA ecosystem