AI Liquid Cooling Boom Lifts Revenue, But Profits Lag at Five Leading Chinese Suppliers

Five leading Chinese liquid-cooling suppliers all posted year-on-year revenue growth in the first half, but only Tongfei Co. and Gree Altairnet reported net profit growth, while the other three saw profit declines or losses, according to Jiemian News. In revenue terms, Envicool led with 3.017 billion yuan, followed by Shenling Environment at 1.756 billion yuan; both still suffered the problem of rising revenue without rising profit. Envicool’s attributable net profit fell 14.32% in the first half, after dropping 81.97% in the first quarter, while Shenling Environment’s fell 64.07%. Envicool said orders were normal but it did not provide earnings guidance. Shenling Environment said profit was hit by delayed project revenue recognition, higher sales expenses from overseas expansion, increased R&D spending on liquid cooling and overseas new products, and weaker gross margin in its industrial special-equipment business; it also said goods shipped but not yet recognized as revenue rose by about 800 million yuan by the end of the period. Shuguang Numera posted the fastest revenue growth among the five, up 75.56%, but still recorded a 73 million yuan loss. It said cold-plate liquid-cooling revenue reached 209 million yuan, up 290.09%, but the product remains in an early market stage with intense competition and lower margins than immersion cooling. Its overall gross margin fell to 11.93%, down 7.56 percentage points, while operating costs rose 92.03%. Cash flow diverged sharply. Tongfei Co. generated 241 million yuan in operating cash flow, up 339.57%, and Envicool posted 62 million yuan of positive operating cash flow, up 126.45%. Shenling Environment recorded an operating cash outflow of 554 million yuan, while Shuguang Numera and Gree Altairnet posted net outflows of 242 million yuan and 26 million yuan, respectively. The industry’s growth is being driven by surging AI computing demand and policy support. China's National Development and Reform Commission and three other departments issued a green data-center action plan that calls for power usage effectiveness, or PUE, of no more than 1.25 for new and expanded large and super-large data centers by the end of 2025, and no higher than 1.2 for national hub-node projects. Research firm CCID Consulting said China's liquid-cooling data-center market reached 15.98 billion yuan in 2025, up 45.2%, and is expected to reach 47.04 billion yuan by 2028. CICC forecast that the global liquid-cooling market for intelligent computing centers will reach 114.7 billion yuan in 2026, up 273%.