As the global technology industry focuses on the critical transition of AI from "computing power accumulation" to "commercial deployment," the capital markets have already signaled the shift. The AI sector is currently in an upcycle driven by capital expenditure, with the expansion pace of major cloud providers' capital outlays serving as a key indicator of industry vitality. Within this trillion-dollar wave of infrastructure reconstruction, hardware has become the physical vessel for AI implementation, and its strategic value is being reassessed. On June 22, the precision component leader Lingyi Itech (01688) officially passed the Hong Kong Stock Exchange hearing, a timely milestone. This not only marks a crucial step in the global capital strategy of a benchmark Chinese intelligent manufacturing firm but also signifies deep market recognition of the core value within the AI hardware supply chain. In the grand vision of AI reshaping the world, Lingyi Itech is leveraging its profound expertise in precision manufacturing to become a key "connector" linking virtual intelligence with the physical world.
The AI Hardware Connector: Evolving from Precision Manufacturing to an Intelligent Platform
The competition in the AI industry has shifted from mere computing power accumulation to a contest of hardware deployment capabilities. The rise of on-device AI and physical AI imposes higher demands on high-precision functional components. In this transformation, Lingyi Itech's role has evolved from a leading precision manufacturer to a globally leading intelligent manufacturing platform for electronic devices. Its performance from 2023 to 2025 demonstrates robust and steady growth, providing solid financial validation for this strategic evolution. According to the prospectus, total revenue grew from RMB 34.154 billion in 2023 to RMB 44.260 billion in 2024, a year-on-year increase of 29.6%, and further climbed to RMB 51.429 billion in 2025, up 16.2% year-on-year. The compound annual growth rate over the three years reached 22.7%, indicating a sustained acceleration in scale expansion. The profit side also shows a clear recovery trend: net profit was RMB 2.014 billion in 2023, experienced a slight adjustment to RMB 1.761 billion in 2024 due to industry cyclicality and increased R&D investment, but rebounded sharply to RMB 2.327 billion in 2025, a 32.2% year-on-year increase, not only recovering lost ground but also setting a new historical high. The divergence in 2025, where profit growth of 32% outpaced revenue growth of 16%, validates the company's success in optimizing its profit structure through internal cost efficiency improvements and a higher proportion of high-value-added products, with significant operating leverage effects. This resilient and high-quality growth is rooted in its deep positioning in the on-device AI field. According to Frost & Sullivan data, Lingyi Itech ranks first in the global market for high-precision functional components for AI terminal devices, with a market share more than double the combined total of the second to fifth players. It also holds the third position in the global market for high-precision intelligent manufacturing platforms for AI terminal devices. This dominant position directly translates into high-quality business growth. In 2025, the company's AI hardware-related business generated revenue of approximately RMB 44.793 billion, accounting for over 87% of total revenue. Key segments like battery/power and thermal management, which form the mainstay of its on-device AI business, each achieved double-digit year-on-year growth. The thermal management business, in particular, benefits directly from the evolution of cooling solutions driven by increasing computing power in on-device AI chips—transitioning from traditional graphite sheets to ultra-thin vapor chambers (VC), and further to higher-value stainless steel/titanium alloy VC solutions, leading to simultaneous increases in product unit price and gross margin. The company's self-developed "Feather Copper Bionic Structure" nano-cooling technology has achieved mass production, with the construction of this technical barrier further solidifying profitability levels. In the foldable screen segment, a typical innovation in on-device AI hardware, the company's mass production of titanium alloy and carbon fiber support plates clearly signals that future growth drivers are shifting from "volume" expansion to "value" enhancement.
The Skeletal Framework for Physical AI: From Core Components to Complete ODM Manufacturing
Since Nvidia defined physical AI as the next trillion-dollar frontier for artificial intelligence, industry competition has shifted from virtual large language models to the deployment capability of physical hardware. Humanoid robots, as the optimal carrier for physical AI, face a commercialization bottleneck no longer in algorithm iteration but in achieving scaled mass production of precision hardware from components to complete machines. Lingyi Itech's role is precisely that of a "skeletal framework builder" for embodied intelligence, constructing its physical structure. The company has built its core competitiveness in embodied intelligence through a trinity strategy integrating core component R&D, hardware manufacturing, and scenario application. On the component front, the company self-develops joint modules and RV reducers, launching lightweight hollow wiring modules that cover the robot's entire motion unit. At the complete machine level, the company has established a matrix of four mass-production models—"Xingzhe," "Panshi," "Linglong," and "Aimas"—covering three major scenarios: commercial service, heavy-duty industrial, and precision manufacturing. In 2026, the Beijing Yizhuang Embodied Intelligence Super Factory officially commenced scaled production, with plans to achieve an annual capacity of 10,000 units in 2026 and 500,000 units by 2030, marking the formal establishment of a closed loop from core components to scaled ODM delivery of complete machines. Regarding customer development, the company has established strategic partnerships with several global leading embodied robotics firms. Public information indicates domestic partners include Zhiyuan Robotics, UBTech, and Honor—the company manufactures 159 core structural components for Honor's "Lightning" robot, which helped it sweep the top six positions in the Beijing Yizhuang Humanoid Robot Half Marathon. It also provides complete machine manufacturing and assembly testing for Zhiyuan Robotics, delivering 200 customized complete machines from its Chengdu base to Zhiyuan in May 2026. By the end of 2025, the company had completed hardware and assembly services for thousands of humanoid robot units. In essence, Lingyi Itech defines the physical boundaries of embodied intelligence with its hardware capabilities and drives humanoid robots from technical validation to commercial adoption through its mass-production closed loop, becoming an indispensable "skeletal framework builder" in the era of physical AI.
The Essential Enabler for Computing Infrastructure: Securing the AI Server Cooling Niche
Global cloud providers are directing capital expenditure towards energy efficiency with unprecedented intensity, leading to explosive growth in demand for cooling high-power AI servers. Microsoft's full-year capital expenditure for fiscal 2025 reached $88.2 billion, a year-on-year increase of 58.35%, and is expected to exceed $30 billion in the first quarter of fiscal 2026. Google raised its full-year 2025 capital expenditure to $85 billion, with further increases planned for 2026. Nvidia's Vera Rubin platform has announced the adoption of a 100% full liquid cooling solution, upgrading liquid cooling from an "optional" feature to a mandatory requirement for computing infrastructure. Lingyi Itech has secured a position in this essential market with its "full-stack cooling" capabilities, with a clear strategic positioning—to be the essential enabler for computing infrastructure. At the core cooling technology level, the company has developed a comprehensive product matrix covering both air cooling and liquid cooling. Its self-developed Multi-Axis Cavity cooling element (BigMAC) outperforms mainstream 3D vapor chambers in the 400W-1000W power range while offering cost advantages. The company's thermal management solutions are already in mass supply to one of the world's largest computing power leaders, and it is mass-producing cooling modules, liquid cooling modules, cold plates, air cooling modules, heat pipes, and vapor chambers for international clients like AMD. The acquisition of Lisanda was a key strategic move for Lingyi Itech to complete its computing industry chain closed loop. According to UBS forecasts, the global liquid cooling market will see a compound annual growth rate of 51% from 2026 to 2030. Proceeds from the Hong Kong listing will be focused on expanding liquid cooling production capacity and building overseas delivery centers. Leveraging a global network of 80 production bases, Lisanda has achieved mass production in Dongguan and Suzhou, with overseas bases in the Philippines and Vietnam under accelerated construction. Through the dual-drive strategy of "liquid cooling + power supply," Lingyi Itech has formed a closed loop in the server industry chain from cooling to power delivery, with its subsidiary Salcomp achieving scaled mass production and delivery of high-end CRPS power supplies. Amid the ongoing upcycle of capital expenditure in AI computing infrastructure, Lingyi Itech is continuously solidifying its role as the essential enabler with its rare supply chain qualifications and global delivery capabilities.
In summary, Lingyi Itech secures its moat in on-device AI precision manufacturing as a "connector," defines the hardware boundaries of physical AI as a "skeletal framework builder," and locks into the essential cooling needs of computing infrastructure as an "enabler"—three roles, three closed loops, collectively constituting its indispensable hub position in the AI hardware industry chain. As the AI industry shifts from computing power accumulation to commercial deployment, Lingyi Itech demonstrates to the capital markets, through solid performance growth, rare supply chain credentials, and forward-looking strategic positioning, the leapfrogging capability of Chinese intelligent manufacturing from follower to leader in the AI era. With the progress of its Hong Kong listing, this platform enterprise rooted in precision manufacturing is occupying an increasingly central strategic position on the global AI hardware map.