Goldman Sachs on Envicool Technology (002837): AI Robotics & Power Field Trip Takeaways – QoQ Liquid Cooling Ramp in 1-4Q26
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Goldman Sachs reiterates a Buy rating on Shenzhen Envicool Technology (002837.SZ) with a 12-month target price of RMB 121.10, offering 18.3% upside from the current price of RMB 102.39. Following a recent field trip, management indicated that 2026 sales growth should exceed the company's historical 30% annual target, supported by a critical inflection point in mass production for server cooling products. This ensures clear quarter-over-quarter revenue scaling from the first to the fourth quarter of 2026.
Three core pillars underpin this accelerated growth trajectory. First, the company has achieved breakthroughs within the ASIC supply chain, highlighted by a 2MW coolant distribution unit designed for Google's Project Deschutes 5, expected to generate substantial revenue by the second half of 2026. Second, Envicool is deepening its penetration within the Nvidia ecosystem by expanding its quick-disconnect fitting production capacity twentyfold, with new facilities in China and Thailand operational by the end of the first quarter. Third, energy storage cooling sales are set to accelerate, driven by international demand and a significant expansion in content value per unit.
Despite short-term commodity pricing pressures from copper, the increasing proportion of higher-margin overseas revenue should drive overall margin improvement. Goldman Sachs forecasts an impressive 98% compound annual growth rate for server cooling sales between 2025 and 2030, with total earnings growing at a 58% CAGR over the same period.