China Data Centers: Guangdong HEC (600673.SS): Pivoting Into an Integrated AI Infrastructure Platform

We recently spoke with Guangdong HEC's (600673.SS, Not Covered) Head of IR. Together with the proposed move to take full control of Chindata, HEC is pivoting into an integrated AI infrastructure platform spanning data centers, GPUaaS, AI passive components and liquid-cooling solutions, from its traditional cash-generating businesses in refrigerants and electronic components and materials, by leveraging HEC's access to power and upstream manufacturing capabilities and Chindata's data center capacity and downstream customer relationships. For example, HEC has announced three 5-year GPUaaS contracts representing Rmb40bn+ of aggregate revenue, with all capacity to be deployed in Chindata's data centers. Key discussions involved the strategic rationale and latest progress of its data center pivot & Chindata acquisition, GPUaaS economics and financing, and growth outlook of its AI and traditional businesses. We believe the constructive outlook for the GPUaaS business and integration between