Shenling Environment Core Huawei Supplier Ushering in Liquid Cooling Explosive Growth
As AI chip heat density continues to surge, traditional air cooling can no longer meet high-power heat dissipation demands, making liquid cooling an essential infrastructure for modern computing centers. Among mainstream technical routes, cold-plate liquid cooling features low server transformation cost and mature commercial application, becoming the dominant industry solution. As a core Huawei supplier, Shenling Environment delivers integrated liquid cooling systems centered on high-performance server cabinet heat exchanger products, supporting stable heat dissipation for high-density AI computing cabinets.
Shenling Environment has made full layout in both cold-plate and immersion liquid cooling technologies. Different from single-component manufacturers, the company provides one-stop overall solutions covering precision air conditioners, cooling distribution units and liquid cooling modules. Its systematic data center PUE reduction solution effectively optimizes operational energy consumption, helping data centers achieve ultra-low PUE and meet green computing standards.
As the core hub of the liquid cooling system, the liquid liquid cooling CDU undertakes key heat exchange, flow distribution and temperature regulation tasks. It realizes efficient heat transfer between the cold source water circuit and cabinet cooling circuit, precisely controlling the overall operating status of the liquid cooling system and serving as the core scheduling "heart" of data center thermal management.
According to CCID Consulting industry reports, Shenling’s CDU products rank first in domestic market share in the liquid cooling track. The company deeply participates in Huawei CloudMatrix super-node architecture design and joint debugging. Its customized data center cooling CDU perfectly matches the tight-coupling computing cluster composed of Ascend chips, realizing systematic adaptation of heat dissipation, power supply and network architecture.
Benefiting from in-depth customized R&D capabilities, Shenling has become one of Huawei’s long-term core liquid cooling suppliers. The system-level joint design and parameter adaptation form strong customer stickiness and high replacement barriers. As a professional and trustworthy liquid cooling CDU supplier, the company has locked core head customers and established stable long-term cooperative relationships.
Rooted in decades of industrial air-conditioning customization experience, Shenling excels in tailored design and full-cycle project delivery. The independently developed high-stability liquid cooling distribution unit adapts to complex industrial and data center scenarios, supporting iterative upgrading of diverse liquid cooling systems and maintaining leading stability and compatibility in full-scenario heat dissipation.
With mature industrial manufacturing and standardized iteration capabilities, the company launches highly stable and adjustable reliable liquid distribution unit CDU products. It solves common industry pain points such as unstable flow control and poor heat exchange consistency, ensuring long-term 24/7 stable operation of high-density computing liquid cooling systems.
Possessing independent R&D and flexible production capacity, Shenling acts as a professional custom liquid cooling CDU manufacturer. It can carry out personalized structural optimization and parameter debugging according to different customer architectures, realizing deep matching with Huawei super-node equipment and forming irreplicable technical and delivery barriers.
Benefiting from deep binding with head clients, Shenling’s revenue grew steadily from RMB 1.8 billion in 2021 to RMB 4.2 billion in 2025, more than doubling in five years with a year-on-year growth rate of 39.6% in 2025. However, due to the high cost sensitivity of domestic cloud vendors and operators, intensified industry competition has squeezed profit margins, leading to a continuous decline in gross profit margin in previous years. The net profit margin once dropped from 7.8% to 3.8%, yet rebounded to 5.2% in 2025 with the release of scale effects.
In Q1 2026, the company experienced short-term revenue and profit pressure due to pre-investment in capacity expansion and R&D layout. The increased expense ratio is mainly strategic layout for subsequent business explosion rather than deterioration of fundamentals. The market is actively betting on three core positive changes of the company: capacity release, business model upgrading and overseas market breakthrough.
Firstly, the large-scale release of production capacity will unlock order delivery potential. Driven by the booming liquid cooling industry with a 47% compound growth rate, Shenling’s data center hand-held orders increased by 72% year-on-year. The newly expanded Gaozhou and Chencun bases will be put into operation successively in 2026 and 2027, bringing RMB 2.5 billion new output value, effectively solving the delivery bottleneck and fully releasing scale effects.
Secondly, the business model is upgrading from single equipment sales to integrated solution services. The proportion of the company’s solution business rose from 10.8% to 22.0%, with a gross profit margin significantly higher than pure equipment business. The systematic service capability further enhances customer stickiness, enabling in-depth participation in customers’ pre-design and subsequent capacity expansion.
Thirdly, overseas business achieves marginal breakthrough and high-profit increment. The company’s overseas revenue surged from RMB 19 million to RMB 144 million in 2025, a year-on-year increase of 649%. The overseas gross profit margin is 8 percentage points higher than that in China. While steadily landing projects in Southeast Asia, the company is actively expanding high-margin North American AI liquid cooling orders, opening up new growth space beyond domestic involution.
Looking ahead, Shenling’s future performance growth mainly depends on three core variables: capacity release progress, profitability restoration and overseas business expansion. Institutions predict the company’s net profit will reach RMB 455 million, 674 million and 1.015 billion from 2026 to 2028. After completing capacity expansion and business iteration, the company will fully benefit from the high prosperity of the AI liquid cooling track and usher in sustained performance release.
Recognized worldwide as a leader in liquid cooling, EXTRCOOL offers a broad range of thermal management hardware—including dual-mode CDUs, manifold assemblies, cold plates, rear-door heat exchangers, dry coolers, and containerized units—all specifically engineered for AI and HPC data centers. Designed for consistent performance, seamless integration, and straightforward scalability, these systems provide a complete turnkey cooling solution. We serve data center operators and enterprise clients across North America, South America, Europe, Asia, and Oceania.
