Zhongchen Co., Ltd. (300933) Analysis of Potential Benefits from Computing Power: Fundamental Differences Between Traditional Cable Business and AI Demand

Based on an in-depth analysis of Zhongchen Co., Ltd. (300933), we explore its potential to benefit from the booming computing power demand.

Zhongchen Co., Ltd. is a GEM-listed company focusing on the wire and cable industry, with its main business composition as follows [0][1][2]:

• Power cables:
  Account for over 80% of main business revenue, mainly including 110kV and below power cables, and 750kV and below bare conductors
• Electrical equipment wires and cables:
  Cover regular products such as wiring cables and control cables
• Cable accessories:
  Account for approximately 1-2%

Main customers are State Grid, China Southern Power Grid, and provincial/municipal power companies; products are used in the construction and renovation of main power transmission networks, urban distribution networks, and rural power grids [2].

From product characteristics and application scenarios, Zhongchen’s traditional business is fundamentally different from the high-speed copper cable connections required for AI data centers:

Dimension	Zhongchen’s Existing Business	Computing Power Copper Cable Demand
Product Type	Traditional power cables	High-speed copper cable connectors
Application Scenario	Main power transmission networks, distribution networks	Data center server interconnection
Technical Requirements	Power transmission	High-speed signal transmission (112G, 800G, etc.)
Downstream Customers	Power grid companies	Cloud computing vendors, server manufacturers

Recently, the high-speed copper cable connector concept has gained momentum; related companies such as Zhaolong Interconnect have clearly stated that their single-pass 112G and 800G products are mainly used in AI-related data centers, with the high-speed connector business growing by over 50% in the first three quarters [1]. However, Zhongchen’s business reports do not mention any layout of high-speed connector or data center-related products.

According to the company’s 2025 semi-annual report and historical announcements, Zhongchen’s business focus remains on traditional power infrastructure [0][2]:

• R&D investment mainly focuses on intelligent manufacturing and process improvement
• Ongoing projects focus on capacity expansion and digital transformation
• No product R&D plans targeting AI computing power infrastructure have been disclosed

Zhongchen’s current valuation level reflects the market’s pricing for its traditional business [0]:

Indicator	Value	Industry Evaluation
PE ratio	194.59x	Significantly high
PB ratio	2.00x	Relatively reasonable
ROE	1.20%	Weak profitability
Net profit margin	0.71%	Low

Stock price performance: It rose 19.55% in the past year but fell 34.88% cumulatively over 5 years, with average overall performance [0].

, mainly due to the following reasons:

1. Product positioning mismatch
   : The company mainly engages in traditional power cables, not copper cable connectors required for high-speed interconnection in data centers

2. Lack of technical reserves
   : No involvement in high-speed transmission technology in its business layout, and no technical foundation to enter the AI data center supply chain

3. Customer structure difference
   : Main customers are power grid companies, not cloud computing or internet enterprises

4. Industry rotation effect
   : Although it may receive attention as an industrial sector target due to industry rotation, it lacks substantial performance support

If the market speculates on the “copper cable” concept, note the following risks:

• Low correlation between the company’s business and AI computing power
• Current valuation (PE 194.59x) has significantly overdrawn expectations
• Weak profitability with ROE of only 1.2%

For investors seeking computing power theme investment opportunities, it is recommended to focus on enterprises that truly have high-speed copper cable connector business layouts, such as Zhaolong Interconnect, Dingtong Technology, Huafeng Technology, etc., which clearly involve data center interconnection products [1].

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[0] 金灵API - 中辰股份(300933.SZ)公司概况与财务数据
[1] 新浪财经 - “AI算力驱动需求放量 铜缆高速连接器概念走强” (https://finance.sina.com.cn/jjxw/2025-12-23/doc-inhcuunk0702791.shtml)
[2] 中辰股份2023年年度报告 (http://static.cninfo.com.cn/finalpage/2024-04-27/1219860937.PDF)