Author｜Ren Tianqin

Editor｜Chen Xiaoran

ODM Leader Steps into AIDC Infrastructure Arena

On the evening of August 13, Longcheer Technology (603341.SH; 09611.HK) made a public announcement that sent ripples across the market.

This global leader in smartphone ODM manufacturing unveiled its plan to acquire an 80% stake in Suzhou AnRuike Information Technology Co., Ltd., for a cash consideration of 1.12 billion yuan.

According to the announcement, AnRuike's overall equity valuation stands at approximately 1.509 billion yuan. Based on the valuation corresponding to the 80% stake, the transaction price reflects a discount of around 7.2%. When compared to the book value of the target's net assets, the valuation premium rate soars to 424.98%.

Image Source: Longcheer Technology Announcement

Why would a smartphone ODM behemoth invest heavily in the data center sector? The answer lies in AnRuike's capabilities.

Established in 2011, AnRuike is a national-level high-tech enterprise specializing in data center infrastructure products and integrated solutions.

Its product range encompasses low-voltage power distribution systems, ITPOD computing infrastructure modules, and modular data center (MDC) solutions. This includes equipment such as power distribution cabinets, busbars, server racks, intelligent PDUs, hot and cold aisle systems, and transformers.

AnRuike boasts mature commercial delivery capabilities. Its products have secured international certifications like UL and ETL, while its self-developed prefabricated modular data center solution has achieved Uptime Institute TIER III Ready certification. According to the company's official website, its EDGEasyfree series was among the first full-range prefabricated modular products globally to receive this certification.

Moreover, AnRuike's self-developed EDGEasy series products are versatile, adaptable to diverse scenarios including AI computing centers, edge computing nodes, and large-scale data centers.

In April 2026, AnRuike set up its national headquarters and industrialization base in Suzhou, with a planned total investment of 500 million yuan and the establishment of multiple core product lines.

More notably, AnRuike has previously been involved in several large overseas data center projects, amassing customer resources and experience in delivering large-scale projects in international markets.

Thus, Longcheer Technology's acquisition is not merely about acquiring a data center hardware manufacturer; it's about gaining a comprehensive set of data center infrastructure capabilities that span design, manufacturing, project delivery, and overseas market expansion.

The performance commitments also set clear benchmarks.

According to the transaction plan, AnRuike's net profits from 2026 to 2028 are projected to be no less than 130 million yuan, 160 million yuan, and 190 million yuan, respectively, with a cumulative total of no less than 480 million yuan over the three years. If these targets are surpassed, the acquirer will provide a bonus equivalent to 20% of the excess amount, capped at 40 million yuan annually.

Shifting our focus to Longcheer Technology itself, the company is already a dominant force in the global consumer electronics ODM sector.

Based on 2024 shipment volumes, Longcheer Technology ranks second globally in consumer electronics ODM shipments, with a market share of 22.4%. Among these, its smartphone ODM shipments top the global charts, boasting a market share of 32.6%.

However, the industry landscape has undergone significant shifts in just two years.

In the first quarter of 2026, Longcheer Technology's smartphone business, which contributes nearly 70% of its revenue, witnessed a year-on-year decline of 22.78%, bringing in 5.205 billion yuan. Its tablet business revenue also decreased by 15.16% to 807 million yuan. Only its AIoT business revenue saw a slight increase of 1.33% to 1.423 billion yuan.

Longcheer Technology acknowledged that the pressure on its smartphone business stems from rising raw material prices, such as memory chips, and adjustments in shipment volumes.

Behind this lies a broader cooling trend across the entire ODM industry. Counterpoint data reveals that in the second half of 2025, smartphone shipments using ODM/IDH solutions declined by 10% year-on-year, marking the end of a period of sustained growth.

Entering 2026, global smartphone shipments in the first quarter fell by 6% year-on-year, primarily due to tight supplies of DRAM and NAND and sluggish end-user demand. The second quarter saw a further year-on-year decline of 11%, with industry sentiment remaining subdued.

For ODM manufacturers, who rely on large-scale production and already operate on razor-thin profit margins, the simultaneous occurrence of rising memory prices and weakening end-user demand means their profitability faces dual pressures.

While the consumer electronics market continues to languish, computing infrastructure is emerging as a new frontier for capital expenditure.

In July 2026, the National Development and Reform Commission disclosed that during the "15th Five-Year Plan" period, the construction of computing networks is expected to generate 4 trillion yuan in new direct investments. However, this figure represents institutional estimates rather than the scale of government fiscal investment.

Nevertheless, the trend is unmistakable. Against this backdrop, Longcheer Technology is extending its reach from consumer electronics ODM to AIDC infrastructure. Rather than a complete departure from its core business, this move can be seen as an attempt to leverage its expertise in large-client management, supply chain organization, and large-scale manufacturing into the AI infrastructure sector.

For Longcheer Technology, the most immediate significance of this transaction lies in gaining a foothold in AIDC infrastructure beyond AI-enabled devices.

Post-acquisition, if the two companies can achieve synergy in customer resources, supply chain systems, and manufacturing capabilities, Longcheer Technology's accumulated experience in global large-client management, procurement, and overseas manufacturing could bolster AnRuike's ability to deliver AIDC infrastructure solutions at scale.

The industry's potential also offers ample room for imagination. According to estimates by Sino Market Insight, China's AIDC market size is projected to reach approximately 177.8 billion yuan in 2026 and nearly 400 billion yuan by 2030.

However, risks loom large and cannot be overlooked.

The financial and valuation pressures are palpable, with the 1.12 billion yuan transaction price equivalent to approximately 73 times Longcheer Technology's net profit attributable to shareholders for the first quarter of 2026. While comparing a single quarter's profit does not fully capture long-term profitability, the scale of this capital investment is substantial given the significant pressure on the company's core business profits.

Although consumer electronics ODM and data center infrastructure both involve hardware manufacturing and rely on complex supply chains, their business models differ markedly.

The former emphasizes large-scale mass production, rapid product iteration, and stringent cost control, while the latter adopts a project-based approach, encompassing solution design, qualification certification, and engineering delivery, with longer project cycles.

Whether Longcheer Technology's existing mature manufacturing management experience can be transformed into a core competitive advantage for its AIDC business remains to be seen and validated by the market.

Additionally, the target's ability to deliver on its profit commitments warrants ongoing scrutiny. The transaction includes performance commitment clauses, under which the counterparty will compensate Longcheer Technology if AnRuike fails to achieve a net profit of 130 million yuan in 2026.

While this mechanism provides a certain degree of protection for Longcheer Technology, the steady upward trajectory of the target's future profitability will directly determine the ultimate return on investment from this acquisition.