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Earnings Score 52 Bearish

Chinese Data-Center Cooling Stocks Plunge on Profit Warning

Apr 21, 2026 05:06 UTC
Shenzhen Envicool Technology Co., Zhejiang Dayuan Pumps Industrial Co., Feilong Auto Components Co.
Short term

Shares of liquid-cooling providers in China tumbled following a severe earnings miss by a key industry player. The sell-off highlights growing investor anxiety over intensifying competition within the AI infrastructure supply chain.

  • Shenzhen Envicool Q1 profit plummeted 82%
  • Envicool shares hit 10% daily downward limit
  • Zhejiang Dayuan Pumps and Feilong Auto Components fell 7% or more
  • Sell-off driven by fears of intensifying sector competition
  • Impact felt across the AI thermal management supply chain

Chinese liquid-cooling stocks experienced a sharp decline after Shenzhen Envicool Technology Co. reported a dramatic collapse in first-quarter profits. The company's shares hit their 10% daily limit, reflecting a swift market reaction to the financial results. The downturn underscores broader concerns regarding the sustainability of margins in the data-center cooling space. As the demand for high-performance AI chips grows, the infrastructure required to manage thermal loads has become a crowded trade, leading to increased pricing pressure among providers. According to the reported figures, Shenzhen Envicool saw its first-quarter profit plunge by 82%. This steep decline served as a catalyst for a wider sector correction, as investors reassessed the valuation of companies providing critical cooling components for data centers. The contagion spread rapidly to industry peers. Both Zhejiang Dayuan Pumps Industrial Co. and Feilong Auto Components Co. saw their share prices tumble by at least 7%, signaling that the market views Envicool's struggles as a systemic issue within the domestic cooling industry rather than an isolated corporate failure.

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