Convergence Technology's positive profit alert: Money from AI data centers is starting to flow to cables and servers
On July 7th, Wai Ju Technology issued a positive profit alert, forecasting that the group's net profit for the six months ending June 30, 2026, will increase by approximately 150% to 170% year-on-year. The company attributed this to increased revenue from the data center and server businesses within the wire harness division, as well as improved performance from associated companies. However, the company also cautioned that the figures are currently based on unaudited management accounts and may be adjusted. The final results will be subject to the 2026 interim performance report to be disclosed before the end of August.
The real signal from Wai Ju Technology's alert is that AI data center construction is shifting from major capital expenditures by large companies to more specific supply chain components. GPUs, HBM, and optical modules are expensive and have high narrative density, thus attracting more market attention. However, for data centers to truly operate, servers must be delivered, cables connected, power stabilized, and heat dissipation managed. Ultimately, AI comes down to the server racks.
AI Data Centers Enter Delivery Phase, Detailed Financials of Hardware Chain Begin to Surface
In its 2026 Global Data Center Outlook, JLL pointed out that from 2026 to 2030, the global data center capacity is expected to increase by nearly 100GW, with the global data center industry projected to maintain a compound growth rate of 14% until 2030. By 2030, AI may account for half of the data center workload. JLL also estimated that up to $3 trillion in investment will be required for new supply before 2030, including approximately $1.2 trillion in data center asset value and an additional $1 to $2 trillion in IT equipment investment.
According to JLL's forecast, the demand for AI data centers has become increasingly complex, with both training and inference requiring higher power density, higher network throughput, and higher stability. The higher the computing power demand, the higher the requirements for servers, cables, connection components, power supply systems, and cooling systems. These components previously received little attention, often being treated as supporting infrastructure, but now they are beginning to affect delivery efficiency.
The market is not short of good stories; what is truly needed now are stories that can be continuously verified by financial reports. In the AI hardware chain, market focus is gradually shifting to companies that can generate revenue, profit, and cash flow. For example, Wai Ju Technology's recent positive trading update already reflects these characteristics in its financial statements.
Wai Ju Technology is a custom interconnect solutions provider with over 30 years of industry experience. Headquartered in Hong Kong, it also has production facilities in Mainland China, Japan, Thailand, Vietnam, Mexico, and other locations. The company's products include copper and fiber optic wire harnesses, digital wire products, copper wire products, medical products, and servers, applicable in telecommunications, data centers, industrial equipment, medical devices, automotive wiring, servers, and other scenarios.
The AI narrative has been unfolding for a long time. Wai Ju Technology did not participate in the early stages. At this stage, its involvement resembles the foundational connectivity layer within AI data centers. The business Wai Ju Technology engages in may not be highly prominent, but its financial reports are easier to realize.
Wai Ju Technology's Growth Relies on Servers and Data Centers Entering Its Revenue Structure
Significant changes were already evident in the first half of 2025 for Wai Ju Technology. During the period, the company's revenue was HKD 4.8537 billion, a year-on-year increase of 82.1%; operating profit was HKD 412.7 million, up 32.1% year-on-year; and profit for the period was HKD 313.7 million, an increase of 47.1% year-on-year. The company explicitly stated in its interim results materials that its growth was driven by increased revenue from servers and data centers.
More critical is the segment data. Data shows that in the first half of 2025, data center business revenue reached HKD 941.4 million, a year-on-year increase of 66.8%; server segment revenue reached HKD 2.5642 billion, a staggering year-on-year increase of 318.1%, making the server segment the main driver of the company's growth. The special wire segment revenue was HKD 135.8 million, up 21.8% year-on-year.
Data shows that for the full year 2025, Wai Ju Technology's revenue was HKD 12.4096 billion, a year-on-year increase of 68.0%; profit for the year was HKD 783.6 million, up 69.0% year-on-year; and operating profit was HKD 907.8 million, an increase of 44.4% year-on-year. The company disclosed that server segment and data center segment revenue increased by 132.1% and 49.4% year-on-year, respectively, with AI-related businesses already becoming the core growth engine.
For the first half of 2026, the company has issued another profit alert forecasting a 150% to 170% increase in net profit. Currently, many AI companies have narratives that run ahead of their financials. Wai Ju Technology is different, not only providing financial clues first but also demonstrating sustained growth.
The company also has a variable that is easily overlooked: industrial synergies brought by the Luxshare Precision system. In its 2025 interim materials, Wai Ju Technology mentioned that, with the technical and customer relationship support of Luxshare Precision Industry, it will expand its server business through JDM/ODM business models and further consolidate server business development. For server and interconnect component companies, customer resources, product certification, and delivery stability are often more critical than individual product stories.
Wai Ju Technology has also taken action in its global layout. In July 2025, the company, through its joint venture Time Interconnect Singapore, acquired Leoni Kable GmbH. The company stated that Leoni Kable's brand, technical capabilities, and global layout will help expand the product portfolio, strengthen global influence, and orderly expand the data center business. In December 2025, the group also acquired De Jin Chang Group, further strengthening its copper wire products and supply chain layout.
In summary, Wai Ju Technology is shifting its business from traditional wire harnesses towards servers, data centers, high-speed cables, and global supply chain integration. This direction aligns well with the industrial logic of AI infrastructure implementation.
The Next Layer of Opportunity in AI Hardware Will Require Companies to Deliver Cleaner Profit Quality
It is worth noting that Wai Ju Technology's profit growth comes not only from increased data center and server revenue but also from improved performance of associated companies. The capital market's evaluation of profits derived from core business improvement versus those from associated company contributions will not be entirely the same. After the disclosure of the 2026 interim results, the breakdown of profit sources should be a key focus.
Gross margin also needs continued observation. Server business may not inherently have high gross margins. The company disclosed in the first half of 2025 that high-speed cables have relatively good gross margins, which helps overall profitability, but specific gross margin figures were not disclosed. For Wai Ju Technology, future profit elasticity depends not only on the scale of server revenue but also on the proportion of high-specification cables, data center interconnect solutions, and customized products.
External risks also cannot be ignored. The company's 2025 full-year performance materials mentioned that US tariff increases and geopolitical tensions affect the global economic outlook. For hardware suppliers with cross-regional production and international customers, tariffs, certifications, customer order shifts, raw material prices, and delivery cycles all impact the quality of order fulfillment.
Wai Ju Technology's positive trading update reminds the industry that the money in AI infrastructure has already flowed from the highly visible chips to more specific components inside the data center. The subsequent verification points are also clear: after the 2026 interim results are released, focus on data center revenue, server revenue, gross margin, operating cash flow, and the proportion of contributions from associated companies. As long as the core business continues to deliver, Wai Ju Technology will become a sample worth long-term tracking in the segmented AI infrastructure chain in the Hong Kong stock market.
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