China Bester (SH:603220) Zheng Quan Zhi Xing·2025-07-11 11:19Core Viewpoint - The company received an inquiry letter from the Shanghai Stock Exchange regarding its 2024 annual report, prompting a detailed response about its intelligent computing business model and financial performance [1][2]. Group 1: Business Model and Financial Performance - The intelligent computing business primarily provides design, construction, and operation services for computing clusters, targeting telecom operators, cloud service providers, and AI model companies [3][4]. - The company reported a significant revenue increase of 3696.16% in the first quarter of 2025, with revenues of 1.35 billion yuan, reflecting a year-on-year growth of 972.79% [2]. - The average revenue from intelligent computing business in the third and fourth quarters of 2024 is expected to be lower due to the ongoing expansion of computing power, which exceeded 10,000 PetaFLOPS by July 2024 and is projected to surpass 15,000 PetaFLOPS by the end of the year [2][3]. Group 2: Cost Structure and Profitability - The gross profit margin for the intelligent computing business was reported at 41.04% for 2024, which, while lower than previous years, remains significantly higher than other business segments [2][7]. - The main costs associated with the intelligent computing business are manufacturing expenses, primarily related to server depreciation, and other costs including cabinet rental and bandwidth fees [5][6]. Group 3: Client and Supplier Analysis - The company provided a detailed list of its top ten clients and suppliers, confirming that there are no related party transactions, and the transaction amounts are reasonable compared to the clients' capital [6][19]. - The company actively engages in public bidding and negotiations to secure contracts for its intelligent computing projects, ensuring a diverse client base [4][6]. Group 4: Revenue Recognition and Stability - Revenue from intelligent computing services is recognized monthly based on the services provided, ensuring a consistent income stream [5][10]. - The company anticipates stable revenue growth in the intelligent computing sector, supported by a robust client base and ongoing demand for AI computing power [10][11].