Summary of the Conference Call for Shunwang Technology Company Overview - **Company**: Shunwang Technology - **Industry**: Cloud Computing and Gaming Key Points on Cloud Business - **Growth Targets**: The cloud business is entering an accelerated growth phase, with high growth targets set for 2026-2027. The company plans to disclose cloud revenue separately starting in 2025, with profitability expected in 2026 [2][3][10]. - **Current Scale**: The computing power scale has reached 50,000 units, but the penetration rate is less than 1%. The company has adopted a "build by sales" and co-construction model, covering over 200 cities nationwide, with significant acceleration expected in 2026 [2][3][7]. - **Revenue Structure**: Revenue is composed of computing power services, cloud gaming/AI applications, cloud box sales, and equipment rentals. The increase in rates after the end of the discount period in 2026 is expected to contribute significantly to revenue growth [2][4][10]. - **High-Gross Margin Business**: The high-margin AI cloud gaming business is anticipated to be a key driver for profit growth. Demand from C-end users is strong, leading to a queue for services [2][3][10]. - **Traditional Business Adjustments**: The company is actively shrinking low-margin value-added services, which may pressure revenue in Q1-Q2 of 2026, but profits are expected to remain stable. A collaboration with Bilibili on the game "Three Kingdoms: Hundred Generals" is a major growth point for 2026 [2][5][6]. Cloud Business Details - **Revenue Projections**: The cloud business is projected to generate revenue of approximately 50 to 60 million yuan in 2025. The company has set innovative stock incentive targets based on cloud revenue [3][4]. - **Service Offerings**: The cloud business includes: - **Computing Power Services**: Revenue from renting computing power to esports venues. - **Cloud Services**: Includes cloud gaming for individual players and AI application clients [3][4]. - **Cloud Box Sales**: Customized terminal devices sold to clients for accessing cloud services [4]. - **Equipment Rentals**: Clients may rent computing equipment alongside cloud services [4]. - **Future Growth Drivers**: The growth will be supported by the expansion of computing resources and the increase in cloud service adoption rates as clients recognize the benefits of the cloud gaming model [4][10]. Traditional Business Overview - **Segments**: The traditional business is divided into internet advertising and value-added services, gaming, and exhibition businesses. The internet advertising segment has shown steady growth, driven by the recovery of the internet café industry and the overall gaming market [5][6]. - **Performance Outlook**: The company expects the traditional business to continue stable growth, despite a slowdown in revenue growth in Q3 2025 due to the strategic reduction of low-margin services [5][6][18]. - **Exhibition Business**: The ChinaJoy exhibition business has stabilized post-pandemic, with plans to explore new sub-brand activities in 2026 to drive additional revenue [2][5]. Market Dynamics and Customer Insights - **Customer Base**: The customer base primarily consists of small to medium-sized operators in the esports venue sector, with a significant opportunity for cloud service adoption as hardware needs to be updated [11][12]. - **Market Penetration**: As of Q3 2025, the company's computing power scale is 50,000 units, indicating a penetration rate of less than 1% in the esports venue market, highlighting substantial growth potential [14][15]. - **Demand for Cloud Services**: The demand for cloud services is robust, with users often waiting for access due to high demand and limited supply [13][14]. Financial Performance and Projections - **Profitability Status**: Currently, the cloud computing industry, including the company, is focused on expanding scale rather than profitability. The company anticipates achieving profitability if it meets its 2026 performance targets [10][17]. - **Revenue Growth Expectations**: The transition from promotional pricing to standard rates in 2026 is expected to significantly impact revenue, with projections of reaching 240 to 320 million yuan [16][17]. Conclusion - **Strategic Focus**: The company is strategically positioned to leverage its cloud computing capabilities and traditional business strengths to drive growth in the esports and gaming sectors, with a clear roadmap for revenue and profitability in the coming years [2][3][10].

Core Breakthrough: Redefining Cloud Gaming Experience Standards - The company has achieved a peak output of 360 frames per second, significantly surpassing the typical 60 frames offered by standard cloud gaming services, thus providing a smoother visual experience and reducing input latency [3][4] - The platform uniquely offers 8K ultra-high-definition resolution, overcoming the common issue of detail loss in traditional cloud gaming due to compression technology [3] - Extensive investment in infrastructure has led to the deployment of edge computing nodes nationwide, allowing 97% of users to access services within their province, achieving network latency below 10ms [3] Legendary Testimony: Endorsement by Professional Esports Players - The choice of Haima Cloud Computer by CS:GO legend DANK1NG for his cloud esports live broadcast serves as a strong endorsement of the product's capabilities [6] - During the live stream, DANK1NG showcased not only his exceptional skills but also validated the company's claims of providing an "esports-level cloud computer" experience [6] Significance of the Live Broadcast: A Milestone for Cloud Esports - The live broadcast is recognized as the first public cloud esports event, demonstrating that cloud gaming can be both playable and professional [8] - The success of this esports-level live broadcast signals a maturation of the entire cloud esports ecosystem, indicating a shift towards mainstream gaming experiences [8] - With ongoing innovations from leading companies like Haima Cloud Computer, cloud esports is expected to become a significant component of the gaming world, catering to both professional events and casual players [8]