Summary of Ruijie Networks Conference Call Company Overview - **Company**: Ruijie Networks - **Date**: October 21, 2025 Key Financial Metrics - **Revenue**: 106.1 billion CNY for the first three quarters, up 27.5% year-on-year [2][3] - **Net Profit**: 6.8 billion CNY, up 65% year-on-year [2][3] - **Operating Cash Flow**: Approximately 2.8 billion CNY, nearly a 200% increase [2][3] - **Q3 Revenue**: 40.3 billion CNY, up 6.8% year-on-year [4] - **Q3 Net Profit**: 2.3 billion CNY, roughly flat compared to the previous year [4] Revenue Breakdown - **Domestic Revenue**: 88.4 billion CNY, up 23.9% [7] - **Overseas Revenue**: 18.36 billion CNY, up 48% [7] - **Direct Sales Revenue**: 61.2 billion CNY, up 52%, accounting for 57% of total revenue [8] - **Distributor Sales Revenue**: 45.5 billion CNY, up only 5%, accounting for 43% of total revenue [8] Product Performance - **Network Equipment Revenue**: 92.68 billion CNY, up 37.9% [6] - **Network Security Products Revenue**: 3.4 billion CNY, up 11.7% [6] - **Cloud Desktop Revenue**: 3.7 billion CNY, down 3.8% [6] Market Trends and Insights - **Data Center Market**: Identified as the main battleground for the year, with significant projects won from leading internet companies [9][10] - **Internet Industry Data Center Revenue**: Approximately 52 billion CNY, with 400G products accounting for 34 billion CNY and 800G products exceeding 7 billion CNY [9][22] - **800G Growth Expectation**: Anticipated to double by 2026, although it will not become the mainstream product alone [16][22] Strategic Initiatives - **Focus on Product Innovation**: The company has enhanced market competitiveness through product innovation, particularly in response to rapid AI development [3] - **Overseas Market Strategy**: Continued growth in overseas markets, particularly in Southeast Asia, Middle East, and parts of Europe [17][18] Industry Positioning - **Market Share**: Ranked first in Ethernet switch market share and third in data center switch market share [14] - **Competitive Landscape**: The company is leveraging its strengths in Ethernet interconnection and optical communication to create solutions in the emerging supernode technology space [20][21] Future Outlook - **Q4 and 2026 Expectations**: Optimistic about Q4 performance and 2026 market demand, driven by major players like Alibaba and ByteDance planning significant capital expenditures [15][33] - **Supernode Technology**: Expected to see larger scale applications in 2026, with ongoing developments in GPU interconnection solutions [26][30] Additional Insights - **Cost Management**: The increase in expense ratio is attributed to early business progress, but overall financial data remains aligned with business performance [23][28] - **Domestic Chip Localization**: Progress in domestic chip production is noted, particularly in high-speed products, although challenges remain in the internet and operator application scenarios [24][25] This summary encapsulates the key points from the conference call, highlighting Ruijie Networks' financial performance, market strategies, product developments, and future outlook.

Group 1 - Huawei reintroduced the Kirin chip at a product launch event after four years, showcasing the MateXTs and other products featuring the Kirin 9020 chip and Harmony OS, with an overall performance improvement of 36% [1] - The Kirin 9020 chip is positioned at the high-end processor level, comparable to a downclocked Snapdragon 8 Gen 2, with performance between Snapdragon 8+ and Snapdragon 8 Gen 2 [1] - The self-developed Kirin X90 chip utilizes Huawei's "Tai Shan V3" architecture based on the ARMv9 instruction set, featuring a first-time implementation of "hyper-threading + big.LITTLE heterogeneous" design on PC, with a core count increase of 30% compared to the previous Kirin 9000 series and a 40% improvement in energy efficiency [1] Group 2 - Shenzhen Huaqiang is a major authorized distributor for Huawei HiSilicon, distributing various IC products [2] - Pioneer Electronics collaborates with Huawei, applying HiSilicon chips in NB-IoT smart gas metering products [3]

Group 1 - Shanghai Yizhi Electronic Technology Co., Ltd. (Yizhi Electronics) is planning a new round of financing, with He Sheng New Materials (002290) intending to participate by investing 250 million yuan, which will give He Sheng a 10% stake in Yizhi Electronics at a pre-investment valuation of 2.25 billion yuan [1] - Yizhi Electronics has launched two series of ARM server processor chips, including the TF16000 and TF7000 series, targeting applications in visual AI, edge computing, AI, cloud computing, IoT, and information services [1][2] - Yizhi Electronics is developing the third-generation TF9000 series hybrid computing chip, optimized for general cloud computing and AI intelligent computing, expected to offer high performance and cost-effectiveness [2] Group 2 - He Sheng New Materials views the investment in Yizhi Electronics as a further attempt in the AI field, building on previous collaborations, including a joint venture established in March 2024 focused on AI chip development [3] - The partnership between He Sheng New Materials and Yizhi Electronics is expected to enhance their business cooperation, with Yizhi's ARM CPU supporting He Sheng's AI applications and He Sheng facilitating Yizhi's product reach to downstream customers [3] - He Sheng New Materials plans to collaborate closely with domestic hardware suppliers to improve AI computing chip performance, focusing on enhancing computing speed and reducing energy consumption [4]