Group 1 - The core viewpoint of the report emphasizes that the rise of the intelligent computing era presents unprecedented development opportunities for the domestic computing power industry chain in China, driven by the deep integration of artificial intelligence and the digital economy [1][2]. - The report highlights that artificial intelligence has penetrated 80% of application scenarios, making intelligent computing a fundamental resource akin to water and electricity, although its scarcity and high costs remain key bottlenecks for AI development [2][3]. - The Chinese AI market spending reached $14.75 billion in 2023, with a projected compound annual growth rate (CAGR) exceeding 20% from 2021 to 2026, indicating strong demand for AI servers, which accounted for over 80% of hardware investments [2][3]. Group 2 - The report identifies three driving forces reshaping the computing power landscape, including the structural transformation of computing forms due to the prevalence of large-scale AI models, which significantly boosts demand for intelligent computing [3][4]. - In 2022, China's intelligent computing scale reached 268 EFLOPS, with expectations to exceed 1271 EFLOPS by 2026, reflecting a CAGR of 47.6% [3][4]. - The report outlines national policies supporting the development of computing infrastructure, with specific targets set for 2025, including a total computing power scale of 300 EFLOPS and an intelligent computing proportion of 35% [4][5]. Group 3 - The report discusses the rapid growth of the AI chip market, with the market size reaching 120.6 billion yuan in 2023 and expected to grow to 141.2 billion yuan in 2024, highlighting the increasing domestic market share of AI chips [6][7]. - AI servers are differentiated from traditional servers by their design, which includes multiple GPU acceleration cards and specialized cooling systems, with chip costs accounting for up to 83% of high-end server expenses [6][7]. - The report notes that service providers are evolving from basic data center leasing to offering value-added services, establishing a service system that combines wholesale and retail models [7][8]. Group 4 - The report emphasizes the importance of domestic technology breakthroughs, with companies like Huawei and Cambricon making significant advancements in AI solutions and chip technology [4][5]. - The construction of intelligent computing centers is accelerating, with over 140 projects tendered in the first seven months of 2024, indicating a trend towards large-scale development [4][5]. - The report highlights the collaborative layout of computing resources across regions, driven by initiatives like the "East Data West Computing" project, which optimizes national computing resource allocation [7][8].

Financial Data and Key Metrics Changes - Operating revenue increased to JPY 386.89 billion, representing a 4.6% growth year-on-year [5] - Profitability reached JPY 20.6 billion, a 10.1% increase compared to the same period last year [5] - Return on equity rose by 5.8% [5] - Total mobile and broadband subscribers reached 470 million, with IoT connections exceeding 620 million [5] Business Line Data and Key Metrics Changes - Uni Unicom cloud revenue grew by 17.1% to JPY 68.6 billion [6] - Data center revenue increased by 7.4% to JPY 25.9 billion [6] - Net contract value of Intelligent Computing business exceeded JPY 1 billion [6] Market Data and Key Metrics Changes - International business revenue reached JPY 500 million, a 15.2% increase over the previous year [22] - The company established 40 global branches in countries like Saudi Arabia, Peru, UAE, and Uzbekistan [22] Company Strategy and Development Direction - Focus on connectivity communications, computing, and digital smart appliances, emphasizing innovation and breakthroughs [4] - Investment strategy aimed at building new infrastructure with a focus on intelligent operations [7] - Anticipated CapEx for 2025 is around JPY 55 billion, with a 28% year-on-year increase in computing power [25] - Commitment to enhancing innovation momentum and optimizing business structure [26] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and commitment to enhancing quality, efficiency, and revenue [25] - The company aims to create more value for society and investors while fulfilling corporate ESG responsibilities [23][26] Other Important Information - The company was included in the FTSE China A50 index, effective soon [24] - Dividend payout ratio increased by 5% points, with a 20.1% increase in dividend payout [24][25] Q&A Session Summary Question: What are the expectations for future growth? - Management indicated that they anticipate continued growth in both domestic and international markets, with a focus on innovation and infrastructure development [25] Question: How is the company addressing ESG responsibilities? - The company highlighted its efforts in energy efficiency, clean energy use, and serving rural areas through digital platforms [23] Question: What are the key areas of investment for the upcoming year? - Key areas of investment include computing power, AI projects, and infrastructure development, with a special budget allocated for these initiatives [25]