Summary of Shunwang Technology Conference Call Company Overview - **Company**: Shunwang Technology - **Industry**: E-sports technology and online gaming services Key Points Financial Performance - In the first half of 2025, Shunwang Technology reported a revenue growth of **25.09%**, with net profit increasing by **69.22%** and non-GAAP net profit rising by **54.21%**. The profit growth significantly outpaced revenue growth, primarily driven by strong performance in the online advertising and value-added services segments, as well as a recovery in the internet café industry [2][3][21]. Industry Trends - A notable revival in PC gaming has been observed since late 2024, reflected in user behavior, advertising demand from game companies, and changes in license application types. This trend is expected to continue, positively impacting the entire industry, including Shunwang Technology [4][5][20]. - The internet café industry has shown continuous recovery since 2023, with improved occupancy rates and increased consumer spending, which benefits Shunwang's advertising and value-added services [6][7]. Product Innovation - Shunwang Technology is focused on product innovation, exemplified by the launch of "Wangwei Master 9,300," which incorporates technological improvements and AI capabilities to enhance gaming performance and advertising precision [2][8]. ChinaJoy Exhibition - The 2025 ChinaJoy exhibition saw a record attendance of **410,300**, indicating a robust recovery in the industry post-pandemic. The company introduced new sections for creators and robots, which are expected to generate new revenue streams in the fourth quarter of 2025 [9][14]. AI and Cloud Computing - Shunwang has launched a one-stop AI work platform in the AI cloud computing and edge computing sectors, providing services such as multi-modal generation and programming assistance. This initiative aims to expand market opportunities beyond the e-sports sector [10][11][12]. Advertising Business - The advertising business has a high gross margin, with over **95%** of domestic game companies as clients. The company has optimized resource allocation to meet increasing advertising demand without raising prices, focusing on enhancing product offerings [13][15][17]. Future Outlook - Shunwang Technology anticipates continued growth in advertising and gaming demand, with plans to lock in resources for the latter half of 2025. The company remains optimistic about the ongoing trends in PC gaming and internet café operations, which are expected to bolster revenue performance [22][23]. Cost Structure and Efficiency - The company's advertising business benefits from a high gross margin due to in-house traffic management. Major costs are associated with personnel and software updates, allowing Shunwang to focus on demand-side growth and resource expansion [16][17][18]. Game Development - The gaming segment, managed by its subsidiary Fuyun Technology, focuses on casual game development. New projects are planned for release in the fourth quarter of 2025, pending approval of relevant licenses [19]. Market Demand - The demand for PC gaming and marketing has surged, with a year-on-year growth exceeding **30%** in the second quarter of 2025, indicating strong market interest and potential for revenue growth [20]. This summary encapsulates the key insights from the conference call, highlighting Shunwang Technology's financial performance, industry trends, product innovations, and future outlook.

Group 1: Company Strategy and Financial Management - The company emphasizes a cautious financial management approach while exploring business and technology development opportunities [3][4][9] - The company plans to enhance its core competitiveness by leveraging technological advancements and continuous innovation in the esports and interactive entertainment sectors [16][18] - The company aims to maintain a balance between operational funding needs and investment returns by utilizing idle funds for low-risk financial products [4][19] Group 2: AI and Computing Power Development - The company has established over 300 edge computing power rooms, serving more than 700,000 terminals by the end of 2024 [10][11][19] - The focus is on developing AI MaaS services and intelligent agent applications, integrating various computing resources to provide cost-effective AI model services [24][26] - The company is actively exploring AI applications in various sectors, including smart customer service and healthcare [17][24] Group 3: Market Position and Industry Trends - The esports industry is projected to grow, with a 14.7% increase in the number of esports venues and an estimated revenue of around 90 billion yuan in 2024 [18] - The company is committed to adapting to industry trends, including the shift towards cloud-based storage and computing power [18][24] - The company is open to potential mergers and acquisitions to enhance its market position and resource integration [9][24] Group 4: Investor Relations and Communication - The company ensures transparent and timely information disclosure, adhering to regulations to prevent the leakage of significant undisclosed information [2] - The company actively engages with investors, addressing their concerns and providing updates on business performance and strategic direction [2][3][4] - The company is focused on enhancing investor confidence through sound governance and operational practices [23][28]