Summary of Hongjing Technology Conference Call Company Overview - **Company**: Hongjing Technology - **Industry**: Computing Power Services Key Financial Highlights - **2023 Revenue**: 115 million CNY from computing power business, primarily from national laboratory projects [2] - **2024 Contracts**: Signed contracts worth 1.3 billion CNY for H800, expected revenue to rise to 489 million CNY [2] - **2025 Contracts**: Total disclosed contracts reached 2.75 billion CNY, including a five-year contract for 100,000 H200 cards and contracts with Ningxia Mobile [2][4] - **Q3 2025 Revenue**: Total revenue of 1.551 billion CNY as of Q3 2025 [2] Profitability and Financial Management - **Net Profit Margin**: Maintained around 15% for H800 and H200 cards; expected to be higher for B cards [2][6] - **Q3 2025 Profit Issues**: Lower than expected due to incomplete billing of major leasing projects; improvement expected in Q4 2025 [7] - **Cash Flow Management**: Collaborations with state-owned enterprises to reduce financing costs and stabilize supply chains [6] Business Development and Strategy - **Computing Power Business Development**: Launched in 2022, leveraging early entry since 2013; significant contracts signed for H800 and H200 cards [3] - **Future Plans**: Focus on building computing power infrastructure and developing cloud platform resource scheduling to meet increasing demand [5] - **Contract Structure**: Primarily five-year contracts, ensuring stable revenue streams [13] Market Position and Competition - **Competitive Landscape**: Major competitors include companies with prior large-scale orders; customer preference for suppliers with proven delivery capabilities [14] - **International Expansion**: Rapid growth in Southeast Asia, with contracts signed in Singapore and ongoing negotiations for additional projects [9] Technology Trends - **Cooling Technology**: Air cooling remains dominant, but liquid cooling expected to increase with new product lines [15] - **Impact on Operations**: Different maintenance requirements for liquid vs. air cooling technologies; company preparing for these changes [16] Customer Demand and Market Trends - **High-Performance Card Demand**: Strong demand for B200 and B300 cards; H200 policy changes unlikely to affect rental market significantly [26] - **Large Enterprises' Spending Trends**: Estimated budget of 390 billion CNY for large enterprises, with actual spending likely exceeding stated amounts [21] Future Outlook - **2025 and 2026 Performance Expectations**: Targeting 10% growth in 2026, with net profit margin around 15% [12] - **Order Fulfillment Timeline**: Anticipated completion of B card deliveries and customer acceptance by mid-2026 [28]

Investment Rating - The report maintains a "Buy" rating for Nvidia (NVDA.O) [7][11]. Core Insights - Nvidia's Q3 performance and strong guidance counter the concerns regarding an AI bubble, indicating genuine resilience in AI demand [3][11]. - The company has adjusted its revenue forecasts for FY2026E-FY2028E to $213.7 billion, $341 billion, and $412.5 billion respectively, with corresponding Non-GAAP net profits of $114.2 billion, $193.1 billion, and $234.5 billion [11][12]. Financial Summary - Revenue projections for Nvidia are as follows (in million USD): - FY2024: $60,922 (125.9% YoY growth) - FY2025: $130,497 (114.2% YoY growth) - FY2026E: $213,695 (63.8% YoY growth) - FY2027E: $341,044 (59.6% YoY growth) - FY2028E: $412,504 (21.0% YoY growth) [5][11]. - Non-GAAP net profit projections are: - FY2024: $32,312 (286.3% YoY growth) - FY2025: $74,266 (129.8% YoY growth) - FY2026E: $114,187 (53.8% YoY growth) - FY2027E: $193,110 (69.1% YoY growth) - FY2028E: $234,537 (21.5% YoY growth) [5][11]. Market Data - Current stock price is $180.64, with a 52-week price range of $94.31 to $207.04 [7][8]. - The current market capitalization is approximately $4.39 trillion [8]. Earnings Forecast and Investment Recommendations - The report suggests a target price of $252 for FY2027, based on a PE ratio of 32X, maintaining the "Buy" rating [11][12]. - The strong Q3 results included a revenue of $57 billion, exceeding Bloomberg's consensus estimate of $55.1 billion, with data center revenue growing by 66% YoY to $51.2 billion [11].