Summary of NewEase Network Group Conference Call Company Overview - NewEase Network Group's core business is the Interconnection Advantage business, providing IDC services through data centers, operating 8 data centers with a total power capacity exceeding 100 megawatts and a utilization rate of 90% [2][4] - The company has a unique fiber interconnection network backed by Sun Hung Kai Properties, giving it advantages in land, power, financing, and engineering construction [2][6] - Mega I data center connects over 9 submarine cable systems globally, making it the first interconnection center in Asia [2][8] Financial Performance - For the fiscal year 2025, NewEase Network Group reported a net profit of 900 to 1,000 million HKD, with an EBITDA margin around 70% [3] - The average monthly rental revenue per cabinet for IDC facilities is projected to reach 2,500 HKD per kilowatt per month, with an average EBITDA of 2,000 HKD per kilowatt per month in the second half of 2024 [10] - The company maintains a gross margin of over 52% for data center-related businesses, with annual revenue growth of over 10% [5][10] Customer Structure - The customer base is diverse, including international cloud clients (Oracle, Amazon, Google) and domestic cloud clients (Alibaba, Tencent), with cloud clients accounting for a significant portion of data center revenue [2][11] - The expansion of international cloud clients and domestic clients going global is expected to benefit the company [11] Competitive Advantages - NewEase Network Group's competitive advantages include its exclusive fiber interconnection network and support from Sun Hung Kai Properties, allowing it to secure prime locations in Hong Kong [6][12] - The company has a significant market share of over 30% in the Hong Kong IDC market, while competitors hold less than 10% [12] Future Outlook - The company is entering a new phase of investment and expansion, with the completion of Mega Gateway and Mega IDC, the largest IDC in Hong Kong, which has a total floor area of 1.2 million square feet and supports 180 megawatts of power capacity [13] - Future capacity may increase to 280-300 megawatts, potentially generating over 3 billion HKD in net profit [13] - The growth of AI applications is expected to further enhance performance, with an anticipated increase in cabinet utilization and delivery volume [7] Industry Context - As of January 2025, Hong Kong's telecommunications network connects 12 submarine cable systems, with several more under construction, enhancing the region's connectivity [8] - NewEase Network Group's Mega I data center is part of a larger ecosystem connecting over 200 telecommunications and internet service providers globally [8][9]

Core Viewpoint - The company plans to raise up to 1.695 billion yuan through a private placement of A-shares to enhance its capital strength and profitability, with the funds allocated to a new generation cloud computing and artificial intelligence industrial park project [1][7][8]. Group 1: Background and Purpose of the Stock Issuance - The domestic data center industry is experiencing a new wave of development opportunities driven by the rapid advancements in artificial intelligence technology and the increasing demand for computing power [2][4]. - The Chinese intelligent computing power scale is projected to reach 1,037.3 EFLOPS by 2025, with a compound annual growth rate of 46.2% from 2023 to 2028, significantly boosting the IDC industry [2][3]. - Major cloud computing and internet companies are increasing investments in computing infrastructure, with Alibaba planning to invest at least 380 billion yuan over three years and Baidu committing 1.6 billion USD for its cloud and AI infrastructure [3][4]. Group 2: Industry Growth and Policy Support - The IDC industry is a crucial infrastructure for developing strategic emerging industries and implementing national big data strategies, with increasing government support for the sector [5][6]. - The Ministry of Industry and Information Technology aims to enhance the computing power infrastructure by 2025, with specific targets for 5G base stations and user penetration rates [3][5]. - The IDC industry is expected to enter a period of rapid growth, driven by high demand for data storage, processing, and transmission capabilities [4][6]. Group 3: Company Strategy and Financial Health - The company operates 14 self-built data centers across various cities and aims to expand its business scale and industry resources through the new industrial park project [6][7]. - The company's asset-liability ratio was 72.70% as of March 31, 2025, indicating a need for enhanced capital strength to support ongoing investments [8][9]. - The issuance of new shares is expected to improve the company's capital structure, reduce the asset-liability ratio, and support sustainable development [8][9]. Group 4: Issuance Details and Compliance - The company plans to issue A-shares with a par value of 1.00 yuan, targeting specific qualified investors, and the issuance will comply with relevant regulations [10][12]. - The pricing for the new shares will be set at no less than 80% of the average trading price over the previous 20 trading days [14][15]. - The issuance process has been approved by the board and shareholders, ensuring compliance with legal and regulatory requirements [16][17].

Key Insights - The aluminum industry is experiencing a favorable macroeconomic environment with reduced tariff pressures and positive policy signals from both the US and China [4][10] - The demand for aluminum products is showing structural recovery, driven by new orders leading to increased inventory needs ahead of the May holiday [6][7] - The supply of electrolytic aluminum remains stable, with production costs slightly increasing, while inventory levels are decreasing [5][10] - The prices of key materials such as metal chromium, polymer MDI, and acetamide are on the rise, indicating a potential boom in the chromium salt cycle [18][27] - The chemical industry is expected to enter a replenishment cycle in 2025, driven by low inventory levels and improving profitability among leading companies [22][23] Company Summaries Aluminum Industry - The average cost of electrolytic aluminum is approximately 16,582 RMB/ton, with a slight week-on-week increase [5] - Domestic aluminum ingot inventory has decreased to 658,000 tons, reflecting a 3.1% drop week-on-week [5] - The aluminum processing sector is witnessing a notable increase in inventory depletion rates, with a current inventory of aluminum rods at 177,800 tons [7] Chemical Industry - The chemical sector is seeing a tightening supply of phosphorous ore, with companies like Baitian Co. expanding production capacity significantly [21] - The chemical industry is projected to benefit from a replenishment cycle in 2025, with major companies expected to see improved performance due to cost advantages and market share growth [22][23] - The prices of key chemical products, including metal chromium and polymer MDI, have increased significantly, indicating strong demand and supply constraints [27][28] Data Center Services - Aofei Data reported a 62.18% year-on-year revenue increase in 2024, with Q1 2025 revenue up 40.62% year-on-year [11][12] - The company is expanding its IDC services, with over 43,000 operational cabinets, benefiting from increased capital expenditure in the internet sector [14][16] - The projected revenue for Aofei Data for 2025-2027 is expected to grow significantly, with a "buy" rating assigned based on its market position and growth potential [16]