China Bester (SH:603220)2025-04-30 02:08Summary of Zhongbei Communication Conference Call Company Overview - Company: Zhongbei Communication - Industry: Telecommunications and New Energy Key Points Financial Performance - In Q1 2025, Zhongbei Communication reported revenue of 549 million yuan, a year-on-year decline of 24.67%. Net profit was 18 million yuan, with a significant drop in net profit excluding non-recurring items by approximately 60% [2][3] - For the full year 2024, the company achieved revenue of 2.984 billion yuan, a growth of 4.28% year-on-year, with net profit of 145 million yuan, slightly up from the previous year. The largest revenue segment was 5G infrastructure, generating 1.968 billion yuan but down 12.13% due to reduced operator investments [3] Business Segments - Intelligent Computing (智算业务): This segment saw explosive growth, with revenue reaching 135 million yuan, up 972.79% year-on-year. The company has invested 3 billion yuan to establish a nationwide intelligent computing cluster, delivering over 15,000P of operational computing power [2][5] - New Energy: The company is focusing on power batteries and energy storage, collaborating with BYD to build a power battery factory in Hefei, targeting commercial vehicle heavy-duty batteries and energy storage systems. The expected scale for the new energy business is 1 billion yuan for the year [2][8][9] Strategic Investments - The company plans to invest 1.9 billion yuan in a private placement, with 1.1 billion yuan allocated for cluster construction to support large model training and small client inference needs [2][7] - The company has a competitive edge in electricity costs in regions like Wudang, which will help optimize financial costs and support its computing power rental business [2][7] Market Trends and Challenges - The domestic 5G infrastructure market is expected to continue declining, with a drop of over 10% last year and further declines anticipated in 2025. The company is focusing on overseas markets such as the Philippines, Saudi Arabia, and South Africa to offset domestic shortfalls, although growth is limited by funding constraints [11][12] - The company is also facing challenges in the high-end SIM card market due to industry restrictions, but it maintains sufficient inventory and has established compliant procurement channels [20] Collaborations and Partnerships - Zhongbei Communication is collaborating with Jinkai New Energy, which handles heavy asset ownership and financing, while Zhongbei provides supply chain and operational services. This partnership reduces financial costs and enhances the development of computing power leasing [4][13][15] - The company is also working with academic teams, including that of Academician Cai Hengli, to develop applications in artificial intelligence, with projects expected to launch within one to two quarters [4][22][23] Future Outlook - The company is optimistic about the growth of its new energy business, with a strong order pipeline from traditional and new clients in the heavy-duty vehicle sector. The Hefei factory is expected to contribute significantly to revenue in Q2 2025 [8][9] - The focus for future development will remain on intelligent computing, 5G infrastructure, and new energy, which are seen as critical growth areas [26] Additional Notes - The company holds 40% of Dahu Industrial, with the remaining shares held by Academician Cai and his team [24][25] - The company is actively addressing misconceptions about its private placement and is progressing well with competitive projects [16][17] This summary encapsulates the key insights from the conference call, highlighting the company's financial performance, strategic initiatives, market challenges, and future outlook.