Summary of Key Points from Conference Call Records Industry Overview - The conference call discusses the domestic computing power industry chain, particularly focusing on the switching industry and its performance in the context of recent market trends and regulatory changes [1][5]. Core Insights and Arguments - Strong Demand in North America: There is robust demand for computing power infrastructure in North America, as evidenced by the performance of companies like Nvidia, Stargate Construction, and CO CO Wave, which supports ongoing capital expenditures [1][2]. - Rising Token Consumption: Google’s rapid increase in TOKEN consumption indicates a growing demand for vertical industry applications and inference needs, which is expected to sustain capital expenditures [4][14]. - Impact of H20 Ban: The H20 ban has accelerated training demand within the domestic data center industry, with companies like Century Internet raising their annual performance guidance, and significant improvements in revenue and profit forecasts from optical module companies [1][5]. - Profitability Improvement: In Q2, domestic computing power profitability improved significantly, with Ruijie Network's quarterly profit growth ranging from 93% to 160%, and StarNet Ruijie's growth between 21% and 74% [1][5]. Key Industry Trends - White Box Switches: The rise of data center white box switches is meeting the customization needs of internet companies, with Ruijie and Unisoc leading the domestic market, while traditional brands like Cisco are losing their competitive edge [1][7]. - High Sales and R&D Expenses: Ruijie Network's sales expense ratio is 15.5% and R&D expense ratio is 16%, attributed to the need for channel establishment and high customization in their switching business [3][9][10]. - Market Challenges: The domestic computing power market faces challenges due to the H20 ban leading to reduced capital expenditures, with major companies like Alibaba and Tencent reporting lower capital spending [12]. Future Outlook - Positive Market Trends: The domestic computing power market is expected to improve, with indicators such as the rapid increase in Google TOKEN consumption and optimistic performance guidance from Oracle, Broadcom, and Marvell [14]. - Performance Predictions: Ruijie Network is projected to generate approximately 11.6 billion RMB in revenue in 2024, with a significant portion of profits expected from its data center switching business [9][15]. - Investment Recommendations: There is a suggestion to focus on investing in early performers in the domestic computing power sector, such as StarNet Ruijie and Ruijie Network, due to their favorable valuation compared to peers [15].