Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company has shown significant revenue growth driven by the automotive sector and AIoT, with a revenue increase of 15.42% year-on-year in the first half of 2025 [8] - The semiconductor design revenue reached 115.72 billion yuan, accounting for 83.01% of total revenue, with a year-on-year growth of 11.08% [8] - The automotive segment, particularly image sensors, has become a major growth driver, with revenue from automotive products increasing by 30.04% year-on-year [8] - The company is expected to achieve revenues of 308.06 billion yuan, 376.89 billion yuan, and 441.79 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding net profits of 42.85 billion yuan, 56.58 billion yuan, and 73.75 billion yuan [8] Financial Performance Summary - In the first half of 2025, the company reported a revenue of 139.56 billion yuan and a net profit of 20.28 billion yuan, reflecting a year-on-year increase of 15.42% and 48.34% respectively [8] - The projected earnings per share (EPS) for 2025 is 3.55 yuan, with a price-to-earnings (PE) ratio of 40.3 [7] - The return on equity (ROE) is expected to improve to 15.5% by 2025, indicating enhanced profitability [7] Revenue and Profit Forecast - The company forecasts a revenue growth rate of 19.7% for 2025, followed by 22.3% in 2026 and 17.2% in 2027 [7] - The net profit growth rate is projected at 28.9% for 2025, 32.1% for 2026, and 30.3% for 2027 [7] - The company anticipates a steady increase in operating income, with a gross margin expected to reach 30.9% by 2025 [9]

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Semiconductor Sector in China - **Recent Performance**: The A-share semiconductor sector experienced a rally of 13% last week, outperforming the CSI300 index by the same percentage in August [1][3] Core Insights and Arguments - **Drivers of Rally**: 1. Launch of DeepSeek's V3.1 model, which supports next-generation local AI chips [1][3] 2. China Mobile's announcement of a supplier list for its Rmb5 billion AI server tender [1][3] 3. Strong wafer fab equipment (WFE) imports in July, which increased by approximately 14% year-on-year and 11% month-on-month [3] - **Valuation Expectations**: - The semiconductor sector is expected to undergo a re-rating, with a preference for local AI, China WFE, and Apple supply chain stocks due to positive catalysts [1][3] - Current trading levels are about 20% above historical average price-to-earnings ratios (PER), but WFE and Apple supply chain stocks are trading at 0.5 standard deviations below average [3] - **Investment Preferences**: - Favorable outlook on server companies like Huaqin and Inspur within the local AI supply chain [3] - Preference for leading WFE companies such as AMEC and Apple supply chain players like Cowell and Luxshare [3] - Caution advised on Android smartphone component suppliers due to sub-seasonal demand in the second half of 2025 [3] Additional Important Information - **China Mobile's AI Server Tender**: - The tender includes various packages with specific volumes and candidate suppliers, indicating a strong demand for indigenous AI solutions [4] - Notable allocations include H3C and ZTE dominating several packages, with Inspur securing 100% of one package [4] - **WFE Import Data**: - The increase in WFE imports is seen as a positive indicator for the demand in China, with expectations of flat to single-digit growth year-on-year driven by advanced memory and logic capacity expansions [3][10] - **Market Dynamics**: - Despite the overall positive sentiment, there is caution regarding semiconductor price hikes from foundries and integrated device manufacturers (IDMs) [3] - **Performance of A-share WFE Names**: - A-share WFE companies have underperformed compared to tech and semiconductor indices year-to-date, despite guidance for 30-50% sales growth [3] This summary encapsulates the key points discussed in the conference call, focusing on the semiconductor sector's performance, investment preferences, and market dynamics.

Core Viewpoint - The article discusses the transformation of Weir Shares into Haowei Group, highlighting its strategic shift from consumer electronics to the automotive sector, particularly in the field of vehicle-mounted visual chips, amidst the backdrop of domestic substitution trends in the semiconductor industry [1][4][11]. Group 1: Company Transformation - Haowei Group, formerly known as Weir Shares, has transitioned from being a cyclical player in consumer electronics to a leader in the vehicle-mounted visual chip market, capitalizing on the growth of smart vehicles [4][6]. - The company has achieved significant revenue growth from the automotive sector, with income from this market reaching 5.905 billion yuan, a year-on-year increase of 29.85%, accounting for over 30% of its total revenue from image sensor solutions [5][7]. - The shift to automotive applications is seen as a key driver for Haowei's valuation transition from a cyclical stock to a growth stock, as it moves into a high-barrier, long-cycle market [4][7]. Group 2: Strategic Support - The company's success is attributed to three main factors: substantial investment in R&D to strengthen its technological capabilities, strategic acquisitions to fill technology gaps and capture market share, and diversification into multiple business lines to mitigate risks associated with consumer electronics cycles [2][4]. - Haowei's acquisition of Beijing Haowei in 2019 was a pivotal move that allowed it to quickly enhance its technological capabilities and market presence [2][9]. Group 3: Financial Performance - Haowei Group's financial results reflect its business transformation, with a reported revenue growth of 13.49% to 15.97% year-on-year in the first half of the year, and a net profit increase of 39.43% to 49.67% [7][11]. - The company has maintained a market share of nearly 30% in the domestic vehicle-mounted CIS sector, benefiting from its advanced technology and competitive advantages [6][11]. Group 4: Challenges and Concerns - Despite its growth, Haowei faces challenges, including high levels of share pledges by its controlling shareholder, which may threaten control stability and raise concerns about financial health [11][12]. - The company's R&D expenditure has shown volatility and a declining rate, which could impact its competitive edge in the rapidly evolving automotive chip market [13][14]. - There is a notable disparity between the increase in executive compensation and R&D investment, raising questions about the allocation of resources and potential impacts on market trust [15].

Group 1 - The completion of the main structure of the R&D and Offshore Trade Center project by Haowei Group marks a significant milestone, transitioning the project into the installation phase [1] - The project team has adopted a rigorous approach to ensure high-quality construction, overcoming various challenges such as complex geological conditions and intricate structural connections [1] - The main tower utilizes a "concrete core tube + steel structure outer frame" system, with innovative techniques employed to ensure precision in construction and stability of the structure [1] Group 2 - The R&D and Offshore Trade Center covers an area of approximately 22,000 square meters, with a total construction area of about 100,000 square meters, focusing on the integrated circuit industry [4] - The project aims to provide high-end R&D space for leading enterprises in the industry, facilitating technological breakthroughs and industrial upgrades [4] - The establishment of the offshore trade platform will enhance international business expansion and contribute to the integrated circuit industry chain ecosystem in the Lingang New Area [4] Group 3 - The A4 Activity Center employs a mixed structure of concrete, steel, and wood, enhancing aesthetic appeal and sustainability while achieving ultra-low energy consumption [2] - Advanced software tools like Tekla and Rhino were utilized for precise detailing and assembly, ensuring the successful integration of different structural elements [2]

Group 1: Postal Savings Bank of China - The bank achieved a net profit of 49.23 billion yuan in the first half of 2025, a year-on-year increase of 0.85% [1] - Operating income reached 179.45 billion yuan, reflecting a growth of 1.50% compared to the previous year [2] - Non-interest income contributed significantly, with intermediary business income increasing by 11.59% to 16.92 billion yuan, and other non-interest income rising by 25.16% to 23.47 billion yuan [1][2] Group 2: BeiGene - The company reported a revenue of 17.52 billion yuan in the first half of 2025, marking a 46.03% increase year-on-year [3] - The net profit attributable to shareholders was 450 million yuan, indicating a turnaround from losses in the previous year [3] Group 3: United Imaging Healthcare - The company achieved an operating income of 6.02 billion yuan, a 12.79% increase year-on-year [5] - Net profit attributable to the parent company was 998 million yuan, reflecting a growth of 5.03% [5] Group 4: Great Wall Motors - The company reported an operating income of 923.35 billion yuan, a slight increase of 0.99% year-on-year [7] - Net profit attributable to shareholders decreased by 10.21% to 63.37 billion yuan, with a significant drop in net profit excluding non-recurring items by 36.39% [7][8] Group 5: Pien Tze Huang - The company experienced a decline in net profit by 17.18%, with total revenue falling by 4.81% to 53.79 billion yuan [10][11] Group 6: China Railway Construction - The company reported a revenue of 489.20 billion yuan, a decrease of 5.22% year-on-year [12] - Net profit attributable to shareholders fell by 10.09% to 107.01 billion yuan [12][14] Group 7: China Shipbuilding Industry - The company achieved a revenue of 403.25 billion yuan, an increase of 11.96% year-on-year [23] - Net profit attributable to shareholders surged by 108.59% to 29.46 billion yuan, driven by improved order structure and ship prices [23][26] Group 8: ST Huato - The company reported a revenue of 172 billion yuan, reflecting an 85.5% increase year-on-year [29] - Net profit attributable to shareholders was 26.56 billion yuan, a growth of 129.33% [29] Group 9: Guotai Junan Securities - The company achieved total revenue of 454.32 billion yuan, a significant increase of 105.18% [31] - Net profit attributable to shareholders rose by 213.74% to 157.37 billion yuan [31][33] Group 10: Minsheng Bank - The bank reported an operating income of 723.84 billion yuan, a year-on-year increase of 7.83% [35] - Net profit attributable to shareholders decreased by 4.87% to 213.80 billion yuan [35][36]

Group 1 - The company reported a revenue of 13.956 billion yuan for the first half of 2025, representing a year-on-year growth of 15.42% [1] - The net profit attributable to shareholders reached 2.028 billion yuan, showing a year-on-year increase of 48.34% [1] - The net profit excluding non-recurring items was 1.951 billion yuan, which is a year-on-year growth of 42.21% [1] - The basic earnings per share stood at 1.69 yuan [1]

Company Overview - OmniVision Integrated Circuits Group, Inc. is a leading Fabless semiconductor company primarily engaged in chip design, recognized as one of the top ten Fabless semiconductor companies globally [4][5]. - The company operates in the semiconductor design and sales business, focusing on image sensor solutions, display solutions, and analog solutions [5][8]. Financial Performance - For the first half of 2025, the company reported a revenue of approximately 13.96 billion RMB, representing a year-on-year increase of 15.42% [3]. - The total profit for the same period was approximately 2.19 billion RMB, up 45.88% from the previous year [3]. - The net profit attributable to shareholders was around 2.03 billion RMB, reflecting a growth of 48.34% compared to the previous year [3]. Industry Context - The global semiconductor market reached a size of 346 billion USD in the first half of 2025, showing a year-on-year growth of 18.9% [6]. - The demand for image sensors has been particularly strong, driven by applications in data centers and AI, with a growth rate of 16% in this segment [6]. - The semiconductor market is projected to reach 728 billion USD in 2025, with a growth rate of 15.4% [6]. Business Model - The company follows a Fabless model, outsourcing wafer manufacturing and packaging testing to specialized foundries and testing companies [5][7]. - It collaborates with leading foundries and testing firms to ensure stable product supply and quality [7]. Product Offerings - The company's product portfolio includes CMOS image sensors, micro-image module packaging, and various display and analog solutions [8][11]. - Key applications for these products span across consumer electronics, automotive, medical, and industrial sectors [11][12]. Market Trends - The automotive image sensor market is experiencing significant growth, driven by increasing safety regulations and technological advancements [12][13]. - The demand for advanced imaging solutions in smartphones is rising, with consumers seeking high-quality imaging capabilities [11][12]. - Emerging markets for smart imaging devices, such as action cameras and panoramic cameras, are expanding due to advancements in sensor technology [15][16].

Company Announcements - SMIC plans to issue A-shares to acquire minority stakes in its subsidiary, SMIC North, leading to a temporary suspension of its stock trading for up to 10 trading days [1] - Huasheng Tiancheng's director and supervisor plan to reduce their holdings by up to 0.9984% of the total shares [2] - BYD reported a net profit of 15.51 billion yuan for the first half of the year, a year-on-year increase of 13.79% [2] - Changfei Fiber's net profit for the first half of the year was 296 million yuan, down 21.71% year-on-year [2] - Jia Yuan Technology plans to invest 500 million yuan to acquire part of the equity in Endatong, focusing on the optical module industry [1][17] - Guizhou Moutai completed the repurchase of 3.9276 million shares [1][19] Financial Performance - CEC reported a net profit of 24.641 billion yuan for the first half of the year, a decrease of 12% year-on-year [5] - Longjiang Power achieved a net profit of 13.056 billion yuan, up 14.86% year-on-year [8] - China Rare Earth reported a net profit of 162 million yuan, turning from a loss of 244 million yuan in the previous year [9] - Huayi Brothers' net profit increased by 48.34% to 2.028 billion yuan [6] - Wealth Trend's net profit grew by 6.61% year-on-year [24] Mergers and Acquisitions - Tailin Micro plans to acquire 100% of Panqi Micro's equity through a combination of cash and stock issuance [4] - Aishen Medical announced the acquisition of partial equity in three medical institutions for a total of 105 million yuan [18] Stock Movements - Guizhou Moutai's controlling shareholder plans to increase its stake by 3 to 3.3 billion yuan [15] - Ganfeng Lithium plans to invest 4 billion yuan to build a new lithium-ion battery manufacturing base [16] Market Developments - China National Offshore Oil Corporation won a bid for a project in Qatar worth approximately 4 billion USD [14] - Aishen Medical's acquisition of equity in medical institutions aims to enhance its service coverage and operational efficiency [18]

[Part I Definitions](index=5&type=section&id=Part%20I%20Definitions) This section provides a comprehensive glossary of key terms and abbreviations used throughout the report, ensuring clarity and consistent understanding of the disclosed information [Definitions of Common Terms](index=5&type=section&id=Definitions%20of%20Common%20Terms) This chapter provides definitions for key terms and abbreviations used in the report, covering company names, bond codes, product technologies (e.g., GDR, ADAS, CMOS, TDDI, PMIC), and business models (Fabless, ODM, OEM), ensuring clear understanding of the report content - The reporting period refers to January 1, 2025, to June 30, 2025[13](index=13&type=chunk) Definitions of Common Terms | Common Term | Definition | | :--- | :--- | | OmniVision Group/Company/Will Semiconductor | OmniVision Integrated Circuit (Group) Co., Ltd., formerly known as Shanghai Will Semiconductor Co., Ltd. | | Will Convertible Bonds | Convertible corporate bonds, with bond abbreviation "Will Convertible Bonds" and bond code "113616" | | GDR | Global Depositary Receipts | | ADAS | Advanced Driver-Assistance Systems | | CMOS | Complementary Metal Oxide Semiconductor Image Sensor | | TDDI | Touch and Display Driver Integration | | PMIC | Power Management Integrated Circuits | | Fabless | A business model without wafer fabrication plants, solely engaged in integrated circuit R&D design and sales | | ODM | Original Design Manufacturer | | OEM | Original Equipment Manufacturer, a contract manufacturing model | [Part II Company Profile and Key Financial Indicators](index=7&type=section&id=Part%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's fundamental information and a summary of its key accounting data and financial performance for the reporting period [1. Company Information](index=7&type=section&id=1.%20Company%20Information) This section outlines the basic information of OmniVision Integrated Circuit (Group) Co., Ltd., including its Chinese name, abbreviation, foreign name, and legal representative, providing essential identification for investors - The company's Chinese name is OmniVision Integrated Circuit (Group) Co., Ltd., abbreviated as **OmniVision Group**[16](index=16&type=chunk) - The company's legal representative is **Wang Song**[16](index=16&type=chunk) [2. Contact Persons and Information](index=7&type=section&id=2.%20Contact%20Persons%20and%20Information) This section provides contact information for the company's Board Secretary and Securities Affairs Representative, including names, addresses, phone numbers, fax, and email, facilitating investor communication and information inquiries - The Board Secretary is **Ren Bing**, and the Securities Affairs Representative is **Zhou Shuyang**[17](index=17&type=chunk) - The company's contact address is No. 88 Shangke Road, Pudong New Area, Shanghai, with telephone number **021-50805043**[17](index=17&type=chunk) [3. Overview of Basic Information Changes](index=7&type=section&id=3.%20Overview%20of%20Basic%20Information%20Changes) This section details the company's registered address, office address, postal code, website, and email, noting that historical changes to the registered address are not applicable, indicating stable basic company information - The company's registered address is 7th Floor, Building C, No. 3000 Longdong Avenue, China (Shanghai) Pilot Free Trade Zone[18](index=18&type=chunk) - The company's website is **www.omnivision-group.com**[18](index=18&type=chunk) [4. Overview of Information Disclosure and Document Custody Location Changes](index=7&type=section&id=4.%20Overview%20of%20Information%20Disclosure%20and%20Document%20Custody%20Location%20Changes) This section specifies the designated newspapers for company information disclosure, the website address for semi-annual reports, and the report custody location, ensuring investors can timely access public company information - The company's selected newspapers for information disclosure are Shanghai Securities News, China Securities Journal, Securities Times, and Securities Daily[19](index=19&type=chunk) - The website address for publishing semi-annual reports is **www.sse.com.cn**[19](index=19&type=chunk) [5. Company Stock Overview](index=7&type=section&id=5.%20Company%20Stock%20Overview) This section provides the company's stock listing exchange, stock abbreviation, stock code, and previous stock abbreviation, facilitating investor identification and trading of company shares - The company's A-shares are listed on the Shanghai Stock Exchange, with stock abbreviation "**OmniVision Group**", stock code **603501**, and previous stock abbreviation "**Will Semiconductor**"[20](index=20&type=chunk) [7. Key Accounting Data and Financial Indicators](index=8&type=section&id=7.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section presents the company's key accounting data and financial indicators for the first half of 2025, showing significant year-on-year growth in operating revenue and net profit, with improved profitability and asset scale Key Accounting Data for H1 2025 | Key Accounting Data | Current Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | RMB 13.96 billion | RMB 12.09 billion | 15.42 | | Total Profit | RMB 2.19 billion | RMB 1.50 billion | 45.88 | | Net Profit Attributable to Listed Company Shareholders | RMB 2.03 billion | RMB 1.37 billion | 48.34 | | Net Profit Attributable to Listed Company Shareholders (Excluding Non-Recurring Gains/Losses) | RMB 1.95 billion | RMB 1.37 billion | 42.21 | | Net Cash Flow from Operating Activities | RMB 1.89 billion | RMB 1.82 billion | 3.66 | | Net Assets Attributable to Listed Company Shareholders (Period-End) | RMB 26.19 billion | RMB 24.20 billion | 8.23 | | Total Assets (Period-End) | RMB 42.48 billion | RMB 38.96 billion | 9.03 | Key Financial Indicators for H1 2025 | Key Financial Indicators | Current Period (Jan-Jun) | Prior Year Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 1.69 | 1.14 | 48.25 | | Diluted Earnings Per Share (RMB/share) | 1.68 | 1.14 | 47.37 | | Basic Earnings Per Share (Excluding Non-Recurring Gains/Losses) (RMB/share) | 1.63 | 1.14 | 42.98 | | Weighted Average Return on Net Assets (%) | 8.01 | 6.38 | Increased by 1.63 percentage points | | Weighted Average Return on Net Assets (Excluding Non-Recurring Gains/Losses) (%) | 7.71 | 6.41 | Increased by 1.30 percentage points | [9. Non-Recurring Gains and Losses Items and Amounts](index=9&type=section&id=9.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the company's non-recurring gains and losses items and their amounts for the first half of 2025, totaling **RMB 76.53 million**, primarily including government subsidies recognized in current profit or loss and fair value changes in financial assets Non-Recurring Gains and Losses Items and Amounts for H1 2025 | Non-Recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Gains or losses from disposal of non-current assets, including the reversal of impairment provisions already made | -0.36 million | | Government grants recognized in current profit or loss | 25.04 million | | Gains or losses from changes in fair value of financial assets and liabilities, and from disposal of financial assets and liabilities, excluding effective hedging activities related to normal business operations of non-financial enterprises | 64.92 million | | Gains or losses from debt restructuring | 0.06 million | | Other non-operating income and expenses apart from the above | 1.26 million | | Less: Income tax impact | 14.38 million | | Minority interest impact (after tax) | 0.01 million | | Total | 76.53 million | [Part III Management Discussion and Analysis](index=10&type=section&id=Part%20III%20Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's industry, business operations, core competencies, and financial performance during the reporting period, along with an outlook on potential risks and future strategies [1. Industry and Main Business Overview During the Reporting Period](index=10&type=section&id=1.%20Industry%20and%20Main%20Business%20Overview%20During%20the%20Reporting%20Period) This section elaborates on the company's industry position as a Fabless chip design company, global and Chinese semiconductor industry trends, its Fabless business model, three core business systems (image sensor, display, and analog solutions), and their wide applications in smartphones, automotive, emerging markets, medical, and security - The company is one of the **top ten global Fabless semiconductor companies**, with main businesses covering image sensor, display, and analog solutions[28](index=28&type=chunk) - In the first half of 2025, the global semiconductor market reached **USD 346 billion**, growing by **18.9% year-on-year**, with strong growth in logic, memory, and sensor sectors[30](index=30&type=chunk) - China's integrated circuit imports increased by **8.9% year-on-year** in the first half, while exports grew by **20.6% year-on-year**[30](index=30&type=chunk) - The company adopts a **Fabless model**, focusing on R&D design and sales, with wafer manufacturing and packaging/testing outsourced to professional manufacturers[31](index=31&type=chunk) [(I) Company's Industry](index=10&type=section&id=(I)%20Company's%20Industry) The company's industry is classified as Computer, Communication and Other Electronic Equipment Manufacturing (C39) according to both the 'National Economic Industry Classification and Codes' and the CSRC's 'Guidelines for Industry Classification of Listed Companies' - The company operates in the Computer, Communication and Other Electronic Equipment Manufacturing (C39) industry[29](index=29&type=chunk) [(II) Industry Development](index=10&type=section&id=(II)%20Industry%20Development) The global semiconductor market achieved **18.9% strong growth** in the first half of 2025, with an anticipated **15.4% full-year growth**, primarily driven by data center and AI applications; China's semiconductor import and export trade also maintained a positive trend, with import volume increasing by **8.9%** and export volume by **20.6%** Global Semiconductor Market Data for H1 2025 | Indicator | Data | | :--- | :--- | | Market Size | USD 346 billion | | Year-on-Year Growth | 18.9% | | Strong Growth Areas | Logic, Memory, Sensors (16%) | | Growth Areas | Analog Chips, Microcontrollers (4%) | | Declining Areas | Discrete Devices, Optoelectronics (single-digit decline) | China's Integrated Circuit Import and Export Data for H1 2025 | Indicator | Import | Export | | :--- | :--- | :--- | | Cumulative Volume | 281.9 billion units (up 8.9% YoY) | 167.8 billion units (up 20.6% YoY) | | Import/Export Value | RMB 1.38 trillion (up 8.3% YoY) | RMB 650.3 billion (up 20.3% YoY) | [(III) Company Business Model](index=11&type=section&id=(III)%20Company%20Business%20Model) The company's semiconductor design and sales business operates on a **Fabless model**, focusing on R&D design and sales, with wafer manufacturing and packaging/testing outsourced. Sales models include direct sales and distribution to meet diverse customer needs. The company's products span three major systems: image sensor, display, and analog solutions, and it also distributes various electronic components - The company's semiconductor design and sales business adopts a **Fabless model**, focusing solely on integrated circuit R&D design and sales, with wafer manufacturing and packaging/testing outsourced[31](index=31&type=chunk) - The company sells through both **direct sales and distribution**, with direct sales serving module, ODM, and OEM manufacturers and end customers, and distribution through renowned multinational large distributors[33](index=33&type=chunk) - The company's semiconductor product design business primarily comprises three major systems: **image sensor solutions, display solutions, and analog solutions**[34](index=34&type=chunk) Company Semiconductor Design Business Product Types | Business | Product Name | Main Function | Application Areas | | :--- | :--- | :--- | :--- | | Image Sensor Solutions | CMOS Image Sensor | Converts optical information into electrical signals | Consumer electronics, security, automotive electronics, medical, emerging markets | | | CameraCubeChip | Integrates wafer-level optics and CMOS image sensors | Medical, emerging markets, etc. | | | LCOS | Reflective mode, very small matrix liquid crystal display device | Automotive electronics, medical, emerging markets, laptops, etc. | | Display Solutions | TDDI | Drives LCD screens, detects user touch signals | Smartphones | | | DDIC | Drives displays and controls drive current | Smartphones | | | TED | Combines eDP TCON and source driver | Laptops | | Analog Solutions | TVS, MOSFET, LDO, DC-DC, LED Backlight Driver, CAN, LIN, SBC, SerDes, MCU, Motor Driver, Operational Amplifier | Enhances anti-static/surge protection, signal amplification, power control, voltage regulation, voltage adjustment, constant current source, signal switching, communication networks, integrated power/communication/diagnosis/safety monitoring, high-speed communication, smart semiconductor chips, motor control, amplifiers, etc. | Consumer electronics, security, network communication, automotive electronics, industrial, IoT, etc. | Company Distribution Business Product Types | Product Name | Sub-Products | Main Original Manufacturers | | :--- | :--- | :--- | | Electronic Components | Resistors, capacitors, inductors, crystals, etc. | Panasonic, Chicony, Yageo, Samsung, Walsin Technology, Holy Stone, TXC, etc. | | Structural Components | Connectors, card holders, card trays, PCBs, speakers, electrets, etc. | Molex, Panasonic, Nanya, Goertek, etc. | | Electromechanical Systems | Servos, motors, fans, PLCs, etc. | Panasonic, NIDEC, Delta, etc. | | Integrated Circuits | Chips, Sensors, Memory, Flash, Sensors, Diodes/Transistors, etc. | Lite-On, Longsys, XMC, Quantum Micro, Jinglue, Rongpai, Lisenme, Xinsheng, Qianhai Weisheng, Hailichuang, Aixin, Jiutian Ruixin, Nationz, BOSCH, Fourier, Yichong, etc. | | RF Devices | Filters, etc. | Panasonic, ACX, Jiali, Huaying, Xinpu, Walsin Technology, etc. | [(IV) Main Applications of Company Products](index=14&type=section&id=(IV)%20Main%20Applications%20of%20Company%20Products) The company's image sensor, display, and analog solutions are widely applied in smartphones, automotive, emerging markets (sports/panoramic cameras, smart glasses, machine vision), medical, and security sectors, meeting industry demands for high-performance, low-power, and high-resolution chips through continuous technological innovation - Smartphone Market: The company offers high-resolution image sensors (e.g., **OV50H, OV50X**) and **TDDI technology**; newly developed **OLED DDIC products** have received test approval from leading Chinese panel suppliers, and analog products address power density and power management needs[43](index=43&type=chunk) - Automotive Market: Image sensor solutions are applied in **ADAS, autonomous driving, and cabin monitoring**, featuring split-pixel technology for LED flicker suppression and HALE combination algorithms. **LCOS products** enable HUD applications, and the company expands its automotive analog chip portfolio (e.g., **SerDes, PMIC, MCU, SBC**)[44](index=44&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) - Emerging Markets: Image sensor products provide high image quality and stability for **sports/panoramic cameras**. **LCOS technology** offers single-chip display solutions for smart glasses, while **CIS integrated NPU technology** addresses real-time performance, power consumption, privacy, and size challenges for smart glasses. A machine vision department has been established, focusing on innovative solutions for industrial automation and robotics[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - Medical Market: Provides complete end-to-end medical imaging subsystems, meeting demands for minimally invasive diagnostic and therapeutic surgeries, with **CMOS image sensors** gradually replacing traditional CCDs[53](index=53&type=chunk)[54](index=54&type=chunk) - Security Market: **Nyxel® near-infrared technology** enables security cameras to see clearer and further in low light, while also offering energy-efficient power management and interface protection products[55](index=55&type=chunk) - Laptop Market: Offers first-class imaging system solutions, including new technologies like **infrared global shutter sensors and RGB-IR**, for security applications such as eye tracking, facial/iris recognition[56](index=56&type=chunk) [2. Discussion and Analysis of Operations](index=18&type=section&id=2.%20Discussion%20and%20Analysis%20of%20Operations) During the reporting period, the company benefited from the structural recovery of the global semiconductor industry and the integration of AI technology, achieving **15.49% growth in operating revenue** and **48.34% growth in net profit**. The image sensor business performed outstandingly in automotive intelligent driving and emerging markets, while the analog solutions business also saw significant growth. The company continued to increase R&D investment, optimize its supply chain, and actively enhance shareholder returns and sustainable development - In the first half of 2025, the company's main business revenue was **RMB 13.94 billion**, a **15.49% year-on-year increase**[60](index=60&type=chunk) - Semiconductor design business product sales revenue was **RMB 11.57 billion**, accounting for **83.01% of main business revenue**, a **11.08% year-on-year increase**[60](index=60&type=chunk) - Semiconductor distribution business revenue was **RMB 2.31 billion**, accounting for **16.60% of main business revenue**, a **41.73% year-on-year increase**[60](index=60&type=chunk) - Net profit attributable to parent company shareholders was **RMB 2.03 billion**, a **48.34% year-on-year increase**[127](index=127&type=chunk) [1. Image Sensor Solutions](index=19&type=section&id=1.%20Image%20Sensor%20Solutions) The image sensor solutions business achieved **RMB 10.35 billion** in operating revenue in the first half, a **11.10% year-on-year increase**. Revenue from image sensors in automotive intelligent driving and emerging markets (sports/panoramic cameras, smart glasses, machine vision) grew significantly, while the smartphone market saw a decline due to the end-of-life cycle of older products, though new products have been validated and introduced by customers - The image sensor solutions business achieved operating revenue of **RMB 10.35 billion** in the first half of 2025, accounting for **74.21% of main business revenue**, an **11.10% increase** year-on-year[61](index=61&type=chunk) - Automotive market image sensor revenue was approximately **RMB 3.79 billion**, a **30.04% year-on-year increase**, solidifying its leading position[67](index=67&type=chunk) - Smartphone market image sensor revenue was approximately **RMB 3.92 billion**, a **19.48% decrease** year-on-year, primarily due to the end-of-life cycle of the older **OV50H product**[68](index=68&type=chunk) - The company's newly launched **50-megapixel 1-inch high dynamic range image sensor OV50X** has entered mass production and delivery, and **200-megapixel image sensor products** have been validated and introduced by customers[69](index=69&type=chunk)[70](index=70&type=chunk) - Emerging market image sensor revenue was approximately **RMB 1.17 billion**, achieving a **249.42% year-on-year increase**, primarily driven by growth in sports/panoramic cameras, smart glasses, and machine vision sectors[74](index=74&type=chunk) - Security market image sensor revenue was approximately **RMB 0.83 billion**, a **16.77% year-on-year increase**. Medical market revenue was approximately **RMB 0.44 billion**, a **68.10% year-on-year increase**[75](index=75&type=chunk) [2. Display Solutions](index=21&type=section&id=2.%20Display%20Solutions) The display solutions business achieved **RMB 0.46 billion** in operating revenue in the first half, a **2.60% year-on-year decrease**, primarily due to pricing pressure in the mobile LCD-TDDI market. Despite a slight revenue decline, the company achieved a **7.03% steady increase in shipments** and significant gross margin improvement through product supply chain optimization and expansion into high-margin products. **OLED DDIC and TED products** have been successfully introduced to tier-one customers - The display solutions business achieved operating revenue of **RMB 0.46 billion** in the first half of 2025, a **2.60% decrease** year-on-year[77](index=77&type=chunk) - The display solutions business achieved sales volume of **72.56 million units**, a **7.03% increase** year-on-year, with steady market share growth[77](index=77&type=chunk) - The company's **OLED DDIC products** have been successfully introduced to tier-one panel manufacturers and are in mass production, while **TED chips** have been adopted by leading global laptop brands[77](index=77&type=chunk)[78](index=78&type=chunk) - Automotive **TDDI products** have been validated and introduced by customers[78](index=78&type=chunk) [3. Analog Solutions](index=22&type=section&id=3.%20Analog%20Solutions) The analog solutions business achieved **RMB 0.77 billion** in operating revenue in the first half, a **20.88% year-on-year increase**, primarily benefiting from inventory destocking and demand recovery in the consumer electronics industry. The company completed a multi-category layout in automotive analog chips, with automotive analog IC revenue growing by **45.51% year-on-year**, becoming a new growth driver - The analog solutions business achieved operating revenue of **RMB 0.77 billion** in the first half of 2025, a **20.88% increase** year-on-year[79](index=79&type=chunk) - Automotive analog ICs achieved operating revenue of **RMB 0.12 billion**, accounting for **15.66% of analog solutions business**, a **45.51% increase** year-on-year[79](index=79&type=chunk) - The company completed a multi-category layout in automotive analog chips, including **SerDes, PMIC, and MCU** for high-speed transmission scenarios in intelligent driving/cockpit systems[79](index=79&type=chunk) [(II) Continuous Increase in R&D Investment to Drive Product Innovation and Upgrades](index=23&type=section&id=(II)%20Continuous%20Increase%20in%20R%26D%20Investment%20to%20Drive%20Product%20Innovation%20and%20Upgrades) During the reporting period, the company's semiconductor design and sales business R&D investment reached **RMB 1.72 billion**, a **9.01% year-on-year increase**, accounting for **14.90% of the business revenue**. The company highly values independent intellectual property and talent development, holding **4,761 authorized patents** as of the end of the reporting period, and successfully mass-producing high-performance image sensors like **OV50X** - The company's semiconductor design and sales business R&D investment amounted to approximately **RMB 1.72 billion**, accounting for **14.90% of the business revenue**, a **9.01% increase** year-on-year[80](index=80&type=chunk) - As of the end of the reporting period, the company held **4,761 authorized patents**, including **4,552 invention patents**[80](index=80&type=chunk) - The company's launched **OV50X** is a **50-megapixel sensor** with ultra-high dynamic range, capable of cinematic video recording, and has entered mass production[81](index=81&type=chunk) [(III) Fruitful Achievements in Automotive Intelligent Driving, Opening New Growth Curves](index=23&type=section&id=(III)%20Fruitful%20Achievements%20in%20Automotive%20Intelligent%20Driving%2C%20Opening%20New%20Growth%20Curves) The company achieved fruitful results in automotive intelligent driving, launching several market-competitive new products, including automotive image sensors based on **TheiaCel™ technology** and the **OX01N1B sensor** for driver monitoring systems. Concurrently, the company expanded its automotive solutions horizontally, introducing high-performance **MCU OMX2x4B**, **2Gbps SerDes series products**, and high-performance automotive intelligent high-side switch chip **ONXQ000**, empowering comprehensive automotive solutions - The company utilized **TheiaCel™ technology** to solve LED traffic light flicker issues and achieve wide dynamic range in single-exposure HDR images, successfully entering the **NVIDIA supply chain**[82](index=82&type=chunk) - Launched the in-cabin driver monitoring system (DMS) **OX01N1B image sensor**, featuring industry-leading near-infrared quantum efficiency and low power consumption[84](index=84&type=chunk) - Introduced high-performance **MCU OMX2x4B**, suitable for intelligent cockpits and body domain control scenarios[86](index=86&type=chunk) - Launched new **2Gbps SerDes series products OTX9211 and OTX9342**, which have secured project nominations from multiple domestic automakers and Tier1 suppliers[86](index=86&type=chunk)[87](index=87&type=chunk) - Introduced high-performance automotive intelligent high-side switch chip **ONXQ000**, expected to enter mass production in Q3 2025[88](index=88&type=chunk) [(IV) Strengthening Supply Chain Collaboration to Enhance Overall Operational Efficiency](index=25&type=section&id=(IV)%20Strengthening%20Supply%20Chain%20Collaboration%20to%20Enhance%20Overall%20Operational%20Efficiency) The company strengthened cooperation with wafer fabs and packaging/testing plants, and transferred some mature products to local wafer fabs, ensuring stable capacity and cost control. Concurrently, the company coordinated development strategies across business segments, leveraging synergies to provide comprehensive solutions to customers, thereby enhancing overall operational efficiency and competitiveness - The company maintained deep cooperation with wafer fabs and packaging plants, and transferred some mature products to local wafer fabs, ensuring capacity needs and improving production efficiency[89](index=89&type=chunk) - The company's product lines share high consistency in end customers, providing comprehensive solutions through synergistic development to enhance business scale and competitiveness[89](index=89&type=chunk) [(V) Convertible Bond Fundraising Project Completion, Remaining Funds Permanently Supplement Working Capital](index=25&type=section&id=(V)%20Convertible%20Bond%20Fundraising%20Project%20Completion%2C%20Remaining%20Funds%20Permanently%20Supplement%20Working%20Capital) The company's convertible bond fundraising project was fully completed and closed in 2024, with remaining raised funds of **RMB 382.14 million** (including interest income) permanently supplementing working capital to maximize the efficiency of fund utilization, aligning with the company's operational development needs and shareholder interests - The company's convertible bond fundraising project was fully completed and closed in 2024[90](index=90&type=chunk) - The company has transferred a cumulative **RMB 382.14 million** (including interest income) from its special fundraising account to other company accounts to permanently supplement working capital, and completed the closure of relevant special fundraising accounts[91](index=91&type=chunk) [(VI) Continuously Optimizing Talent Development and Incentive Mechanisms to Stabilize Team Cohesion](index=26&type=section&id=(VI)%20Continuously%20Optimizing%20Talent%20Development%20and%20Incentive%20Mechanisms%20to%20Stabilize%20Team%20Cohesion) Adhering to a 'people-oriented' principle, the company continuously optimized its talent development and incentive mechanisms by providing a diverse workplace, competitive salaries, training resources, and career development opportunities. During the reporting period, the 2025 stock option incentive plan was implemented, granting **19,983,400 stock options** to **3,361 incentive recipients** to stabilize the core team and share development achievements - The company continuously improved its talent training system through the **OV-Learning online training platform**[92](index=92&type=chunk) - During the reporting period, the company implemented the **2025 stock option incentive plan**, completing the registration of **19,983,400 stock options** for **3,361 incentive recipients**[93](index=93&type=chunk) [(VII) Enhancing Shareholder Returns and Consolidating Market Trust](index=26&type=section&id=(VII)%20Enhancing%20Shareholder%20Returns%20and%20Consolidating%20Market%20Trust) The company highly values investor returns, enhancing shareholder value by canceling repurchased shares and continuously promoting multiple cash dividends annually. During the reporting period, the 2024 annual equity distribution was completed, with a cash dividend of **RMB 2.20 (tax inclusive) per 10 shares**, totaling **RMB 264 million**, and the Board of Directors was authorized to formulate the 2025 interim profit distribution plan - The company has canceled **11,213,200 repurchased shares**, with a corresponding reduction in registered capital[94](index=94&type=chunk) - The company completed the 2024 annual equity distribution on August 1, 2025, distributing a cash dividend of **RMB 2.20 (tax inclusive) per 10 shares**, totaling **RMB 264 million**[94](index=94&type=chunk) - The company's general meeting of shareholders has authorized the Board of Directors to determine the 2025 interim profit distribution plan, continuing to implement multiple cash dividends annually[94](index=94&type=chunk) [(VIII) Implementing Science-Based Carbon Targets to Deepen Company's Sustainable Development](index=26&type=section&id=(VIII)%20Implementing%20Science-Based%20Carbon%20Targets%20to%20Deepen%20Company's%20Sustainable%20Development) The company established a three-tier ESG governance structure, committed to achieving a win-win for economic and social responsibilities. During the reporting period, its subsidiary, OmniVision Technologies, Inc., formulated and received SBTi approval for its near-term, long-term, and net-zero science-based carbon targets based on the latest greenhouse gas accounting system, deepening the company's commitment to sustainable development - The company established a three-tier ESG governance structure comprising the Board of Directors, ESG Committee, and ESG Working Group[96](index=96&type=chunk) - The near-term, long-term, and net-zero science-based carbon targets of its subsidiary, **OmniVision Technologies, Inc.**, were approved by **SBTi** during the reporting period[96](index=96&type=chunk) [3. Analysis of Core Competencies During the Reporting Period](index=27&type=section&id=3.%20Analysis%20of%20Core%20Competencies%20During%20the%20Reporting%20Period) The company's core competencies include strong R&D capabilities, leading core technologies (e.g., **CMOS image sensors, LCOS, TDDI, power management chips**), global brand recognition, extensive product lines, a flexible **Fabless business model**, stable supply chain and customer advantages, and a highly qualified sales, service, and talent team - R&D Capability Advantage: The company's semiconductor design and sales business invested **RMB 1.72 billion** in R&D, accounting for **14.90% of revenue**, and holds **4,761 authorized patents**[97](index=97&type=chunk) - Core Technology Advantage: Significant technological advantages accumulated in **CMOS image sensor circuit design, packaging, and digital image processing**, including **BSI, PureCel®Plus, RGB-Ir, TheiaCel™, CameraCubeChip®, LCOS, TDDI, discrete devices, and power management chips**[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - Brand Recognition Advantage: One of the **top three global CMOS image sensor suppliers**, with leading market shares in numerous niche markets[103](index=103&type=chunk) - Product Line Advantage: Extensive range and application of **CMOS image sensors**, covering smartphones, automotive electronics, medical, security, smart glasses, panoramic and sports cameras, and actively integrating into the 'AI+' technology wave[104](index=104&type=chunk) - Asset-Light Business Model Advantage: The **Fabless model** enables the company to be efficient and flexible, focusing on R&D design, and establishing long-term partnerships with mainstream foundries[105](index=105&type=chunk) - Supply Chain and Customer Advantage: Formed long-term partnerships with internationally renowned and domestically leading foundries, with products demonstrating synergistic effects[106](index=106&type=chunk) - Sales and Service Advantage: Possesses a highly skilled **FAE team** capable of rapidly introducing products to market and providing technical support[107](index=107&type=chunk) - Talent and Team Advantage: Boasts an R&D team rich in technological innovation and a high-caliber management team, with a stable core team over the long term[109](index=109&type=chunk) [4. Key Operating Performance During the Reporting Period](index=30&type=section&id=4.%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) This section analyzes the company's key operating performance during the reporting period, including reasons for financial statement item changes, asset and liability status, investment activities, and the operating performance of major controlled and associate companies. The company achieved growth in both operating revenue and total profit, maintained a stable asset-liability structure, conducted investment activities aligned with its development strategy, and its major subsidiaries operated well - Operating revenue increased by **15.42% year-on-year**, primarily due to the continuous penetration of image sensor products in automotive intelligent driving and sports camera application markets[110](index=110&type=chunk) - Total profit increased by **45.88% year-on-year**, and net profit attributable to listed company shareholders increased by **48.34% year-on-year**[22](index=22&type=chunk) - Net cash flow from operating activities increased by **3.66% year-on-year**, primarily due to increased cash received from sales of goods and provision of services[110](index=110&type=chunk)[111](index=111&type=chunk) - Net cash flow from investing activities decreased by **143.68% year-on-year**, primarily due to increased cash paid for the acquisition of fixed assets, intangible assets, and other long-term assets[110](index=110&type=chunk)[111](index=111&type=chunk) - Net cash flow from financing activities increased by **116.27% year-on-year**, primarily due to decreased cash paid for debt repayment[110](index=110&type=chunk)[111](index=111&type=chunk) [(I) Main Business Analysis](index=30&type=section&id=(I)%20Main%20Business%20Analysis) This section analyzes the changes in the company's main financial statement items, indicating that the growth in operating revenue and cost of sales was primarily influenced by expanded sales volume, while the improvement in gross margin resulted from product structure optimization and cost control. Financial expenses decreased due to increased interest income and exchange gains/losses, while R&D and selling expenses rose due to increased employee compensation Analysis Table of Changes in Financial Statement Items | Item | Current Period (RMB) | Prior Year Period (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 13.96 billion | 12.09 billion | 15.42 | | Cost of Sales | 9.70 billion | 8.57 billion | 13.24 | | Selling Expenses | 269.33 million | 264.08 million | 1.99 | | Administrative Expenses | 339.49 million | 340.71 million | -0.36 | | Financial Expenses | -6.41 million | 6.14 million | -204.39 | | R&D Expenses | 1.36 billion | 1.26 billion | 8.70 | | Net Cash Flow from Operating Activities | 1.89 billion | 1.82 billion | 3.66 | | Net Cash Flow from Investing Activities | -1.24 billion | -508.27 million | -143.68 | | Net Cash Flow from Financing Activities | 436.28 million | -2.68 billion | 116.27 | - The growth rate of cost of sales was lower than that of operating revenue, primarily due to factors such as product mix optimization and cost control, leading to an increase in the company's gross profit margin[111](index=111&type=chunk) - The change in financial expenses was mainly due to increased interest income and exchange gains/losses[111](index=111&type=chunk) [(III) Analysis of Assets and Liabilities](index=31&type=section&id=(III)%20Analysis%20of%20Assets%20and%20Liabilities) This section analyzes the changes in the company's assets and liabilities at period-end. Notes receivable, other receivables, long-term receivables, deferred income tax assets, and other non-current assets all showed significant growth, primarily reflecting increases in bank acceptance bills, temporary payments, overseas tax refunds, unrealized profits from internal transactions, and prepayments for equipment. On the liability side, short-term borrowings, accounts payable, non-current liabilities due within one year, and other current liabilities also increased substantially, mainly due to increased bank borrowings, quarterly procurement fluctuations, and maturing long-term borrowings. Overseas assets accounted for **60.50% of total assets**, primarily comprising Beijing OmniVision's overseas subsidiaries and OmniVision Display Solutions and its overseas subsidiaries Changes in Assets and Liabilities | Item Name | Period-End Amount (RMB) | Period-End % of Total Assets | Prior Year-End Amount (RMB) | Prior Year-End % of Total Assets | Period-End Change vs. Prior Year-End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Notes Receivable | 76.01 million | 0.18 | 24.40 million | 0.06 | 211.50 | Mainly due to an increase in the company's bank acceptance bills | | Other Receivables | 86.76 million | 0.20 | 57.80 million | 0.15 | 50.10 | Mainly due to an increase in the company's other temporary payments | | Long-Term Receivables | 9.90 million | 0.02 | 3.23 million | 0.01 | 206.35 | Mainly due to the company's receivables from overseas tax refunds | | Deferred Income Tax Assets | 635.25 million | 1.50 | 400.68 million | 1.03 | 58.54 | Mainly due to an increase in the company's unrealized profits from internal transactions | | Other Non-Current Assets | 316.28 million | 0.74 | 161.58 million | 0.41 | 95.74 | Mainly due to an increase in the company's prepayments for equipment | | Short-Term Borrowings | 1.58 billion | 3.71 | 1.09 billion | 2.79 | 45.12 | Mainly due to an increase in the company's bank borrowings in the current period | | Accounts Payable | 2.70 billion | 6.37 | 1.94 billion | 4.97 | 39.74 | Mainly due to quarterly procurement fluctuations | | Non-Current Liabilities Due Within One Year | 3.62 billion | 8.53 | 2.65 billion | 6.81 | 36.57 | Mainly due to an increase in long-term borrowings due within one year | | Other Current Liabilities | 6.21 million | 0.01 | 2.00 million | 0.01 | 210.21 | Mainly due to an increase in the company's endorsed notes receivable that cannot be derecognized in the current period | | Deferred Income | 41.14 million | 0.10 | 22.02 million | 0.06 | 86.80 | Mainly due to an increase in the company's government grants in the current period | - Overseas assets amounted to **RMB 25.70 billion**, accounting for **60.50% of total assets**[114](index=114&type=chunk) Operating Performance of Major Overseas Assets | Overseas Asset Name | Reason for Formation | Operating Model | Operating Revenue for the Reporting Period (RMB Million) | Net Profit for the Reporting Period (RMB Million) | | :--- | :--- | :--- | :--- | :--- | | Beijing OmniVision Overseas Subsidiaries | Enterprise merger under common control | Independent operation | 9.67 billion | 1.94 billion | | OmniVision Display Solutions and its Overseas Subsidiaries | Establishment | Independent operation | 458.55 million | -57.29 million | [(IV) Analysis of Investment Status](index=32&type=section&id=(IV)%20Analysis%20of%20Investment%20Status) This section analyzes the company's investment status, indicating that all investments align with the company's development strategy, contributing to enhanced technological capabilities and competitiveness, and generating investment returns. Financial assets measured at fair value totaled **RMB 5.34 billion** at period-end, primarily comprising stocks, private equity funds, and other investments, with positive fair value changes for stocks and private equity funds - The company's investment activities align with its development strategy, contributing to business growth, identifying new profit opportunities, enhancing technological capabilities and competitiveness, and achieving investment returns[115](index=115&type=chunk) Financial Assets Measured at Fair Value | Asset Category | Beginning Balance (RMB Million) | Fair Value Change in Current Period (RMB Million) | Cumulative Fair Value Change in Equity (RMB Million) | Impairment Provision in Current Period (RMB Million) | Purchases in Current Period (RMB Million) | Sales/Redemptions in Current Period (RMB Million) | Other Changes (RMB Million) | Ending Balance (RMB Million) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Stocks | 1,646.36 | 58.30 | -417.77 | | 19.06 | 0.09 | 0.00 | 1,723.80 | | Private Equity Funds | 2,698.11 | 17.43 | 198.00 | | 51.85 | | | 2,861.69 | | Others | 767.38 | 1.56 | -1.47 | | 210.00 | 210.31 | -14.95 | 753.68 | | Total | 5,111.84 | 77.30 | -419.23 | | 427.06 | 262.17 | -14.87 | 5,339.17 | [(VI) Analysis of Major Controlled and Associate Companies](index=34&type=section&id=(VI)%20Analysis%20of%20Major%20Controlled%20and%20Associate%20Companies) This section analyzes the operating performance of Beijing OmniVision, the company's major controlled subsidiary, which achieved **RMB 10.38 billion** in operating revenue and **RMB 1.92 billion** in net profit during the reporting period. Concurrently, the company acquired and disposed of several subsidiaries during the reporting period, but these had no significant impact on overall production, operations, or performance Financial Performance of Major Subsidiary Beijing OmniVision | Company Name | Company Type | Main Business | Registered Capital (USD) | Total Assets (RMB Million) | Net Assets (RMB Million) | Operating Revenue (RMB Million) | Operating Profit (RMB Million) | Net Profit (RMB Million) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing OmniVision | Subsidiary | Technology transfer, IC design, software development, sales, etc. | 129,750.00 | 26,840.66 | 21,988.75 | 10,378.98 | 2,246.07 | 1,921.23 | - During the reporting period, the company sold Shenzhen Tianqin Huizhi Technology Co., Ltd., deregistered Anhao Technology (Tianjin) Co., Ltd., and established Chongqing Jinghongzhi Electronics Co., Ltd., Sibico Integrated Circuit Design (Shanghai) Co., Ltd., and OmniVision International (Cayman) Company Limited, with no significant impact on overall production, operations, or performance[120](index=120&type=chunk) [5. Other Disclosures](index=35&type=section&id=5.%20Other%20Disclosures) This section discloses potential market changes, operational, financial, and tax risks, as well as the controlling shareholder's equity pledge status. Concurrently, the company actively practices an 'investor-centric' philosophy, enhancing operational quality and market trust through measures such as focusing on main businesses, improving investment returns, strengthening technological barriers, enhancing investor communication, and perfecting corporate governance - The company faces market change risks, including macroeconomic fluctuations, lower-than-expected growth in downstream markets, and product seasonality and cyclicality[120](index=120&type=chunk)[121](index=121&type=chunk) - Operational risks include relatively concentrated downstream customer business areas, uncertainties in outsourced processing capacity assurance and procurement unit price changes, and new product development not being recognized by the market[121](index=121&type=chunk)[122](index=122&type=chunk) - Financial risks include bad debts from accounts receivable, large inventory scale, and exchange rate and interest rate fluctuation risks[123](index=123&type=chunk)[124](index=124&type=chunk) - Changes in tax preferential policies may lead to an increase in the company's income tax burden[125](index=125&type=chunk) - Controlling shareholder Mr. Yu Renrong and his concerted parties collectively hold **33.88% of the company's shares**, with **18.06% cumulatively pledged**, posing a risk of a relatively high equity pledge ratio[125](index=125&type=chunk) - The company focused on its main business, with operating revenue and net profit attributable to the parent company growing by **15.49%** and **48.34%**, respectively[127](index=127&type=chunk) - The company has implemented multiple cash dividends annually and canceled **11,213,200 repurchased shares**, enhancing investment returns[128](index=128&type=chunk) - The company's R&D investment was **RMB 1.72 billion**, accounting for **14.90% of semiconductor design and sales business revenue**, and it holds **4,761 authorized patents**, continuously strengthening its technological barriers[129](index=129&type=chunk) - The company strengthened investor communication through diversified channels such as performance briefings, SSE e-interaction, and investor engagement activities, and formulated a market capitalization management system[129](index=129&type=chunk)[130](index=130&type=chunk) - The company revised its Articles of Association to abolish the Supervisory Board, with its functions now exercised by the Board's Audit Committee, and strengthened the compliant performance of duties by 'key individuals'[130](index=130&type=chunk) [(I) Potential Risks](index=35&type=section&id=(I)%20Potential%20Risks) The company faces multiple risks from market changes, operations, finance, and taxation. Market risks stem from macroeconomic fluctuations and uncertainties in downstream market demand; operational risks include high customer concentration, fluctuations in outsourced processing capacity and costs, and new product development not gaining market acceptance; financial risks involve accounts receivable bad debts, large inventory scale, and exchange rate and interest rate fluctuations; tax risks are related to changes in preferential tax policies. Additionally, a high equity pledge ratio by the controlling shareholder also constitutes a potential risk - Market Change Risks: The semiconductor industry is affected by macroeconomic fluctuations; lower-than-expected growth in downstream markets (consumer electronics, security, automotive, medical, smart glasses, machine vision, panoramic and sports cameras) or delayed customer sales promotion may adversely impact the company's sales volume[120](index=120&type=chunk)[121](index=121&type=chunk) - Operational Risks: Downstream customer business areas are relatively concentrated, and fluctuations in major customer operations or intensified competition may affect performance; under the **Fabless model**, there are uncertainties in wafer fab and packaging/testing plant capacity assurance and procurement unit price changes; if new product development fails to timely grasp market demand, it may impact market competitiveness[121](index=121&type=chunk)[122](index=122&type=chunk) - Financial Risks: Net accounts receivable of **RMB 4.45 billion**, accounting for **18.27% of current assets**, may lead to bad debts if not recovered on time; net inventory of **RMB 7.95 billion**, accounting for **32.66% of current assets**, may impact performance and cash flow if not sold smoothly; faces exchange rate fluctuation risks for financial assets and liabilities denominated in foreign currencies such as USD and HKD; bank borrowings face interest rate fluctuation risks[123](index=123&type=chunk)[124](index=124&type=chunk) - Tax Risks: Changes in preferential tax policies in various countries or regions in the future may lead to an increase in the company's income tax burden[125](index=125&type=chunk) - Equity Pledge Risk: Controlling shareholder Mr. Yu Renrong and his concerted parties collectively hold **33.88% of the company's shares**, with **18.06% cumulatively pledged**, posing a risk of a relatively high equity pledge ratio[125](index=125&type=chunk) [(II) Other Disclosure Items](index=38&type=section&id=(II)%20Other%20Disclosure%20Items) The company actively practices an 'investor-centric' philosophy, enhancing operational quality and market trust through measures such as focusing on main businesses, improving investment returns, strengthening technological barriers, enhancing investor communication, and perfecting corporate governance. During the reporting period, the company achieved significant growth in both main business revenue and net profit attributable to the parent company, and has implemented multiple cash dividends and share repurchases/cancellations. The company continuously increased R&D investment, holds numerous patents, and actively improved investor relations management and corporate governance systems - Focusing on Main Business, Accelerating Operational Quality Improvement: Main business revenue reached **RMB 13.94 billion**, a **15.49% year-on-year increase**; net profit attributable to the parent company was **RMB 2.03 billion**, a **48.34% year-on-year increase**[127](index=127&type=chunk) - Effectively Enhancing Investment Returns, Conveying Long-Term Investment Confidence: Implemented 2024 interim and annual profit distribution plans, distributing a total of **RMB 504 million** in cash dividends; **11,213,200 repurchased shares** have been canceled[128](index=128&type=chunk) - Technological Barriers Continuously Strengthened, R&D Investment Accelerated Conversion: Semiconductor design and sales business R&D investment was **RMB 1.72 billion**, a **9.01% year-on-year increase**; holds **4,761 authorized patents**[129](index=129&type=chunk) - Strengthening Investor Communication Channels, Improving Company Market Capitalization Management: Responded to investor concerns and published company information through various channels, and formulated 'Market Capitalization Management System' and 'Public Opinion Management System'[129](index=129&type=chunk)[130](index=130&type=chunk) - Adhering to Standardized Operations, Enhancing Governance Level: Revised the Articles of Association according to the 'Guidelines for Articles of Association of Listed Companies (2025 Revision)', abolishing the Supervisory Board, with its functions now exercised by the Board's Audit Committee[130](index=130&type=chunk) - Implementing Responsibilities of 'Key Individuals', Steadily Enhancing Performance Capabilities: Strengthened the sense of responsibility and compliance awareness of controlling shareholders, actual controllers, directors, supervisors, and senior management through training and daily reminders[130](index=130&type=chunk) [Part IV Corporate Governance, Environment, and Society](index=40&type=section&id=Part%20IV%20Corporate%20Governance%2C%20Environment%2C%20and%20Society) This section details the company's governance structure, including changes in directors and senior management, profit distribution plans, equity incentive programs, and its commitment to environmental and social responsibilities [1. Changes in Company Directors and Senior Management](index=40&type=section&id=1.%20Changes%20in%20Company%20Directors%20and%20Senior%20Management) This section discloses the latest changes in the company's Board of Directors and senior management, including newly elected directors, appointed senior management, and departing personnel, ensuring transparency in the corporate governance structure - The members of the company's Seventh Board of Directors include **Yu Renrong** (Chairman), **Wu Xiaodong**, **Lu Dalong**, **Jia Yuan** (Deputy General Manager), **Qiu Huanping** (Employee Director), **Chen Yu**, **Fan Mingxi** (Independent Director), **Mou Lei** (Independent Director), and **Zhu Liting** (Independent Director)[132](index=132&type=chunk) - **Wang Song** was appointed as the company's General Manager, **Xu Xing** as Chief Financial Officer, and **Ren Bing** as Board Secretary[132](index=132&type=chunk) - **Chen Zhibin** resigned as director, and **Wu Xingjun** and **Hu Renyu** resigned as independent directors[132](index=132&type=chunk) [2. Profit Distribution or Capital Reserve Conversion Plan](index=40&type=section&id=2.%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) This section states that the company did not formulate a semi-annual profit distribution or capital reserve conversion to share capital plan during the reporting period, but has authorized the Board of Directors to formulate the 2025 interim profit distribution plan to continuously enhance shareholder returns - During the reporting period, the company did not formulate a semi-annual profit distribution plan or a capital reserve conversion to share capital plan[133](index=133&type=chunk) - The company has authorized the Board of Directors to formulate the 2025 interim profit distribution plan, provided profit distribution conditions are met[133](index=133&type=chunk) [3. Status and Impact of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=40&type=section&id=3.%20Status%20and%20Impact%20of%20Company%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) This section discloses the progress of the company's equity incentive plans, including the completion of the 2025 stock option incentive plan grant registration, with **19,983,400 stock options** granted to **3,361 incentive recipients**. Concurrently, some 2022 stock options were canceled due to unmet performance targets, and the exercise of the first exercise period of the 2023 Phase I stock option incentive plan was processed - The company completed the grant registration for the **2025 stock option incentive plan** on May 23, 2025, granting a total of **19,983,400 stock options** to **3,361 incentive recipients**[135](index=135&type=chunk) - Due to the company's 2024 performance not meeting the third exercise period performance targets stipulated in the '2022 Stock Option Incentive Plan', the company canceled **6,064,828 stock options**[135](index=135&type=chunk) - The exercise conditions for the first exercise period of the '2023 Phase I Stock Option Incentive Plan' have been met, and **2,260,630 stock options** were processed for **747 incentive recipients**[135](index=135&type=chunk) [Part V Significant Matters](index=42&type=section&id=Part%20V%20Significant%20Matters) This section outlines the company's fulfillment of commitments, significant related-party transactions, major contracts, use of raised funds, and other material events impacting its operations and financial position [1. Fulfillment of Commitments](index=42&type=section&id=1.%20Fulfillment%20of%20Commitments) This section details the various commitments made by the company's controlling shareholder, actual controller, directors, and senior management in the context of major asset restructuring, initial public offering, and refinancing, including maintaining the listed company's independence, regulating related-party transactions, avoiding horizontal competition, measures to mitigate dilution of immediate returns, and share lock-up, stating that all commitments were strictly fulfilled during the reporting period - The controlling shareholder and actual controller committed to maintaining the listed company's independence in personnel, assets, finance, organization, and business[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - The controlling shareholder and actual controller committed to regulating related-party transactions, avoiding improper benefit transfers, and legally fulfilling recusal obligations[142](index=142&type=chunk)[144](index=144&type=chunk) - The controlling shareholder and actual controller committed to avoiding horizontal competition, not directly or indirectly engaging in businesses identical to the company's scope of operations[145](index=145&type=chunk) - The listed company's directors, senior management, controlling shareholder, and actual controller committed to implementing compensatory measures, not overstepping authority to interfere with company operations, not encroaching on company interests, and restricting job-related consumption[146](index=146&type=chunk)[153](index=153&type=chunk)[155](index=155&type=chunk) - Controlling shareholder Yu Renrong committed that within two years after the share lock-up period expires, the reduction in shares will not exceed **5%**, and the reduction price will not be lower than the offering price[151](index=151&type=chunk) - All commitments were strictly fulfilled during the reporting period, with no unfulfilled situations[138](index=138&type=chunk) [10. Significant Related-Party Transactions](index=47&type=section&id=10.%20Significant%20Related-Party%20Transactions) This section discloses related-party transactions during the reporting period with associate companies Jiangsu Weida Semiconductor Co., Ltd. and Xinghao Communication Technology (Zhejiang) Co., Ltd. for goods purchase/sale and service provision, as well as related-party leases with Shanghai Weicheng Apartment Management Co., Ltd. and Xinghao Communication Technology (Zhejiang) Co., Ltd Table of Goods Purchased/Services Received | Related Party | Related Transaction Content | Amount in Current Period (RMB) | Amount in Prior Period (RMB) | | :--- | :--- | :--- | :--- | | Jiangsu Weida Semiconductor Co., Ltd. | Semiconductor chips | 4.50 million | 1.96 million | | Xinghao Communication Technology (Zhejiang) Co., Ltd. | Semiconductor chips | 4.16 million | 0 | Table of Goods Sold/Services Provided | Related Party | Related Transaction Content | Amount in Current Period (RMB) | Amount in Prior Period (RMB) | | :--- | :--- | :--- | :--- | | Jiangsu Weida Semiconductor Co., Ltd. | Semiconductor chips | 0.30 million | 0.02 million | | Xinghao Communication Technology (Zhejiang) Co., Ltd. | Provision of services | 0.50 million | 0.76 million | Related-Party Leases as Lessor | Lessee Name | Type of Leased Asset | Lease Income Recognized in Current Period (RMB) | Lease Income Recognized in Prior Period (RMB) | | :--- | :--- | :--- | :--- | | Shanghai Weicheng Apartment Management Co., Ltd. | Buildings and structures | 4.36 million | 4.51 million | | Xinghao Communication Technology (Zhejiang) Co., Ltd. | Buildings and structures | 0.02 million | 0.66 million | [11. Significant Contracts and Their Fulfillment](index=48&type=section&id=11.%20Significant%20Contracts%20and%20Their%20Fulfillment) This section discloses significant guarantees provided by the company for its subsidiaries during the reporting period. The company provided loan guarantees and non-financing letter of guarantee for Shanghai OmniVision Integrated Circuit Group Co., Ltd., with the total guarantee amount accounting for **0.41% of the company's net assets**, and all guarantees were provided for guaranteed parties with an asset-liability ratio exceeding **70%** Company Guarantees for Subsidiaries | Indicator | Amount (RMB) | | :--- | :--- | | Total Guarantee Amount for Subsidiaries in Current Period | 387.18 million | | Total Guarantee Balance for Subsidiaries at Period-End (B) | 106.42 million | | Total Guarantee Amount (A+B) | 106.42 million | | Total Guarantee Amount as % of Company's Net Assets (%) | 0.41 | | Debt Guarantee Amount Provided Directly or Indirectly for Guaranteed Parties with Asset-Liability Ratio Exceeding 70% (D) | 106.42 million | - The company provided loan guarantees and non-financing letter of guarantee for Shanghai OmniVision Integrated Circuit Group Co., Ltd.[182](index=182&type=chunk)[183](index=183&type=chunk) [12. Explanation of Progress in Use of Raised Funds](index=50&type=section&id=12.%20Explanation%20of%20Progress%20in%20Use%20of%20Raised%20Funds) The company's convertible bond fundraising project, 'Wafer Color Filter and Micro-Lens Packaging Project,' was fully completed and closed in 2024. The company has permanently supplemented working capital with a cumulative **RMB 382.14 million** (including interest income) of remaining raised funds and completed the closure of relevant special fundraising accounts to maximize fund utilization efficiency - The company's convertible bond fundraising project, "**Wafer Color Filter and Micro-Lens Packaging Project**," has been completed and closed[163](index=163&type=chunk) - The company has permanently supplemented working capital with a cumulative **RMB 382.14 million** (including interest income) of remaining raised funds and completed the closure of relevant special fundraising accounts[163](index=163&type=chunk) [Part VI Share Changes and Shareholder Information](index=52&type=section&id=Part%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section provides an overview of the company's share capital changes, detailed shareholder information, and the shareholding status of its directors and senior management [1. Share Capital Changes](index=52&type=section&id=1.%20Share%20Capital%20Changes) During the reporting period, the company's total share capital increased by **1,047,114 shares** due to autonomous exercise of stock options and conversion of convertible corporate bonds, reaching a total share capital of **1,217,170,649 shares**, with minimal impact on earnings per share and net assets per share Table of Share Changes | | Number Before Change | Percentage Before Change (%) | Change in Current Period (+, -) Subtotal | Number After Change | Percentage After Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | II. Unrestricted Tradable Shares | 1,216,123,535 | 100.00 | 1,047,114 | 1,217,170,649 | 100.00 | | 1. RMB Ordinary Shares | 1,216,123,535 | 100.00 | 1,047,114 | 1,217,170,649 | 100.00 | | III. Total Shares | 1,216,123,535 | 100.00 | 1,047,114 | 1,217,170,649 | 100.00 | - During the reporting period, the company's incentive recipients exercised and completed share transfer registration for a total of **1,044,901 shares**, with a corresponding increase in the company's total share capital[168](index=168&type=chunk) - The number of shares formed by the conversion of the company's "**Will Convertible Bonds**" was **2,213 shares**, with a corresponding increase in the company's total share capital[169](index=169&type=chunk) [2. Shareholder Information](index=53&type=section&id=2.%20Shareholder%20Information) As of the end of the reporting period, the total number of ordinary shareholders was **144,124**. Among the top ten shareholders, Yu Renrong held **27.40%** as the largest shareholder, and Hong Kong Securities Clearing Company Limited held **13.37%**. Yu Renrong and his concerted party, Shaoxing Weihao Equity Investment Fund Partnership (Limited Partnership), collectively held **33.57% of the company's shares**, with some shares held by Yu Renrong and Shaoxing Weihao Equity Investment Fund Partnership (Limited Partnership) being pledged - As of the end of the reporting period, the total number of ordinary shareholders was **144,124**[171](index=171&type=chunk) Top Ten Shareholders' Shareholding Status | Shareholder Name | Number of Shares Held at Period-End (shares) | Percentage (%) | Status of Pledge, Mark, or Freeze | Number of Shares (shares) | | :--- | :--- | :--- | :--- | :--- | | Yu Renrong | 333.47 million | 27.40 | Pledged | 173.71 million | | Hong Kong Securities Clearing Company Limited | 162.71 million | 13.37 | None | 0 | | Shaoxing Weihao Equity Investment Fund Partnership (Limited Partnership) | 74.13 million | 6.09 | Pledged | 56.90 million | | Ningbo Oriental Institute of Technology Education Foundation | 47.10 million | 3.87 | None | 0 | | Qingdao Rongtong Minhe Investment Center (Limited Partnership) | 25.76 million | 2.12 | None | 0 | | Industrial and Commercial Bank of China - SSE 50 ETF | 16.69 million | 1.37 | None | 0 | | Shanghai Will Semiconductor Co., Ltd. Repurchase Special Securities Account | 15.13 million | 1.24 | None | 0 | | China Construction Bank Corporation - HuaXia CSI Semiconductor Chip ETF | 14.71 million | 1.21 | None | 0 | | Industrial and Commercial Bank of China - Huatai-PineBridge CSI 300 ETF | 12.85 million | 1.06 | None | 0 | | Goldman Sachs International - Proprietary Funds

Core Viewpoint - The company, Haowei Group, reported strong financial performance for the first half of 2025, with significant growth in revenue and net profit, indicating a robust business momentum and operational efficiency [1][2]. Financial Performance - Haowei Group achieved a revenue of 13.956 billion yuan, a year-on-year increase of 15.42%, and a net profit of 2.028 billion yuan, up 48.34% [1]. - In Q2 2025, revenue reached 7.484 billion yuan, growing by 16.07%, while net profit was 1.162 billion yuan, an increase of 43.58% [1]. - The company's main business revenue was 13.940 billion yuan, with a growth of 15.49%, primarily driven by semiconductor design and sales [1]. Business Segments - The semiconductor design business consists of three main areas: image sensor solutions, display solutions, and analog solutions [2]. - Image sensor solutions generated 10.346 billion yuan, accounting for 74.21% of main business revenue, with an 11.10% year-on-year growth, largely due to demand in automotive intelligent driving and action camera sectors [2]. - The analog solutions segment saw a revenue increase of 20.88%, reaching 0.767 billion yuan [2]. Market Trends - The automotive electronics sector is experiencing rapid growth, driven by the increasing penetration of autonomous driving systems and the demand for high-definition, multifunctional, and intelligent vehicle cameras [2]. - The global market for action cameras is projected to grow at a compound annual growth rate (CAGR) of 10.3% until 2029, while panoramic cameras are expected to grow at a CAGR of 17.8% [3]. - The company’s revenue from emerging markets and IoT image sensors reached 1.173 billion yuan, a remarkable increase of 249.42% [3]. Product Development - In the smartphone sector, image sensor revenue reached 3.920 billion yuan, with plans to launch more high-pixel products in the 50 million pixel segment [4]. - The company’s 200 million pixel image sensor products have been validated by customers, indicating potential for market share growth [4]. - Revenue from the medical market reached approximately 0.443 billion yuan, up 68.10%, while the security market generated about 0.827 billion yuan, a 16.77% increase [4]. R&D Investment - The company invested 1.724 billion yuan in R&D for its semiconductor design sales, representing 14.90% of the segment's revenue, with a year-on-year increase of 9.01% [5]. - As of June 2025, the company held 4,761 authorized patents, with over 95% being invention patents, establishing a strong competitive edge [5]. Shareholder Returns - The company has completed a cash dividend distribution of 2.64 billion yuan, with a payout of 2.20 yuan per 10 shares [6]. - The board has been authorized to develop a mid-term profit distribution plan for 2025, continuing the "multiple dividends per year" mechanism to enhance shareholder value [6].