Group 1: Investor Relations Activity - The activity was a targeted research meeting with specific investors [1] - The meeting took place on September 25, 2014, at the company's internal conference room [1] - The meeting was attended by representatives from CITIC Securities Co., Ltd. [1] Group 2: Meeting Participants - The meeting was hosted by Ms. Wei Daiying, the Secretary of the Board, and Ms. Liu Ziran, the Securities Affairs Representative [1] - The format of the meeting was primarily a Q&A session addressing investor inquiries [1] Group 3: Key Discussion Topics - Investors raised questions regarding the company's products and customer-related matters [1] - The company provided detailed responses to each inquiry during the session [1]

Group 1: Leadership Changes - Mr. Tian Yu stepped down as chairman and actual controller due to health issues and a desire to retire after significant contributions to the company [1] - Mr. Xia Chuanwu, the new chairman, has been with the company since its inception and is now fully responsible for overall operations, which is beneficial for long-term development [1] Group 2: Shareholding and Future Plans - Mr. Xia has completed his shareholding commitment, and future shareholding plans will depend on specific circumstances [2] Group 3: Clientele and Revenue Contribution - Major clients for the company's mobile phone OEM business include Huawei, ZTE, Longqi, Lenovo, and OPPO, but this segment contributes a small portion to overall revenue due to the OEM model [2] Group 4: Performance Forecast - The company expects a revenue growth of 5%-35% for the first nine months of 2014, influenced by a stock incentive plan and anticipated market demand [2] Group 5: Gross Margin Improvement Strategies - The company is focused on improving gross margins through: 1. Adjusting business models to allocate resources to higher-profit segments [3] 2. Upgrading production lines to enhance automation and reduce costs [3] 3. Strengthening control over subsidiaries to optimize product structures and increase market share [3] 4. Enhancing performance evaluation systems to link expenses with individual performance [3] Group 6: R&D and Product Sales - The company develops products such as mobile phones, tablets, and wireless modules, primarily sold under overseas brands in regions like Europe, the USA, and South America [4] Group 7: Production Capacity and Utilization - The company operates nearly 60 SMT production lines, primarily high-precision lines from Panasonic, with plans to temporarily borrow lines from Tianjin to alleviate capacity issues in Shenzhen [5] Group 8: Mergers and Acquisitions - The company acknowledges the potential need for mergers and acquisitions as it develops, with plans to adhere to legal disclosure requirements for any significant actions [6] Group 9: Precision Molding Factory - The precision molding factory was established to support the main business and has developed capabilities to handle high-precision metal frame processing [6] Group 10: Market Value Management - The company emphasizes the importance of market value management, focusing on business performance, timely and accurate information disclosure, and maintaining good investor relations [7]

Group 1: Company Performance Overview - The company reported significant revenue growth in the first half of 2014 compared to the same period last year, attributed to stable business growth and increased R&D investment [1] - The profit growth was limited due to higher R&D spending, increased marketing efforts, rising salary costs, and depreciation from new equipment [1] - The company expects a performance increase of 5%-35% for the period of January to September 2014, considering the impact of a stock incentive plan [1] Group 2: R&D and Market Expansion - The company is increasing R&D investment and expanding its customer base, collaborating with notable companies like Xiaomi, Qihoo 360, Haier, Samsung, and Gree in emerging product areas [2] - New products include mobile power supplies, portable Wi-Fi, wireless modules, and 4G gateways, aligning with trends in smart products and wearable devices [2] - The company is advancing automation in production processes to enhance efficiency, control costs, and improve product quality [2] Group 3: Client Relationships and Revenue Sources - The top five clients contributing to revenue in the first half of 2014 were Huawei, Medion, Shanghai Bell, Zimi Electronics, and ZTE [3] - Huawei has the longest partnership with the company, covering various product areas including DSL, PON, and routers [3] - The company anticipates increased sales from Medion's tablet demand in the upcoming peak season [3] Group 4: Financial Performance and Strategies - The gross profit margin decreased in the first half of 2014, prompting the company to focus on cost control and performance assessment to improve margins [4] - The company is in a growth phase, requiring ongoing investment in R&D and market expansion to enhance performance [4] - The company has plans for potential mergers and acquisitions based on operational needs and will comply with legal disclosure requirements [4] Group 5: Market Position and Future Outlook - The establishment of a production base in Tianjin aims to expand business reach and leverage regional advantages [4] - The company is well-positioned to meet the growing demand for smart home products, having developed Wi-Fi and Bluetooth modules for collaboration with major brands [4] - The company recognizes the importance of market capitalization management and aims to improve its practices to reflect actual business performance [5]

Company Overview - Shenzhen Zhuoyue Technology Co., Ltd. was established in February 2004 and listed on the Shenzhen Stock Exchange in 2010. The main business includes R&D, manufacturing, and sales of network communication and consumer electronics products, adhering to the "ODM+EMS" business model [1] - The company has developed customer, quality, technology, and service advantages, establishing a sustainable innovation management team [1] Product Categories and Revenue - The company's products are divided into two main categories: network communication products and consumer electronics. Network communication products account for a significant portion of overall revenue, while consumer electronics have seen rapid growth, particularly with the successful acquisition of Double Power, enhancing sales of tablets under the brand "DOPO" in the U.S. [2] - According to the 2014 semi-annual report, the revenue from consumer electronics has nearly doubled in proportion to total revenue compared to two years ago, improving overall profitability [2] Clientele and Product Segmentation - Major network communication products include DSL, gateways, routers, and data cards, with key clients such as Huawei, ZTE, and D-LINK. Consumer electronics include smartphones and tablets, primarily sold to Lenovo, OPPO, and others [2] - The company has made significant strides in smart home and wearable technology, collaborating with Samsung and Gree, and producing Xiaomi smart bands through its subsidiary Tianjin Zhuoda [3] Major Clients - The top five clients in the first half of 2014 were Huawei, Medion, Shanghai Bell, Zimi Electronics, and ZTE. Each client has specific collaboration areas, such as DSL and mobile power production [3] Production Capacity - The company operates nearly 60 SMT production lines, with production capacity in Shenzhen becoming tight. To alleviate this, seven SMT lines have been rented from Tianjin Zhuoda [4] - The company is actively promoting smart factory planning and implementing 5S visualization management to enhance production efficiency [4] Financial Performance and Cost Management - The company experienced significant revenue growth in the first half of 2014, but expenses also increased due to higher R&D investment, new client acquisition, and depreciation costs from new equipment [4] - To control costs while maintaining revenue growth, the company is adjusting its business model, upgrading production lines, and enhancing performance evaluation systems [4] Market Risks - The primary risk affecting sales expectations is market variability, particularly in consumer electronics, which are subject to rapid changes in consumer preferences and technology updates [5]

Group 1: Production Capacity and Operations - The company has nearly 60 SMT production lines, primarily Panasonic dual-track high-precision lines, with a current capacity utilization that is tight in Shenzhen but slightly surplus in Tianjin [1] - To alleviate pressure on Shenzhen's capacity, the company is renting two additional SMT production lines from Tianjin and five more to enhance overall equipment utilization [1] Group 2: Product Lines and Business Models - The company employs various business models including EMS, ODM, OEM, and JDM, with major clients for smartphones being OPPO, Huawei, Longqi, and ZTE, focusing on 4G smartphones [2] - The company’s tablet computers are self-developed and primarily sold in overseas markets, achieving good sales under the brand "DOPO" in the U.S. after acquiring Double Power [2] - Collaborations with major companies like Samsung and Gree for Wi-Fi and Bluetooth modules have led to applications in mainstream home appliances [2] Group 3: Market Trends and Growth Factors - The rapid growth in consumer electronics over the past two years is attributed to increased profit levels and the expansion of new business lines [3] - The company has shifted from traditional DSL products to PON and 4G gateway products, resulting in improved sales performance in network communication products [3] Group 4: Financial Performance and Challenges - The revenue from consumer electronics has nearly doubled since 2012, significantly contributing to overall company performance [4] - The company faces a slight decline in gross margin due to increased depreciation costs and rising raw material and labor costs [6] Group 5: Future Strategies and Innovations - To improve profitability, the company plans to adjust its business model towards higher-margin operations, enhance production line automation, and optimize subsidiary management [6] - The company is focusing on R&D in emerging fields such as mobile devices, smart home products, and wearable technology [6] Group 6: Subsidiary Performance and Management - The company has seven wholly-owned subsidiaries, with Tianjin Zhuoda being a key project aimed at expanding business coverage [7] - Current losses in subsidiaries are expected to turn around as the company expands its product offerings and market reach [7] Group 7: Incentive Plans and Management Confidence - The company's stock incentive plan sets performance targets of at least 20% revenue growth and 10% net profit growth for 2014, with the actual profit growth needing to exceed these targets due to incentive costs [9] - The chairman expresses confidence in the company's future, with potential for further stock purchases depending on circumstances [10]

Group 1: Investor Relations Activity - The activity involved a specific audience survey conducted by Macquarie Capital Securities Co., Ltd. [1] - The meeting took place on September 26, 2014, in the internal conference room of Zhuoyue Technology [1] - The company representatives included Ms. Wei Daiying, the Secretary of the Board, and Ms. Liu Ziran, the Securities Affairs Representative [1] Group 2: Main Content of the Meeting - The discussion primarily unfolded in a Q&A format, addressing investors' inquiries regarding the company's products and client situations [1] - The meeting aimed to enhance transparency and provide detailed insights into the company's operations [1]

Group 1: Company Overview - The main business of the company is providing manufacturing services for network communication, consumer electronics, and smart terminal products [2] - Major clients in network communication include Huawei, Zhongxing, and Shanghai Bell, while clients in consumer electronics include MEDION, Haier, and OPPO [2] - Huawei is the longest-standing and largest client, with a diverse range of products from traditional DSL to smart terminals [2] Group 2: Business Strategy - The company aims to deepen relationships with existing clients while actively expanding new clients and businesses [2] - New business focuses on smart wearable devices and smart home products, establishing partnerships with well-known companies like Xiaomi and Samsung [3] - The establishment of a factory in Tianjin is a key investment project to enhance production capacity and expand market coverage [4] Group 3: Financial and Operational Insights - The Tianjin factory is expected to utilize nearly half of its capacity, with further increases anticipated next year [4] - The company has a good risk control mechanism for receivables, with payment terms generally ranging from 60 to 90 days [6] - The company has not experienced significant bad debts, indicating effective financial management [6] Group 4: Future Development Plans - The company plans to focus on ODM business models, leveraging its extensive experience in hardware product development [5] - There are intentions to provide complete automation solutions when conditions are favorable [5] - The company is open to acquiring automation equipment companies as part of its growth strategy [6]