Summary of Lens Technology Conference Call Company Overview - **Company**: Lens Technology - **Industry**: Electric Components & Equipment - **Established**: 2006, listed on Shenzhen Stock Exchange in 2015 - **Products**: Touch-screen glass casings for consumer electronics including smartphones, PCs, headsets, and smart wearables [11][12] Key Points from the Conference Call Liquid Cooling Development - Lens Technology is developing a liquid cooling module for AI servers aimed at North American customers - Trial shipments for the liquid cooling module, rack chassis, and plugs are expected to start in Q4 2025 [2][3] iPhone Content Value Growth - Anticipated benefits from the peak iPhone procurement season include: 1. Increased market share in metal casing 2. Adoption of ultra-hard cover glass across four models 3. Upgrade of rear cover glass to 3D glass for one model - Expectations for more color options in foldable iPhone designs by year-end [3][4] Auto Industry Growth - Two new laminated glass production lines will begin mass production, adding 200,000 pieces of capacity annually - Plans to supply 1 million vehicles per year, starting with shipments to a key domestic EV customer in 2026 [4][5] Stock Performance and Valuation - Lens Technology's A-share stock price increased by 32% since July, surpassing the price target of Rmb26.0 - Current stock price as of September 2, 2025, is Rmb30.03, with a market cap of Rmb158 billion (approximately US$22.1 billion) [5][6][7] - Price target and rating are currently under review due to strong market expectations and solid Q2 2025 results [5][6] Financial Metrics - Revenue projections show growth from Rmb46.7 billion in 2022 to Rmb90.1 billion in 2025E - EPS expected to rise from Rmb0.50 in 2022 to Rmb1.05 in 2025E [9][8] Risks and Challenges - Potential risks include: 1. Reluctance from other major smartphone OEMs to adopt glass casings 2. Slower-than-expected adoption of 3D glass 3. Tightening export restrictions affecting demand from Chinese OEMs 4. Gross margin risks due to yield and capacity utilization issues [12] Analyst Insights - Industry structure rated as improving, with a score of 4 out of 5 - Regulatory environment rated neutral, with a score of 3 out of 5 - Anticipated positive earnings surprise driven by foldable iPhone and new AI devices [14] Conclusion Lens Technology is positioned for growth with new product developments in AI cooling solutions and automotive glass, alongside expected gains in the smartphone market. However, the company faces several risks that could impact its performance. The stock's recent rally has prompted a review of its valuation and rating.

Group 1 - The core viewpoint of the article highlights the performance of the AI Fund Xingquan Green Investment Mixed (LOF), which reported a profit of 223 million yuan in the first half of 2025, with a weighted average profit per fund share of 0.0947 yuan and a net value growth rate of 8.44% [3][35] - As of September 5, 2025, the fund's unit net value was 1.389 yuan, and the fund manager, Zou Xin, oversees two funds that have both achieved positive returns over the past year [3][4] - The fund's performance in terms of net value growth rates places it in the 75th percentile among comparable funds over the last three months, 59th over the last six months, and 62nd over the last year [7][28] Group 2 - The fund's weighted average price-to-earnings (P/E) ratio as of June 30, 2025, was approximately 56.14 times, significantly higher than the industry average of 23.66 times [12] - The weighted average price-to-book (P/B) ratio was about 2.46 times, compared to the industry average of 2.2 times, while the weighted average price-to-sales (P/S) ratio was 1.4 times against an industry average of 1.85 times [12] - The fund's weighted revenue growth rate for the first half of 2025 was 0.07%, and the weighted net profit growth rate was -0.16% [20] Group 3 - As of June 30, 2025, the fund had a total of 163,600 holders, collectively holding 2.236 billion shares, with individual investors accounting for 79.42% of the holdings [38] - The fund's turnover rate over the last six months was approximately 316.46%, consistently higher than the industry average [41] - The top ten holdings of the fund included companies such as Ningde Times, Jifeng Co., and Desay SV [44]

Group 1 - The core viewpoint of the article highlights the performance and outlook of the AI Fund, Xingsheng Global Sustainable Investment Three-Year Open Mixed Fund, which reported a profit of 14.51 million yuan in the first half of 2025, with a weighted average profit per fund share of 0.0398 yuan [3] - The fund's net value growth rate for the first half of 2025 was 3.72%, and the fund size reached 405 million yuan by the end of the reporting period [3][30] - The fund manager expressed optimism about investment opportunities arising from the global expansion of high-end Chinese products, rapid AI development, and stable dividend policies [3] Group 2 - As of September 5, 2025, the fund's one-year cumulative net value growth rate was 35.58%, ranking 399 out of 604 comparable funds [5] - The fund's three-month and six-month cumulative net value growth rates were 22.09% and 16.44%, respectively, ranking 222 out of 607 and 337 out of 607 among comparable funds [5] - The fund's weighted average price-to-earnings ratio (TTM) was approximately 8.69 times, significantly lower than the industry average of 33.74 times [9] Group 3 - The weighted year-on-year revenue growth rate (TTM) for the stocks held by the fund was 0.12%, while the weighted net profit growth rate (TTM) was 0.27% [15] - The fund's average stock position since inception was 83.42%, with a peak of 88.94% in the first half of 2024 [29] - As of June 30, 2025, the fund had 5,836 holders, with individual investors holding 70.73% of the shares [33]

Core Viewpoint - The Ministry of Industry and Information Technology has announced the list of 274 proposed exemplary smart factory projects for 2025, highlighting the advancement of smart manufacturing in China, particularly in Changsha, Hunan Province [1] Group 1: Smart Factory Projects - A total of 274 exemplary smart factory projects have been publicly announced for 2025, showcasing leading domestic standards [1] - Changsha has four companies listed among the exemplary smart factories, including Lens Technology, Weisheng Information Technology, Yanjinpuzi Food, and China Railway Construction Heavy Industry Group [1] - Lens Technology has been recognized again for its "Lean Collaborative Smart Factory for Smart Terminal Display Components," indicating its ongoing investment in digital transformation [1] Group 2: Industrial Development in Changsha - Changsha is focusing on industrial intelligence and digital transformation, aiming to elevate "Changsha Manufacturing" to "Changsha Intelligent Manufacturing" [1] - In 2024, Changsha has cultivated 124 smart manufacturing enterprises, established 311 smart manufacturing production lines, and created 1,587 smart workstations [1] - The establishment of these exemplary smart factories is expected to enhance the smart manufacturing cluster effect in Changsha, contributing to high-quality development in the manufacturing sector [1]

Group 1: Industry Overview - The AI glasses sector is experiencing a critical commercialization phase, with 48 out of 103 listed companies in the A-share market reporting positive net profit growth in the first half of the year, accounting for over 46% [2] - The industry is shifting from "technology research and development" to "scale monetization," with companies indicating that AI glasses product mass production and market expansion are key drivers of revenue and profit growth [2] - Analysts predict that the global AI glasses market will exceed 20 billion yuan in 2024, representing an 80% year-on-year growth, indicating sustained performance growth potential for related companies [4] Group 2: Company Performance - Shenzhen Zecen Electronics Co., Ltd. reported a revenue of 823 million yuan in the first half of the year, a year-on-year increase of 8.76%, and a net profit of 11.45 million yuan, up 11.52% [2] - Lens Technology Co., Ltd. achieved a revenue of 28.65 billion yuan, a 15.3% increase, and a net profit of 1.143 billion yuan, a significant growth of 32.68%, marking the best performance in nearly three years [3] - Other companies in the supply chain, such as Lixun Precision, reported a doubling of revenue from AI glasses OEM business, while Xiaomi's ecosystem company Huami Technology saw a 62% increase in smart glasses sales [4]

Core Viewpoint - The announcement of the 2025 Excellent Intelligent Factory project by the Ministry of Industry and Information Technology signifies a further push for smart manufacturing in China, providing new momentum and direction for the digital transformation of the manufacturing sector [1] Group 1: Intelligent Factory Project Overview - A total of 274 companies have been proposed for the 2025 Excellent Intelligent Factory project, indicating a significant step towards enhancing smart manufacturing capabilities in China [1] - The project aims to cultivate intelligent factories across four levels: basic, advanced, excellent, and leading, with the "excellent" level focusing on deepening digital transformation and intelligent upgrades [1] Group 2: Companies from Changsha - Four companies from Changsha have been recognized in the list, representing diverse industries such as electronic manufacturing, power equipment, food processing, and engineering machinery [2] - The companies include: - Lens Technology Co., Ltd. with its "Lean Collaborative Intelligent Factory for Display Components" - Weisheng Information Technology Co., Ltd. with its "Smart Factory for Power Terminal Equipment" - Yanjinpuzi Food Co., Ltd. with its "Smart Factory for Chinese Snack Foods" - China Railway Construction Heavy Industry Co., Ltd. with its "Flexible Intelligent Factory for High-end Underground Engineering Equipment" [2] Group 3: Technological Innovations - The intelligent factories leverage numerous technological innovations, such as the use of six-axis robots in welding processes, which enhance precision and flexibility in manufacturing [3] - The development of a welding parameter collection system allows for real-time monitoring and intelligent diagnosis, shifting quality control from "experience-driven" to "data-driven" [3] Group 4: Integration of Advanced Technologies - Lens Technology integrates cloud computing, industrial big data, and artificial intelligence with advanced manufacturing techniques, creating 14 application scenarios to optimize the entire product lifecycle [4] - Weisheng Information's automated production lines have achieved a 96% coverage rate for single-phase automation and a 93% rate for three-phase automation, resulting in a 50% increase in production efficiency compared to pre-transformation levels [4] Group 5: Competitive Advantages - The intelligent factories not only enhance production efficiency but also serve as a core competitive advantage for companies, as seen with Yanjinpuzi's focus on quality control and supply chain integration [5] - Yanjinpuzi has established three provincial-level technology centers and maintains a robust R&D team, ensuring continuous product quality leadership [5] Group 6: Regional Impact - Changsha has made significant strides in industrial intelligence and digital transformation, with 124 intelligent manufacturing companies and 311 intelligent production lines established by 2024 [6] - The emergence of these excellent intelligent factories is expected to create a cluster effect in various fields, enhancing the core competitiveness of the regional manufacturing industry and contributing to high-quality development [6]

Core Insights - The upcoming Apple fall product launch is generating significant excitement, with expectations for the iPhone 17 series to feature groundbreaking upgrades such as ultra-thin design, AI-native interaction, and widespread eSIM adoption [1][3] Market Reactions - Following Apple's announcement of the September 9 event, the A-share Apple supply chain has seen a strong performance, with companies like Hon Hai Precision (Foxconn), Kesen Technology, and Lens Technology experiencing notable stock price increases [4] - The "three giants" of the supply chain—Lens Technology, GoerTek, and Luxshare Precision—are in the spotlight, with Luxshare Precision expected to assemble 45% of the iPhone 17 series, surpassing Foxconn [4][5] Financial Performance - Luxshare Precision's revenue is projected to grow from 92.5 billion yuan in 2020 to 268.8 billion yuan by 2024, with a reported revenue of 124.5 billion yuan in the first half of this year, marking a 20.18% year-on-year increase [4] - The company's net profit reached 6.644 billion yuan, up 23.13% year-on-year, and its stock price has risen significantly since April, reaching 44.39 yuan per share as of September 4, with a total market capitalization of 321.9 billion yuan [4] Industry Trends - Analysts predict a "replacement wave" driven by Apple's new product cycle, with expectations for a significant increase in global smartphone shipments, projected to grow by 7% year-on-year to 1.22 billion units in 2024 [6] - The upcoming iPhone 17 series is expected to include four new models, featuring high refresh rate screens and upgraded chips and cameras, indicating a shift towards AI integration and lightweight design [6] Labor Market Dynamics - The supply chain is experiencing a surge in hiring, particularly at Foxconn, as the production ramp-up for new devices approaches, with hourly wages reported to be higher than those at comparable factories [7] - Foxconn is offering additional pay incentives for workers, reflecting the increased demand for labor in anticipation of the new product launch [7] Conclusion - The convergence of capital market enthusiasm, consumer electronics upgrade expectations, and increased factory activity indicates a robust pre-launch environment for Apple's upcoming products, which will be tested at the fall event [8]

Core Viewpoint - The consumer electronics industry is entering a peak season for new product launches, with a solid long-term growth logic supported by the acceleration of AI applications, which is expected to drive hardware upgrades and replacement cycles [1][4]. Group 1: Market Performance - The Wind data shows that from August 1 to now, the Wind Consumer Electronics Industry Concept Index has increased by 14.91% [1]. - On September 5, the index surged by 3.47%, with significant gains from stocks such as EVE Energy and Xinwangda, which rose over 16% [2]. Group 2: New Product Launches - Huawei launched the Mate XTs Master three-fold phone and several other products, starting at a price of 17,999 yuan [2]. - Samsung introduced the Galaxy Tab S11 Ultra and Galaxy Tab S11, featuring advanced display technology and AI capabilities [2]. - Apple is expected to unveil the iPhone 17 series on September 10, with significant upgrades anticipated in camera, cooling, and design [3]. Group 3: Company Performance - Luxshare Precision reported a revenue of 124.5 billion yuan for the first half of 2025, a year-on-year increase of 20.18%, with a net profit of 6.644 billion yuan, up 23.13% [3]. - Jingyan Technology achieved a revenue of 1.415 billion yuan, growing by 41.19%, and a net profit of 81 million yuan, up 36.37% [3]. - Lens Technology reported a revenue of 32.96 billion yuan, a 14.18% increase, with a net profit of 1.143 billion yuan, up 32.68% [4]. Group 4: Long-term Growth Outlook - Analysts believe that the consumer electronics sector's long-term growth logic remains solid, with AI applications expected to accelerate replacement cycles for mobile devices and drive hardware upgrades [4][5]. - The domestic supply chain's strong R&D capabilities and stable fundamentals position leading companies to benefit from the AI innovation wave [4]. - Investment opportunities are suggested in AI application innovations across various consumer electronics segments, including mobile phones, PCs, and wearables [5][6].

Core Viewpoint - The consumer electronics components and assembly sector in A-shares has shown strong growth in the first half of the year, with a total revenue of 819.92 billion yuan, representing a year-on-year increase of 27.12% [2] Group 1: Overall Performance - The sector includes 88 listed companies, with 7 companies reporting revenues exceeding 10 billion yuan and 18 companies between 1 billion and 10 billion yuan [1] - 70 companies achieved year-on-year revenue growth, accounting for 79.55%, while 49 companies reported positive growth in net profit attributable to shareholders, making up 55.68% [1] - The overall operating conditions of the sector remain at a high level [1] Group 2: Key Company Performance - Lens Technology has demonstrated robust growth, with a revenue of 32.96 billion yuan in the first half, up 14.18% year-on-year, and a net profit of 1.194 billion yuan, increasing by 35.53% [5] - The company has the lowest debt-to-asset ratio among those with revenues over 10 billion yuan and ranks first in net cash flow from operating activities [2][8] - The total market capitalization of Lens Technology reached 165.9 billion yuan, with a 60-day stock price increase of 51.78% [2] Group 3: Business Segments - Lens Technology's core business segments, including smartphones and computers, generated 27.185 billion yuan, a 13.19% increase year-on-year [7] - The smart automotive and cockpit segment became the second-largest revenue source, achieving 3.165 billion yuan, up 16.45% [7] - The "other smart terminal" segment, representing embodied intelligence, saw significant growth with a revenue of 364 million yuan, a year-on-year increase of over 128% [7] Group 4: R&D and Innovation - Lens Technology's R&D expenditure reached 1.644 billion yuan in the first half, a 29.15% increase, significantly above the sector average [12] - The company has obtained 2,266 patents, covering various key areas such as processing technology and new materials, establishing a strong technological barrier [12] - The company is actively involved in the embodied intelligence sector, collaborating with leading companies to produce core components for humanoid robots [10][11]

Investment Rating - The investment rating for the company is "Buy" [1] Core Views - The company has shown strong performance with a revenue of 32.96 billion yuan in the first half of 2025, representing a year-on-year increase of 14.18%. The net profit attributable to shareholders reached 1.14 billion yuan, up 32.68% year-on-year [2][3] - The company's vertical integration strategy has proven effective, particularly in the smartphone and computer segments, which generated revenue of 27.18 billion yuan, a 13.19% increase year-on-year [3] - The automotive business is accelerating, with revenue from smart automotive and cockpit products reaching 3.165 billion yuan, a 16.45% increase year-on-year [3] - Emerging fields such as AI-enabled products are expanding, with revenue from smart glasses and wearables at 1.647 billion yuan, up 14.74% year-on-year [3] - The company is expected to achieve net profits of 5.251 billion yuan, 6.919 billion yuan, and 8.026 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding P/E ratios of 30.39, 23.07, and 19.88 [3][4] Financial Summary - The total revenue for 2023 is projected at 54.491 billion yuan, with a year-on-year growth rate of 16.7%. By 2027, revenue is expected to reach 132.023 billion yuan, with a growth rate of 17.5% [4] - The net profit attributable to shareholders for 2023 is estimated at 3.021 billion yuan, with a year-on-year growth of 23.4%. This is projected to increase to 8.026 billion yuan by 2027, with a growth rate of 16.0% [4] - The gross margin is expected to stabilize around 15.9% from 2025 to 2026, with a slight increase to 16.3% by 2027 [4] - The return on equity (ROE) is projected to improve from 6.5% in 2023 to 12.4% in 2027 [4]