Financial Data and Key Metrics Changes - Product sales decreased by $6.5 million or 21.2% for Q1 2025 compared to Q1 2024, primarily due to a decrease in unit volumes shipped, especially in mobile home park sales and retail sales [4][5] - Net revenue per product sold increased by 23.1% compared to the same period in 2024, driven by a shift from wholesale sales to consumers at higher retail prices [4][5] - Net income decreased by 32.1% to $10.3 million in Q1 2025 compared to Q1 2024, with basic earnings per share down to $0.43, a decrease of 30.6% [8] - Cash increased to approximately $3.4 million as of March 31, 2025, compared to $1.1 million as of December 31, 2024 [8][9] - Book value per basic share outstanding increased by 13.1% to $20.87 from the same period in 2024 [9] Business Line Data and Key Metrics Changes - Other revenue decreased by $1 million or 59.2% during Q1 2025 compared to Q1 2024, primarily due to a decrease in forfeited deposits [5][6] - Selling, general, and administrative expenses increased by $400,000 or 6.9% during Q1 2025 compared to the same period in 2024 [6] Market Data and Key Metrics Changes - Retail loan originations in April 2025 were the highest in one month since going public, with year-to-date originations up 51% over the previous year [15][16] - Community shipments were lower than expected in Q1 due to broader market uncertainty and timing delays [16] Company Strategy and Development Direction - The company plans to simplify its product line by reducing the number of choices and options to focus on core products and improve efficiency [11] - A modification to the mobile home park financing program was introduced to allow community owners more flexibility in selling homes, which is expected to broaden the customer base [12] - Management is focusing on enhancing sales, marketing, and land development projects, with new hires in key positions to strengthen operations [13] Management Comments on Operating Environment and Future Outlook - Despite market uncertainty and tariff risks, the outlook for the remainder of 2025 is positive, with independent dealers showing health across most regions [14] - Delinquencies across loan portfolios remain low, and recovery rates are strong, indicating a stable financial environment [17] - The company anticipates selling lots in a significant development project in Bastrop County this summer, which is expected to be valuable [18] Other Important Information - Share repurchases were limited in Q1 due to trading restrictions, but the company remains focused on long-term fundamentals and has the balance sheet capacity to repurchase shares [19] Q&A Session Summary Question: Pricing and Average Selling Price - The increase in average selling price was primarily due to a favorable sales mix, with a price increase implemented in February and another planned for mid-June [21][22] Question: MHP Sales and Order Backlog - The decrease in MHP sales was attributed to both reduced demand and timing of orders, with significant orders pushed into Q2 [23][24] Question: Capital Spending and Cash Use - No unusual capital spending is expected outside of ongoing developments, with a focus on completing the Bastrop project and exploring opportunities for growth [29] Question: Production Rates and Order Cadence - Production rates in Texas are expected to increase in Q2 compared to Q1, with a focus on rebuilding the dealer base and streamlining product offerings [36] Question: Impact of Tariffs and Trade Uncertainty - Tariffs are a consideration but not a major issue, with most raw materials sourced domestically; the uncertainty in the business environment is a more significant concern [39][40] Question: Comparison with Competitors - Delayed shipments and product complexity have impacted performance, but the company remains confident in the industry and expects a positive year ahead [44][47]

Macro Overview - The Chinese economy continues its moderate recovery, with most economic indicators in the first two months exceeding market expectations. Retail sales growth has slightly increased due to the expansion of the old-for-new subsidy program. Industrial output growth has slowed slightly, but fixed asset investment growth has accelerated significantly, particularly in infrastructure and manufacturing [4][5] - The Chinese government has been signaling policies to stabilize the stock and real estate markets and boost consumption, which may support ongoing economic recovery this year. However, as the effects of policy stimulus gradually weaken and trade war impacts become more apparent, the economy may face downward pressure again in the fourth quarter. The GDP growth rate is expected to slow from 5.1% in the first three quarters to 4.5% in the fourth quarter, with an annual growth forecast of 4.9% [4] Industry Insights Engineering Machinery Industry - The proposed €500 billion infrastructure investment plan by Germany's incoming Chancellor Friedrich Merz is expected to be submitted to parliament for approval. The likelihood of passing has increased due to support from the Green Party. Companies like Weichai Power, which is a major shareholder of the European industrial vehicle manufacturer KION Group, are positioned to benefit from this plan. Additionally, Zhejiang Dingli and Sany Heavy Industry, which derive about 20% of their revenue from Europe, are also potential beneficiaries [4] Internet Industry - The retail sales data for the first two months of 2025 shows a year-on-year growth of 4.0%, an improvement from 3.7% in December 2024, driven by the nationwide old-for-new policy. Online retail sales of physical goods have also rebounded, with a year-on-year growth of 5.0%. The market's expectations for increased stimulus policies are rising, and the next round of valuation reassessment in the industry may depend on the recovery of consumer sentiment. The report maintains a "buy" rating for Alibaba, Pinduoduo, and JD.com [5] Company Analysis Tmall (6110 HK) - The company is upgraded to "buy" with a target price of HKD 4.51, as the performance in the second half of the 2025 fiscal year is expected to improve. The forecast for the fourth quarter and the entire year is better than expected, with retail sales projected to decline by only a low single digit percentage. Factors contributing to this improvement include a better macro environment, strong performance from Adidas and outdoor brands, and good e-commerce sales [6][7] - For the 2026 fiscal year, the outlook is optimistic, with expected sales growth of 4% and net profit growth of 18%. The positive macro environment, reduced industry risks, and company-specific catalysts such as new product launches and improved brand support are key drivers [6][7] Hillstone Technology (1478 HK) - The target price is raised to HKD 9.25 based on an optimistic 2025 guidance due to upgrades in OIS/periscope and demand from automotive/IoT sectors. The company is expected to see a 241% year-on-year increase in net profit for 2024, benefiting from market share growth and product upgrades. The management maintains a positive outlook for high-end lens modules and automotive/IoT lens module orders [7] China Tower (788 HK) - The company reported a 4.0% year-on-year revenue growth to RMB 97.8 billion for the 2024 fiscal year, in line with expectations. Net profit increased by 10.0% to RMB 10.7 billion, slightly above expectations. The traditional tower business remains stable, while the DAS and dual-wing businesses continue to grow at double-digit rates. The target price is raised to HKD 13.7, reflecting a favorable valuation [8]