Group 1 - The core viewpoint of the report is that Dongwu Securities has given a "buy" rating for Rockchip (603893.SH) based on strong revenue growth and enhanced profitability in the first half of 2025 [2] - The company's flagship products are experiencing steady growth, and the new NPU is actively expanding into edge AI scenarios [2] - Rockchip is accelerating its product innovation and expanding its full-scenario AIoT chip layout [2]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company achieved significant revenue growth in H1 2025, with a revenue of 2.046 billion yuan, representing a year-on-year increase of 63.85% [8] - The gross margin improved to 42.29%, up by 6.38 percentage points year-on-year, while the net profit attributable to shareholders reached 531 million yuan, a year-on-year increase of 190.61% [8] - The flagship products continue to grow steadily, with the introduction of new NPU products aimed at expanding edge AI applications [8] - The company is accelerating its AIoT chip layout across various scenarios, including automotive, home, education, and industrial applications [8] - The company is expected to maintain its competitive advantage in the SoC industry, with revenue forecasts for 2025-2027 adjusted to 4.371 billion, 5.558 billion, and 6.962 billion yuan respectively [8] Financial Summary - The total revenue for 2023 is projected at 2.135 billion yuan, with a year-on-year growth of 5.17% [1] - The net profit attributable to shareholders for 2023 is estimated at 134.89 million yuan, reflecting a year-on-year decrease of 54.65% [1] - The earnings per share (EPS) for 2023 is projected at 0.32 yuan, with a P/E ratio of 558.64 [1] - The company’s total assets are expected to reach 4.266 billion yuan in 2024, with a debt-to-equity ratio of 21.02% [7][9]

Core Insights - The company, Rockchip (瑞芯微), reported a significant increase in revenue and profit for the first half of 2025, with operating income reaching 2.046 billion yuan, a year-on-year growth of 63.85% [1] - The net profit attributable to shareholders was 531 million yuan, reflecting a remarkable year-on-year increase of 190.61% [1] - Basic earnings per share stood at 1.27 yuan, indicating strong financial performance [1] Revenue and Profit Growth - The company's revenue growth is attributed to its long-term strategic positioning in AIoT products, which has allowed it to capitalize on the growing demand for AI applications at the edge [1] - The flagship product RK3588 and the newer RK3576 have been key drivers in maintaining rapid growth across various AIoT product lines [1] Market Expansion - Rockchip has been expanding its presence in critical sectors such as automotive electronics, industrial applications, machine vision, and various types of robotics [1] - The company continues to leverage its advantages in AIoT to sustain high growth rates in these targeted areas [1]

Core Insights - Multi-Point Smart Co., Ltd. reported a revenue of RMB 1.078 billion for the period ending June 30, 2025, representing a year-on-year growth of 14.8% [1] - The company achieved a net profit of RMB 62.17 million, marking a significant turnaround from a loss, with adjusted net profit soaring by 152.5% to RMB 77.01 million [1] Company Performance - The company is focusing on sustainable revenue growth while establishing itself as a benchmark for AI-driven retail transformation [1] - Multi-Point Smart has conducted in-depth research on leading retailers like Pang Donglai, learning advanced practices to develop a mature methodology for retail transformation [1] - The implementation of AI technologies, such as smart customer flow and cold chain control, has enhanced operational efficiency in various stores, including Wumart supermarkets [1] Retail Industry Trends - The success of Wumart's transformed stores demonstrates the effectiveness of Multi-Point Smart's solutions in enhancing supplier management, marketing, and operational efficiency [2] - The retail industry is undergoing significant changes, with evolving consumer structures and business models, creating a complex development environment [2] - Advances in technologies like generative AI and AIoT are driving a new wave of industrial upgrades, emphasizing the need for practical applications that improve operational efficiency and user experience [2] Strategic Approach - Multi-Point Smart combines deep insights into the retail sector with cutting-edge AI technologies to create a model for AI-driven retail, promoting the integration of technology and business [2] - The company's approach aims to provide sustainable growth for enterprises and contribute to the high-quality development of the entire retail industry [2]

Group 1 - The company is optimistic about its long-term outlook, expecting significant growth in the AI market from 2026 to 2029, particularly in high-performance computing (HPC) [1] - The company has successfully completed the verification of its 3nm chip design in collaboration with major North American cloud customers, with mass production expected to begin by the end of Q1 2026 [1] - The company plans to recognize NRE revenue from its 2nm design project this year and is working with global cloud service providers on large AI chip projects [1] Group 2 - In the automotive market, the company has made clear progress in its ADAS chip project, with wafer orders already placed by end customers, expected to become one of the top three revenue sources starting in 2026 [2] - Over 80% of the company's revenue in Q2 came from advanced processes of 7nm and below, with expectations for significant growth in the revenue share from 3nm and 2nm processes starting in 2026 [2] - The company is actively reducing its exposure to the Chinese market, with revenue from China dropping to single digits in Q2, while expanding its engineering teams in Japan, Malaysia, and Vietnam [2] Group 3 - The company's Q2 consolidated revenue was NT$9.144 billion, a decrease of 12.79% quarter-over-quarter and 32.68% year-over-year, with a gross margin of 20.64% [3] - For the first half of the year, the consolidated revenue totaled NT$19.629 billion, a year-over-year decrease of 18.46%, while the gross margin increased by 3.1 percentage points [3] - The company maintains confidence in the AI market, expecting strong and sustainable growth in the coming years as N3 production and next-generation design projects are implemented [3]

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company achieved a revenue of 1.801 billion RMB in Q2 2025, representing a year-over-year increase of 9.94% and a quarter-over-quarter increase of 17.72%. The net profit attributable to the parent company was 308 million RMB, up 31.46% year-over-year and 63.90% quarter-over-quarter [1][2]. - The growth in revenue is primarily driven by the demand increase from the smart home market and the launch of new products such as the 6nm flagship products and WiFi6 chips [1][2]. - The company expects further growth in Q3 2025 and for the entire year of 2025, supported by the acceleration of product launches and upgrades to meet the higher computational demands of edge AI applications [1][4]. Summary by Sections Q2 2025 Review - The company reported record-high quarterly revenue and shipment volumes, with A-series product sales growing over 50% year-over-year in both 1H25 and Q2 2025. WiFi chip shipments exceeded 5 million units in Q2 2025, with WiFi 6 accounting for nearly 30% of shipments [2]. - The gross margin for Q2 2025 was 37.29%, benefiting from product mix optimization and improved operational efficiency [2]. Outlook for H2 2025 - As of the end of Q2, the company's advance payments reached 620 million RMB, reflecting increased inventory to meet strong downstream demand. The company anticipates continued year-over-year growth in Q3 2025 and for the full year [3]. - The company plans to launch new high-end TV SoC products and flagship A-series products in the second half of 2025, aiming to enhance market share and meet greater computational needs [3]. Investment Recommendations - The target price is set at 100.5 RMB, with an upward revision from the previous target of 88.9 RMB, based on a 35x PE for 2025. The expected net profits for 2025-2027 are projected at 1.208 billion, 1.504 billion, and 1.823 billion RMB, respectively [4][8].

Investment Rating - The report maintains a "Recommended" rating for the company, considering its unique position as one of the few SoC companies with a developer ecosystem and the expected benefits from the expansion of the edge AI hardware market [3][5]. Core Insights - The company is positioned to benefit from the trend of edge intelligence, having developed a robust developer ecosystem over the years, which has created a competitive moat [1][2]. - The B2D2B business model is central to the company's growth strategy, focusing on reducing developers' learning and time costs, thereby locking in application ecosystems and enhancing customer stickiness [2][19]. - The company has entered a high growth phase, with revenue expected to increase significantly due to the rising demand for AI terminal products starting in 2024 [1][10]. Summary by Sections Developer Ecosystem and Market Position - The company has established itself as an AIoT ecosystem player, benefiting from the long-tail market's demand for intelligent solutions, with revenue entering a high growth phase from 2024 [1][10]. - The development of the ecosystem can be divided into two phases: the construction phase from 2016Q1 to 2023Q1, and the harvesting phase from 2023Q1 to 2025Q2, where the daily project growth on GitHub increased from 45 to 123 [1][14][15]. Business Model and Competitive Advantage - The B2D2B model allows the company to sell a complete set of development tools rather than just chips, creating a strong competitive advantage through developer engagement and community support [2][19]. - The brand value and technical advantages underpin the company's open ecosystem, with the ESP32 brand recognized for reliability and performance, attracting more developers and customers [2][29]. Financial Forecast and Performance Metrics - The company is projected to achieve net profits of 5.59 billion, 7.18 billion, and 9.00 billion yuan for the years 2025 to 2027, with corresponding PE ratios of 43, 34, and 27 [3][4][51]. - Revenue is expected to grow from 2,007 million yuan in 2024 to 4,298 million yuan in 2027, reflecting a compound annual growth rate of approximately 23.4% [4][53].

Core Insights - The recent advancements in AI, particularly with the release of Google’s Genie 3 and OpenAI’s GPT-5, highlight the increasing importance of the Internet of Things (IoT) in driving AI applications and capabilities [1][2] - The prediction that 70% of the value from "Artificial Intelligence+" will ultimately belong to IoT is gaining validation as the AI industry matures [1][19] - IoT is becoming a crucial driver for AI deployment across various sectors, providing 67%-72% of the raw data necessary for AI applications [1][2] AI and IoT Integration - IoT is not just a data collector but a vital bridge for AI to interact with the real world, enabling continuous learning and feedback [2][7] - The latest AI models, such as GPT-5 and Genie 3, are transitioning from relying solely on virtual data to actively perceiving and interacting with the physical world [2][7] - The limitations of large models in virtual environments are prompting a shift towards utilizing real-world data for AI advancements [7][11] Data Quality Over Quantity - The focus is shifting from merely accumulating large datasets to acquiring high-quality, structured data that accurately reflects physical realities [11][12] - "Good data" must be physically authentic, semantically understandable, and capable of covering diverse scenarios to enhance AI's generalization and reasoning abilities [11][12] Evolution of AI Models - The trend of scaling AI models has reached a point where mere increases in parameters and computational power are yielding diminishing returns [5][11] - The emergence of AIoT (Artificial Intelligence of Things) is seen as essential for overcoming the limitations of current AI models and enabling them to operate effectively in complex real-world environments [7][12] Future of AI and Industry - The AI industry is at a pivotal moment where the competition is shifting from model capabilities to integrated platforms that encompass hardware and software solutions [15][16] - AIoT is redefining its role from a simple connectivity tool to a foundational element that empowers physical devices to become intelligent agents [16][18] - The integration of AI and IoT is expected to drive significant advancements in various sectors, leading to a new era of intelligent economic systems [16][19]

Core Viewpoint - UBS has lowered the target price for Xiaomi Group-W (01810) to HKD 60 while maintaining a "Neutral" rating, anticipating continued rapid growth in the AIoT business in the upcoming quarter [1] Group 1: AIoT Business Performance - The AIoT sales for the next quarter and the full year are projected to be RMB 36.6 billion and RMB 140.6 billion, respectively, representing year-on-year growth of 37% and 35% [1] Group 2: Smartphone Sales and Market Performance - Xiaomi's smartphone sales for the next quarter are estimated at 41 million units, showing a year-on-year increase of 0.5% and a quarter-on-quarter rise of 1.5% [1] - The Chinese market has seen an 8% year-on-year increase in sales, driven by subsidies and the 618 shopping festival [1] - The total smartphone sales for the year are expected to reach 175 million units, supported by gains in emerging markets and the mid-to-high-end market share in China [1] Group 3: Profitability and Margins - Due to the impact of the 618 promotional activities leading to a decrease in average selling price, along with the expanding contribution from emerging markets offsetting the ongoing high-end strategy, the smartphone gross margin for the second quarter is expected to remain stable at approximately 11.6% quarter-on-quarter [1]

Group 1 - UBS forecasts Xiaomi Group-W (01810) AIoT business to maintain rapid growth in Q2, predicting sales of 36.6 billion and 140.6 billion RMB for Q2 and the full year, representing year-on-year growth of 37% and 35% respectively [1] - The firm has lowered its earnings estimates for the group by 10.4% for Q2 and 5.5% for the full year, with the target price reduced from 62 HKD to 60 HKD, maintaining a "Neutral" rating [1] - Xiaomi's smartphone sales in Q2 reached 41 million units, showing a year-on-year increase of 0.5% and a quarter-on-quarter rise of 1.5%, with sales in the Chinese market boosted by subsidies and the 618 shopping festival, growing by 8% year-on-year [1] Group 2 - The company expects total smartphone sales for the year to reach 175 million units, benefiting from increased market share in emerging markets and the mid-to-high-end market in China [1] - Due to the impact of the 618 promotional activities leading to a decrease in average selling price, along with the expanding contribution from emerging markets offsetting the ongoing high-end strategy, the smartphone gross margin for Q2 is expected to remain stable at approximately 11.6% quarter-on-quarter [1]