Core Viewpoint - iHuman Inc. has filed its annual report for the year ended December 31, 2024, with the U.S. Securities and Exchange Commission, highlighting its commitment to providing tech-powered intellectual development products in China [1]. Company Overview - iHuman Inc. is a leading provider of tech-powered intellectual development products in China, focused on enhancing the child-upbringing experience for parents and making intellectual development enjoyable for children [2]. - The company has over two decades of experience in the parenthood industry, offering superior original content and advanced technological innovations [2]. - iHuman's product offerings include self-directed apps, interactive content, and smart devices aimed at developing children's abilities in speaking, critical thinking, independent reading, and creativity, while also fostering interest in traditional Chinese culture [2]. - The company utilizes advanced technologies such as 3D engines, AI/AR functionality, and big data analysis to enhance the user experience for both parents and children [2].

Core Insights - Jiahe Intelligent (佳禾智能) reported a stable performance in its 2024 annual report, achieving a revenue of 2.467 billion yuan and a net profit of 41.32 million yuan, with a year-on-year increase in operating cash flow of 7.51% [1] - The company is focusing on a diversified product portfolio, including headphones, speakers, smartwatches, and smart glasses, while also expanding into new energy storage products [1] - The global headphone shipment is projected to grow, with China being a major growth driver, as Jiahe Intelligent's headphone revenue reached 1.906 billion yuan, marking a 2.23% increase [1] Business Strategy and Development - Jiahe Intelligent is actively entering the AI/AR sector, with a significant growth forecast for AI glasses, as global shipments are expected to surge by 210% in 2024 [2] - The company is implementing a "Five New" strategy focusing on new product development, technology application, component research, process iteration, and system integration to enhance its industry influence [2] - The company has established a collaborative R&D center with multiple specialized laboratories to support cross-domain technological innovation [2] Research and Innovation - Jiahe Intelligent invested 129 million yuan in R&D in 2024, reflecting a 3.41% increase, and holds 882 valid patents, including 106 invention patents in China [3] - The company is progressing in the AI/AR glasses sector, transitioning from smart audio glasses to advanced AI/AR glasses, with ongoing production of the INMO GO series [3] - Jiahe Intelligent is strengthening collaborations with upstream and downstream partners in the AI/AR glasses supply chain to provide efficient and intelligent solutions [3] Corporate Restructuring and Market Expansion - In March 2025, Jiahe Intelligent rebranded its subsidiary to Jiahe Yuanqi (佳禾元启) to focus on AI and AR, marking a strategic shift in its core business [4] - The establishment of Jiahe International in Singapore aims to enhance overseas market capabilities and mitigate risks from international economic fluctuations [4] - The company anticipates an increase in the market share of smart glasses, contributing to a second growth curve in performance and sustainable development [4]

Group 1: Financial Performance - Company reported Q1 2025 revenue of 16.3 billion, a year-on-year decrease of 15.6% [1] - Net profit attributable to shareholders was 470 million, a year-on-year increase of 24% [1] - Non-recurring net profit was 290 million, a year-on-year increase of 6%, with 150 million from foreign exchange derivatives and fair value remeasurement [1] - Gross margin improved to 12.4%, up 3.2 percentage points year-on-year and 2.1 percentage points quarter-on-quarter [1] Group 2: Market Position and Growth Potential - Company is positioned to capitalize on the AI/AR glasses market, with global shipments expected to reach 12.05 million units in 2025, a year-on-year growth of 18% [2] - The company has strong capabilities in precision acoustics, optics, and integrated design, holding a leading position among global industry clients [2] - Anticipated growth in AI glasses shipments will benefit the company as it serves major domestic and international brands [2] Group 3: Strategic Actions and Future Outlook - The controlling shareholder plans to increase holdings by 500-1,000 million using special loans and own funds, with the buyback plan also set at 500-1,000 million [3] - The company’s Vietnamese subsidiary is projected to generate over 20 billion in revenue for 2024, a year-on-year increase of 4%, with net profit rising by 93% to 1.32 billion [3] - Earnings per share are forecasted at 1.02, 1.29, and 1.57 for 2025-2027, with a target price of 28.56 based on a 28x PE ratio for comparable companies [3]

Financial Data and Key Metrics Changes - Total revenue for full year 2024 grew by 12.5% year-over-year to $60.2 million, with net income of $5 million and adjusted net income increasing by 18.6% to $8.3 million compared to 2023 [8][32] - Operating cash flow generated a net inflow of $13 million for the full year 2024, with cash and cash equivalents totaling over $165.9 million [9][34] - Gross profit for Q4 2024 increased by 2.5% to $11.8 million, but gross margin decreased to 74.1% from 81.3% in Q4 2023 [27] Business Line Data and Key Metrics Changes - The AI/AR cloud solutions and mobile app subscription revenue grew by 25.4% to $15.1 million in Q4 2024, representing 95% of total revenue for the quarter [25] - The B2C mobile app business saw active paying subscribers increase by 14.3% year-over-year, reaching over 1 million by the end of 2024 [9][35] - Licensing revenue decreased by 72.2% in Q4 2024 to $0.5 million, indicating a shift towards a recurring subscription revenue model [26] Market Data and Key Metrics Changes - Positive momentum was noted in North America, Western Europe, and developing markets like Brazil, with strong demand for AI-powered features [10] - The enterprise customer base increased by 24 brand clients, totaling 732 brand clients with over 822,000 SKUs onboarded [36] Company Strategy and Development Direction - The company aims to deepen its presence in the beauty, fashion, and skin segments while exploring cross-sell opportunities and broadening product offerings [22] - The acquisition of Wanna from Farfetch is expected to enhance market reach and strengthen competitive positioning in the beauty and fashion space [14][39] - The focus on R&D, particularly in Generative AI, is a key priority for the company moving forward [76] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the B2B market, noting challenges but also a solid pipeline and interest from brands [44][48] - The guidance for total revenue growth in 2025 is projected to range from 13% to 14.5% compared to 2024 [23][40] Other Important Information - The company is integrating Wanna into its operations, with expectations for a full integration timeline within the first half of the year [72] - The company is committed to maintaining financial discipline while continuing to invest in AI development and R&D [56][76] Q&A Session Summary Question: What is the situation with your enterprise clients regarding spending? - Management noted that while the B2B market remains challenging, there is still interest from brands to invest in digital solutions, although they are cautious about spending [44][46] Question: What was the B2B revenue contribution last year? - Last year, B2B revenue was approximately 40% of total revenue, but it is expected to decrease as B2C continues to grow [52][53] Question: How do you plan to manage operating expenses in light of reduced gross margins? - Management indicated that they will continue to invest in growth while maintaining financial discipline, ensuring that expenses do not create financial pressures [54][56] Question: Can you discuss the competitive landscape after acquiring Wanna? - Management stated that Wanna is a leader in the fashion space with significant brand partnerships, and the acquisition strengthens their position in the market [58][60] Question: What is the timeline for the full integration of Wanna? - Integration is expected to continue through the first half of the year, with a focus on aligning sales, marketing, and product development efforts [72] Question: Where will the company focus its investments in the coming year? - The primary focus will be on R&D for Generative AI, alongside digital marketing efforts to attract app users [76]