Core Viewpoint - Silicon Carbide (SiC) is identified as a key support for technological upgrades and efficiency revolutions, with significant applications in high-growth industries such as renewable energy, AI, communications, and AR [1] Renewable Energy Sector - SiC is crucial for achieving high energy efficiency, with a projected demand of approximately 5.77 million pieces of SiC substrates by 2030 for "new energy vehicles + charging piles + solar storage," reflecting a CAGR of about 36.7% [2] - In the electric vehicle sector, the penetration rate of 800V high-voltage platforms is expected to reach 11.17% by 2025, with SiC MOSFETs reducing overall vehicle energy consumption by 8%-10% [2] - For high-voltage DC charging piles, 100,000 high-power charging piles are expected to be built by 2027, with a demand for 510,000 SiC substrates globally by 2030 [2] - In the solar storage sector, SiC will enhance the efficiency of photovoltaic inverters and energy storage converters, with a projected demand of 940,000 SiC substrates globally by 2030 [2] AI Industry - SiC is poised for dual growth opportunities in "power + heat dissipation," with a projected demand of 730,000 SiC substrates in the power supply sector by 2030 [3] - In data centers, SiC will address the high heat generation of GPUs, with a demand of approximately 6.2 million substrates for AI chips by 2030 [3] - If SiC is utilized in both the substrate and heat sink materials in CoWoS processes, the substrate demand in the AI chip cooling sector could double [3] Communication and RF Sector - The upgrade of RF devices driven by 5G-A and 6G technologies will see GaN-on-SiC solutions becoming mainstream, with a projected demand of 170,000 semi-insulating SiC substrates globally by 2030 [4] - The AR glasses sector is expected to require 3.89 million substrates by 2030, with SiC's high refractive index making it an ideal base material for optical waveguides [4] - The overall demand for SiC substrates is expected to reach 16.76 million pieces by 2030, with a potential supply gap of approximately 12 million pieces compared to 2025 supply levels [4] - The three core growth points identified are AI intermediary layers, new energy vehicles, and AR glasses, with projected demand shares of 37%, 26%, and 23% respectively by 2030 [4]

Summary of Conference Call on HarmonyOS and Zhongke Honglue Industry and Company Involved - **Industry**: Operating Systems, IoT, Smart Devices - **Company**: Huawei and Zhongke Honglue Key Points and Arguments HarmonyOS Overview - HarmonyOS is divided into commercial and open-source versions, with the commercial version primarily used in smartphones and tablets, while the open-source version is widely applied in IoT devices [2][4] - As of 2024, there are 15,000 native applications supporting HarmonyOS, with a target of 100,000 applications by 2026 to enhance the ecosystem [2][6] Development and Challenges - The main challenge in developing HarmonyOS is building a robust application ecosystem, as early versions lacked popular applications like WeChat and QQ [5] - The ecosystem has significantly improved, with many native applications now available, including popular services like Amap and Alipay [5][6] Zhongke Honglue's Role - Zhongke Honglue focuses on the open-source version of HarmonyOS, primarily serving government and military clients, and has successfully adapted hardware for various industry clients [2][7] - The company is involved in local government initiatives to promote the adoption of open-source HarmonyOS solutions [7] Future Development Plans - Both commercial and open-source versions of HarmonyOS are expected to grow rapidly, with the commercial version set to release a long-term support version (6.1) in March 2026 [8] - Zhongke Honglue will continue to push for hardware adaptation and software development to meet diverse customer needs [8] Market Logic and Differentiation - The commercial logic of HarmonyOS is centered around scenario-based implementation, providing integrated solutions rather than just software licenses [9] - Zhongke Honglue leverages its industry advantages to focus on the government and military markets, offering comprehensive smart space solutions [10][11] Key Application Areas - HarmonyOS is gradually being implemented in healthcare, finance, and military sectors, focusing on non-core business areas to ensure system stability [3][12] - The successful implementation of HarmonyOS in specific scenarios is attributed to their independence from core business operations, allowing for easier adaptation [12][13] Product Development and AI Integration - The upcoming HarmonyOS 6.1 version is expected to enhance stability and compatibility, with a significant market launch anticipated in 2026 [14] - HarmonyOS is integrating AI capabilities, with many devices already supporting AI functions, positioning it competitively in the AI landscape [18] AR Technology Opportunities - HarmonyOS is poised to capitalize on the growing AR technology market, with significant resources allocated to AI development, leading to the launch of AR products [19] Market Outlook - By 2026, a significant increase in products based on HarmonyOS is expected, indicating a maturing market and a more comprehensive ecosystem [20] Other Important Insights - The focus on providing complete integrated solutions rather than standalone products is a key differentiator for HarmonyOS [9] - The gradual approach to implementing HarmonyOS in sensitive sectors like finance is crucial for ensuring stability and security [13] - The company is actively seeking new technological breakthroughs to maintain its competitive edge in the evolving market landscape [15][16]

Core Insights - In 2025, advancements in hardware lightweight design and basic AI functionalities will enhance the user experience and drive product innovation in smart glasses [1] - The Chinese smart glasses market is expected to reach a critical turning point in 2026, with significant changes in product forms, interaction methods, and service models [1] - Global smart glasses shipments are projected to exceed 23.687 million units in 2026, with China's shipments surpassing 4.915 million units, marking the beginning of a new phase of scaled growth [1] Industry Analysis - Jianghai Securities anticipates rapid promotion and popularization of smart glasses as a key carrier for AI, recommending attention to companies in the supply chain such as Xiaomi Group-W, Hengxuan Technology, Allwinner Technology, GoerTek, and Crystal Optoelectronics [1] - Founder Securities suggests that with major industry players accelerating their strategies and supply chain efficiency improvements, AI+AR glasses are likely to develop quickly, recommending focus on ODM and acoustic segment representatives like GoerTek, as well as other companies in the ODM and optical segments [1]

Summary of Conference Call for Zhongsoft International Company Overview - Zhongsoft International is a key player in the development and deployment of the Harmony operating system, focusing on both B-end and C-end markets. The company has established partnerships with various hardware manufacturers and is actively involved in smart city projects and AI applications. Key Points Industry and Company Involvement - Zhongsoft International has a significant stake in Deep Kaihong, which recently completed a Series B financing round with a post-investment valuation of 5.4 billion yuan, planning to list on the Sci-Tech Innovation Board in 2026 [2][3] - The company is heavily investing in smart city projects, with planned investments in Xi'an of over 10 billion to 20 billion yuan annually for the next three years, and approximately 10.5 billion yuan in Longgang District, Shenzhen [2][3] Harmony Operating System Developments - Zhongsoft International holds over 60% of the contract share for Huawei's Harmony OS, with device connections reaching 1.19 billion units. Revenue from native application migration is expected to reach 400 to 500 million yuan by the end of the year, excluding Huawei's outsourcing projects [2][3][8] - The company plans to collaborate with hardware manufacturers like Loongson and Yisiwei to create an integrated model of chips, operating systems, and ecosystems, aiming for a scale of interconnected devices in the hundreds of billions [2][4] AI and Business Growth - The AI and Harmony business revenue is projected to double year-on-year by 2025, reaching approximately 2 billion yuan, primarily through computing power leasing, domestic patent sales, and the AI Agent platform [2][6] - Zhongsoft International is developing an atomic service platform in collaboration with cultural tourism departments, which has already generated revenue in 2025 [5] Market Strategy and Competition - The Harmony virtual machine is currently free for C-end users, with plans to commercialize it for B-end clients alongside PC hardware launches in 2026 [7] - The company has a competitive edge in the open-source Harmony field due to its founding team from Huawei, leading code contributions, and extensive application capabilities across various sectors [9] Future Projections and Industry Trends - The company anticipates significant growth in the Harmony ecosystem by 2026, driven by government support and a focus on B-end device replacements in sectors like military and public security [12] - Zhongsoft International aims to become a core application supplier, leveraging new business opportunities through its atomic traffic platform [10] Additional Insights - The company is actively involved in AR and AI integration, enhancing operational efficiency and reducing costs through AI assistants in various industries [14][16] - Zhongsoft International is positioned to benefit from national policies promoting the development of domestic operating systems, with Harmony OS being specifically highlighted [11] This summary encapsulates the critical insights and developments discussed during the conference call, highlighting Zhongsoft International's strategic initiatives and market positioning within the Harmony operating system landscape.

Core Viewpoint - Citigroup's research report indicates that AAC Technologies has signed an agreement to acquire shares and other equity interests in AR diffractive waveguide technology company Dispelix Oy, with the transaction expected to be completed in the first half of 2026 [1] Group 1: Acquisition Details - The acquisition will expand AAC Technologies' product portfolio and solution capabilities in the XR field, covering areas such as acoustics, haptic feedback, micro-electromechanical systems, camera lenses and modules, structural components, and waveguide technology [1] - AAC Technologies has been collaborating with Dispelix for several years on R&D strategies, jointly developing next-generation AR devices with several leading original equipment manufacturers (OEMs) [1] Group 2: Market Positioning - The company aims to shift its focus from primarily serving domestic AR glasses clients to seizing future global opportunities in AI and AR glasses development [1] - Citigroup has set a target price of HKD 56 for AAC Technologies and maintains a "Buy" rating [1]

Group 1: Smart Glasses - The global AI glasses market is expected to grow significantly, with sales projected to reach 1.52 million units in 2024 and 5.5 million units in 2025, driven by the launch of multiple AI glasses models from companies like Meta, Alibaba, and Baidu [1][23] - The integration of traditional optical companies into the smart glasses supply chain presents a new growth opportunity, particularly for lens manufacturers [1][40] - 康耐特光学 is highlighted as a leading lens manufacturer with ongoing collaborations in XR business, while 明月镜片 is noted for its partnership with Xiaomi for AI glasses [1][44][45] Group 2: Metal Packaging - The demand for two-piece cans is expected to recover as the market shifts towards increased canization, with the canization rate in China projected to rise from 29.56% in 2024, indicating significant growth potential compared to developed markets [2][52][55] - The industry is witnessing consolidation, with major players like 宝钢包装 and 奥瑞金 enhancing their market share through acquisitions, leading to a more concentrated market [2][59][60] - The profitability of two-piece cans is anticipated to improve as supply-side dynamics stabilize and companies expand their overseas production capabilities [2][64] Group 3: Export Chain - The easing of trade tensions and the Federal Reserve's shift to a rate-cutting cycle are expected to benefit export-oriented companies, improving order volumes [3][19] - Companies like 英科医疗 and 英科再生 are positioned to capitalize on these trends, with ongoing expansions in overseas production [3][22] Group 4: Millet Economy - The millet economy is projected to grow from 168.9 billion yuan in 2024 to 308.9 billion yuan by 2029, driven by a large user base and increasing consumer interest among younger demographics [4][24] - The development of high-quality domestic IP is expected to stimulate consumer demand for millet products, supported by improved distribution channels [4][30]

Group 1 - The transition from "Science Popularization Day" to "Science Popularization Month" reflects the enthusiasm of the public for scientific exploration and the national emphasis on citizens' scientific literacy [1] - Over 500,000 key events took place nationwide, with more than 500 million participants in the "Light of Science Popularization" activities, transforming a one-day event into a month-long engagement [1] - The use of digital technologies such as AI, VR, and AR in offline activities enhances the appeal of hard science, while online formats like live broadcasts and science-themed performances broaden the reach to diverse audiences [1] Group 2 - The "14th Five-Year Plan" emphasizes the importance of strengthening science and technology popularization, cultivating an innovative culture, and promoting the spirit of scientists [2] - The aim is to synchronize science popularization with technological innovation, enhancing the impact of science in the nation's development journey [2]

Core Insights - The Gubeikou, Yaoqiaoyu, and Guanmen smart experience halls of the Great Wall officially opened in Beijing's Miyun District, featuring advanced digital exhibits that enhance visitor engagement [1] Group 1: Digital Experience and Technology - The experience hall utilizes AIGC technology to transform static historical photos into dynamic scenes, creating an immersive experience for visitors [1] - A digital representation of Qi Jiguang can interact with visitors in real-time, providing storytelling about the defense of the city [1] Group 2: Cultural and Historical Significance - The Ming Great Wall in Miyun District is recognized as one of the most representative and essential sections of the Ming Dynasty Great Wall, known for its cultural richness [1] - The district contains 182.97 kilometers of existing Ming Dynasty Great Wall and 61 registered castles, showcasing significant historical and cultural value [1] Group 3: Development and Integration - The smart experience halls are part of a broader initiative supported by the Beijing Municipal Bureau of Cultural Heritage, focusing on the development of the Great Wall cultural belt and the Jingji Great Wall scenic route [1] - The project aims to systematically and innovatively develop the Great Wall resources in the region, creating a comprehensive space for heritage education, scientific popularization, and cultural tourism [1]

Core Insights - The 27th High-Tech Fair in Shenzhen showcases technological innovations, with a focus on the theme "Technology Empowers Industrial Integration to Create a Future" [1] - Guangfeng Technology (688007) presents its self-developed LCoS AR light engines, Dragonfly G1 and Rainbow C1, highlighting breakthroughs in optical performance, cost control, and power management [1] Company Highlights - Guangfeng Technology's Dragonfly G1 light engine features a "single light engine driving dual-eye display" architecture, allowing for compact design and efficient power consumption, with a typical single-eye light source power consumption of approximately 55 nit/mW [1] - The Rainbow C1 light engine supports both single and dual-eye AR display solutions, with a resolution of either 640x480 or 960x720, showcasing strong adaptability for full-color AR scenarios [1] - The showcased LCoS AR light engines enhance user experience in AR glasses and inject new vitality into the semiconductor ecosystem [1] Industry Insights - According to IDC's report, global smart glasses shipments are expected to reach 12.8 million units by 2025, representing a year-on-year growth of 26%, with China's market expected to reach 2.75 million units, a year-on-year increase of 107% [1] - Guangfeng Technology's original laser technology is widely applied in various fields, including cinema projection, automotive optics, professional displays, and home entertainment [1]

Financial Data and Key Metrics Changes - The company's Q3 2025 revenue was $1.2 million, down 16% year-over-year due to decreased sales of M400 smart glasses [18] - Engineering services revenues were $0.3 million, down from $0.4 million in the prior year's period [18] - The net loss for Q3 2025 was $7.4 million or $0.09 per share, compared to a net loss of $9.2 million or $0.14 per share for the same period in 2024 [21] - Cash and cash equivalents as of September 30, 2025, were $22.6 million, up from $17.5 million as of June 30, 2025 [21] - Total operating expenses for Q3 2025 declined by $1.8 million or 20% to $7.1 million compared to $9 million in the prior year [20] Business Line Data and Key Metrics Changes - The OEM and defense business is accelerating, with revenue contributions expected to begin in Q4 2025 from military applications [8] - The enterprise segment, which currently accounts for the majority of revenue, is seeing increased interest in AI-enabled smart glasses [9] - The company is transitioning into production deliveries for military applications, with a six-figure development order expected to be delivered in Q4 [8] Market Data and Key Metrics Changes - Demand for high-quality color waveguides is rising, with Vuzix positioned to serve this market [7] - The company has signed NDAs with multiple ODMs and micro-display makers, indicating strong market interest [6] Company Strategy and Development Direction - Vuzix is focusing on ramping production capacity in collaboration with Quanta Computer, aiming for significant volume increases in the future [5][26] - The company is developing advanced high-index materials for waveguides to meet future performance requirements [10] - The introduction of the LX1 smart glasses is part of a strategy to expand the product portfolio and cater to different customer needs [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the increasing momentum in business and revenue for Q4 2025 [9] - The company is focused on maintaining a disciplined cost structure and converting inventories into cash to support operations through 2026 [22] - Management noted that the Amazon program is expanding significantly, indicating strong potential for future revenue growth [34] Other Important Information - The company has welcomed Dr. Chris Parkinson as President of Enterprise Solutions, aiming to enhance the enterprise sales strategy [10] - The company has no current or long-term debt obligations outstanding, providing a strong financial position [21] Q&A Session Summary Question: Discussion on Quanta's capacity ramp - Management confirmed ongoing discussions with Quanta to increase production capacity beyond the current one million waveguides per year, with potential for millions as the market grows [26] Question: Timeline for capacity ramp discussions - Management indicated that while discussions are ongoing, it may take time to establish new production lines, with updates expected in the coming quarters [27] Question: Clarity on defense industry volume ramp - Management stated that production waveguides are being shipped in Q4, with expectations for increased revenue from OEM business [28] Question: Expansion of defense contractor customer base - Management anticipates rapid development and production ramp-up for existing programs, with potential for additional contracts in 2026 [29] Question: Update on the Amazon program - Management highlighted the successful rollout of Vuzix glasses in Amazon's operations, with plans for further expansion into new applications [34] Question: Gross margins outlook - Management noted that new products like the LX1 have better margin models, and higher margins are expected in 2026 as the product mix improves [36]