Company Overview - Star Technology Co., Ltd. is located in Taizhou Bay New District, Zhejiang Province, established on September 25, 2003, and listed on August 19, 2011. The company specializes in the research and manufacturing of protective screens for mobile phones and tablets, touch display modules, and high-precision structural components for smart consumer electronics [1][2]. Financial Performance - As of March 31, 2025, Star Technology achieved a revenue of 328 million yuan, representing a year-on-year growth of 68.29%. However, the net profit attributable to the parent company was -7.28 million yuan, showing a year-on-year increase of 75.16% in losses [2]. - The company has cumulatively distributed 62.42 million yuan in dividends since its A-share listing, with no dividends distributed in the past three years [3]. Stock Performance - On August 25, Star Technology's stock price increased by 2.18%, reaching 4.68 yuan per share, with a trading volume of 304 million yuan and a turnover rate of 4.02%. The total market capitalization is 10.616 billion yuan [1]. - Year-to-date, the stock price has risen by 6.85%, with a 10.90% increase over the last five trading days, a 12.50% increase over the last 20 days, and a 19.69% increase over the last 60 days [1]. Shareholder Information - As of March 31, 2025, the number of shareholders of Star Technology reached 119,300, an increase of 4.08% from the previous period. The average circulating shares per person decreased by 3.92% to 13,771 shares [2]. - Among the top ten circulating shareholders, Hong Kong Central Clearing Limited is the sixth largest, holding 7.9272 million shares, an increase of 1.9516 million shares from the previous period [3]. Industry Classification - Star Technology is classified under the electronic industry, specifically in the consumer electronics sector, focusing on components and assembly. The company is associated with concepts such as full-screen displays, smart glasses, foldable screens, fingerprint recognition, and smart wearables [2].

Core Viewpoint - The company reported significant growth in revenue and net profit for 1H25, driven by increased production of iPhone camera modules and improved market share in iPad cameras [3]. Group 1: Financial Performance - Revenue for 1H25 reached $1.36 billion, a substantial increase of 132% year-on-year, primarily due to low base effects from previous periods and increased production of iPhone camera modules [3]. - The gross margin for 1H25 was 11.4%, remaining stable compared to the 11.5% gross margin in the peak season of 2H24, indicating an improvement in pricing pressure [3]. - The net profit for 1H25 was $67 million, representing a 320% year-on-year increase, with a net profit margin of 5.0%, up from 2.7% in 1H24, showcasing a clear recovery in profitability [3]. Group 2: Competitive Positioning - The company has a significant advantage in profit margins compared to competitors, particularly LG Innotech, whose gross margins have been declining (7.9% in 2023, 7.2% in 2024, and 5.0% in 1H25) [4]. - The company's superior product yield management and cost optimization capabilities position it favorably for future order acquisition, allowing it to maintain a competitive edge in the market [4]. Group 3: Future Outlook - In 2H25, the company is expected to benefit from the sales peak of major client Apple, with anticipated increases in product shipments [5]. - The upcoming iPhone 17 Pro series is expected to feature upgraded camera technology, which will likely enhance the company's average selling price (ASP) for long-focus products and increase the adoption of ultra-wide cameras [5]. - The company is strategically positioned for long-term growth in various sectors, including foldable iPhone camera modules by 2026, wearable devices, and robotics, leveraging its established relationship with Apple [6].

Investment Rating - The report maintains an "Overweight" rating for the consumer electronics sector, indicating a positive outlook for the industry [5]. Core Insights - The consumer electronics sector is entering a peak season for new product launches, with expectations for valuation restructuring as major companies release AI smartphones and AR glasses [1]. - Apple's FY25Q3 revenue reached $94.04 billion, a 10% year-over-year increase, driven by strong performance across iPhone, Mac, and services, with significant investments in AI [2][9]. - The report highlights the anticipated innovation in Apple's upcoming products, including a potential entry into the foldable smartphone market [3][13]. - The consumer electronics sector's long-term growth logic remains solid, with AI innovations expected to accelerate the replacement cycle for devices and drive hardware upgrades [4]. Summary by Sections Apple Performance - Apple's FY25Q3 revenue was $94.04 billion, exceeding expectations and marking a 10% increase year-over-year, with net income of $23.43 billion [9][10]. - iPhone revenue reached $44.58 billion, a 13% increase, while Mac revenue was $8.05 billion, up 15% [11]. - The company plans to invest $600 billion in AI over the next four years, with significant acquisitions to enhance its product roadmap [2][12]. Foldable Smartphone Market - The global foldable smartphone market is projected to grow, with Apple expected to enter this segment, potentially revitalizing the market [13][20]. - In 2024, foldable smartphone shipments in China are expected to increase by 30.8%, indicating strong market potential [13]. AR and AI Glasses - The global smart glasses market saw a 110% year-over-year growth in the first half of 2025, driven by strong demand for AI glasses [21]. - Meta is set to release its first consumer AR glasses, which feature advanced display technology and are expected to enhance the AR ecosystem [29]. - The report notes that the AI glasses segment is experiencing rapid growth, with a year-over-year increase of over 250% [21][22].

Core Viewpoint - The stock of Kosen Technology (603626.SH) has surged due to speculation around consumer electronics concepts like "robots" and "AI glasses," despite the company clarifying that these segments contribute less than 1% to its revenue [2][3]. Group 1: Stock Performance - Kosen Technology's stock has experienced a strong rally, achieving a five-day consecutive increase, with the latest closing price reaching 13.87 yuan, marking a 60% rise since August 14, 2024 [2][4]. - The stock has seen significant net inflows from major funds, with a net inflow of 1.81 billion yuan on August 21, 2024, accounting for 15.83% of the trading volume [3]. Group 2: Financial Performance - The company is facing a substantial loss, with an expected net loss of between 90 million to 122 million yuan for the first half of 2024, and a non-recurring net profit loss estimated between 136 million to 168 million yuan [5]. - Kosen Technology's revenue has fluctuated significantly, with figures of 34.24 billion yuan in 2022, 25.97 billion yuan in 2023, and a recovery to 33.82 billion yuan in 2024, reflecting a growth of 30.26% year-on-year [6]. - Despite revenue recovery, the company has been trapped in a situation of increasing revenue but declining profits, with a gross margin of only 0.97% in 2024, down 9.1 percentage points year-on-year [6]. Group 3: Business Operations - Kosen Technology primarily engages in the research, development, manufacturing, and assembly of precision structural components, with the consumer electronics sector being a significant revenue source [3]. - The company has been diversifying into medical and new energy sectors, generating revenues of 358 million yuan and 274 million yuan respectively in 2024, but these segments contribute minimally to overall performance [7]. - High reliance on major clients like Apple and Huawei, which accounted for 47.57% of sales, poses risks to the company's performance due to potential fluctuations in orders from these clients [6][7].

Core Viewpoint - The company is facing a dilemma of increasing revenue without corresponding profit growth, with an expected loss of 90 million to 122 million yuan in the first half of the year [1][5]. Group 1: Stock Performance - The stock of Kosen Technology (603626.SH) experienced a strong surge, achieving a five-day consecutive limit-up, with the latest closing price reaching 13.87 yuan, marking a 60% increase over five trading days [2][3]. - The stock's rise is attributed to the hype around "consumer electronics" concepts, despite the company clarifying that its revenue from related products is less than 1% [3][4]. - The stock previously saw a 10-day limit-up due to the "foldable screen" concept, with a peak price of 14.53 yuan, reflecting a 185% increase [3]. Group 2: Financial Performance - Kosen Technology is projected to incur a net loss of 90 million to 122 million yuan in the first half of the year, with a non-recurring net profit loss estimated between 136 million to 168 million yuan [5]. - The company has experienced a decline in revenue and net profit since 2022, with revenues of 34.24 billion yuan, 25.97 billion yuan, and 33.82 billion yuan from 2022 to 2024, showing year-on-year changes of -17.44%, -24.16%, and +30.26% respectively [5]. - Despite a recovery in revenue in 2024, the net profit continued to decline, with figures of 870 million yuan, -281 million yuan, and -477 million yuan over the same period, reflecting year-on-year decreases of 76.48%, 424.29%, and 69.44% [5]. Group 3: Business Operations - The company's main business involves the research, development, manufacturing, and assembly of precision structural components, with the consumer electronics sector being a significant revenue source [3]. - In 2024, the revenue from the consumer electronics structural components business reached 25.96 billion yuan, a year-on-year increase of 30.26%, but the gross margin significantly dropped to only 0.97%, a decrease of 9.1 percentage points [5]. - Kosen Technology is attempting to diversify its business into medical and new energy sectors, but these areas contribute minimally to overall revenue, with revenues of 358 million yuan and 274 million yuan respectively in 2024 [6][7]. Group 4: Financial Health - The company reported a net cash outflow of 23.47 million yuan from operating activities in the first quarter of this year, indicating financial strain [7]. - As of the end of the first quarter of 2025, Kosen Technology had short-term loans of 857 million yuan and non-current liabilities due within one year of 367 million yuan, while cash on hand was only 370 million yuan [7]. - Accounts receivable stood at 1.143 billion yuan, accounting for 165% of revenue, highlighting potential liquidity issues [7].

Core Insights - The popularity of foldable smartphones is increasing, with global shipments expected to reach 19.8 million units by 2025, representing a market penetration rate of approximately 1.6% [1] Group 1: Consumer Preferences - Consumers are increasingly attracted to foldable smartphones not only for their innovative form factor but also due to continuous improvements in product experience [2] - Lightweight design has become a key focus for manufacturers, exemplified by the Honor Magic V5, which measures only 8.8mm in thickness and weighs 217g, comparable to traditional smartphones [2] - Battery life remains a significant concern, with 48.65% of consumers expressing a desire for improved standby time in foldable smartphones [2] Group 2: Technological Advancements - To address "battery anxiety," foldable smartphones are being equipped with larger batteries and advancing battery technology [3] - Strategic initiatives by smartphone brands in 2025 will focus on practical AI applications, imaging breakthroughs, innovation in foldable designs, and ecosystem collaboration [3] - The integration of AI technology allows foldable smartphones to assist users in various tasks, enhancing efficiency [3] Group 3: Manufacturing Efficiency - The production of foldable smartphones involves complex structures and craftsmanship challenges, yet advancements in smart manufacturing enable the assembly of a device in just 28.5 seconds at Honor's Shenzhen facility [4] Group 4: Future Outlook - The combination of lightweight foldable designs, advanced AI capabilities, and long-lasting batteries positions foldable smartphones as a potential solution for efficient living [5]

Core Viewpoint - The company reported strong revenue and profit growth in the first half of 2025, driven primarily by its consumer electronics business, with expectations for continued growth due to favorable market conditions and strategic partnerships [1][2]. Financial Performance - In H1 2025, the company achieved revenue of 1.244 billion yuan, a year-over-year increase of 32.18% [1] - The net profit attributable to shareholders was 234 million yuan, reflecting a year-over-year growth of 43.01% [1] - The gross margin for H1 2025 was 31%, up 1.07 percentage points year-over-year, while the net profit margin was 18.90%, an increase of 1.4 percentage points [1] - In Q2 2025, revenue reached 596 million yuan, a year-over-year increase of 15.38% [1] - The net profit attributable to shareholders in Q2 2025 was 126 million yuan, up 34.96% year-over-year [1] Business Segments - The precision flexible structural components segment (consumer electronics) generated revenue of 1.031 billion yuan in H1 2025, a year-over-year increase of 38.6% [2] - The precision metal components segment (Huayang Tong) achieved revenue of 195 million yuan, a year-over-year increase of 5.34% [2] - The company has established strong relationships with major clients, including Apple and Google, positioning itself well for future growth in the die-cutting market [2] Market Trends and Opportunities - The company is poised to benefit from a new growth cycle in the die-cutting market, driven by AI terminal layouts and expectations for foldable screens [2] - Upgrades in computing chips and storage are expected to drive demand for heat dissipation and shielding components, contributing to a new growth phase in the die-cutting industry [2] - Huayang Tong is well-positioned to capitalize on the AI development trend, providing precision metal components for servers and switches, which are critical for high-density layouts and stability [3] Investment Outlook - The consumer electronics business is entering a harvest phase, while Huayang Tong's expansion into data communication, charging piles, and energy storage is progressing well [3] - The company has adjusted its net profit forecasts for 2025-2027 to 700 million, 945 million, and 1.229 billion yuan, respectively [3] - Based on comparable companies, a target price of 68.3 yuan is set, with a maintained "strong buy" rating [3]

Core Viewpoint - The Apple supply chain is experiencing heightened interest from institutional investors, driven by strong expectations for the new iPhone 17's production cycle and upgrades in components and modules [1][2]. Group 1: iPhone 17 Production and Upgrades - iPhone 17 has entered large-scale production, with major manufacturer Foxconn ramping up hiring in anticipation of peak season [1]. - The iPhone 17 series is expected to see a price increase of approximately $50 compared to the previous generation, with the iPhone 17 starting at $799, the iPhone 17 Pro at $1,049, and the iPhone 17 Pro Max at $1,249 [1]. - Analysts predict significant upgrades in components such as SoC chips, cooling systems, and battery technology, driven by enhanced AI capabilities [2]. Group 2: Institutional Interest in Supply Chain Companies - Over 50 institutions have conducted research on key Apple supply chain companies, including Crystal Optoelectronics, Industrial Fulian, and Lens Technology [2]. - Crystal Optoelectronics reported a total revenue of 1.482 billion yuan in Q1 2025, a year-on-year increase of 10.2%, and a net profit of 221 million yuan, up 23.67% [3]. - Industrial Fulian, Apple's largest contract manufacturer, achieved total revenue of 360.76 billion yuan in H1 2025, a 35.58% year-on-year growth, with a net profit of 12.113 billion yuan, up 38.61% [3]. Group 3: Future Innovations and Market Trends - Lens Technology, a major supplier of glass covers and metal casings for Apple, reported Q1 2025 revenue of 17.063 billion yuan, a 10.1% increase, and a net profit of 429 million yuan, up 38.71% [4]. - The true "second curve" for the Apple supply chain may lie in breakthroughs in foldable screens and AI glasses, with predictions for the first foldable iPhone to launch in September 2026 at a price of $1,999 [4]. - Analysts suggest that the Apple supply chain could enter a valuation recovery phase as concerns over AI innovation and tariffs dissipate, with a focus on core suppliers and new product opportunities [5].

Summary of Conference Call Records Industry Overview Micro Pump Liquid Cooling Technology - Huawei's upcoming Mate 80 RS is expected to feature a proprietary micro pump cooling chip, marking a potential first in commercial-grade technology integration within the smartphone industry [1] - The micro pump liquid cooling system consists of a liquid cooling drive chip, piezoelectric micro pump, and flexible liquid cooling membrane, which efficiently dissipates heat through a closed-loop system [1] - Major manufacturers like Huawei, Xiaomi, and Vivo are adopting this technology, with the liquid cooling module valued over 50 yuan per unit, indicating a market potential exceeding 10 billion yuan [1] Key Companies - **Rifeng Co., Ltd.**: Reportedly the main supplier of liquid cooling plates for Huawei's micro pump liquid cooling phone cases, also involved in 5G base station power and communication cables [1] Low-Power High-Voltage Piezoelectric Micro Pump - Aiwei Electronics has developed a low-power high-voltage 180Vpp piezoelectric micro pump liquid cooling product, set for mass production in Q4 2025 [2] - Related companies include Nanchip Technology and Zhihua Power, both advancing liquid cooling solutions [2] Foldable Screen Technology - Apple is anticipated to launch its first foldable screen phone in late 2026, with production expected to start in Q3 2025 [2] - The foldable phone market is projected to grow, with an estimated 12 billion USD market value for hinges by 2025 [2] Key Companies - **Yian Technology**: Allegedly a supplier of liquid metal hinges for Apple's foldable screens [2] Market Opportunities Liquid Cooling Ecosystem - Intel has established a universal quick connector (UQD) interoperability alliance, aiming to innovate liquid cooling technology [4] - The GB300 UQD connector's size has been reduced to one-third, with a projected market size of 80 billion yuan by 2026 [4] Key Companies - **Chuanhuan Technology**: Engaged in liquid cooling pipeline and UQD supply [4] - **Yingwei Technology**: A certified partner in Intel's UQD alliance [4] Potassium Hexafluorophosphate (KPF6) - A breakthrough in KPF6 allows for cooling across a wide temperature range, from room temperature to -269°C, making it the only solid-state phase change cooling material [6] - The market for KPF6 is estimated to reach 8-12 billion yuan in the short term and over 50 billion yuan by 2030 [7] Key Companies - **Tianji Co., Ltd.**: A leading manufacturer of lithium hexafluorophosphate and related products [7] Financial Performance Jinbai Ze - Industrial Fulian's stock surged, with a market capitalization nearing 1 trillion yuan, driven by a 60% year-on-year revenue growth in AI server sales [9] Renhe Pharmaceutical - The company has developed the world's first brain-machine interaction smart glasses, targeting a market exceeding 300 billion yuan for youth myopia prevention [11] Jilin Chemical Fiber - The company holds over 30% market share in artificial silk production, with a significant focus on viscose filament and carbon fiber [12] Huasheng Co., Ltd. - The company is acquiring Shenzhen Yixin Technology, which specializes in energy-saving technologies for data centers [14] Risk Warning - The information provided is subject to change and should not replace independent judgment or decision-making by investors [20]

Core Viewpoint - The consumer electronics sector in A-shares is experiencing a strong performance, driven by the upcoming peak season and Apple's advancements in foldable phone technology [1][2][3] Group 1: Market Performance - As of August 20, several companies in the consumer electronics sector, including Zhihui Power and Huizhou Technology, saw significant stock price increases, with some hitting the daily limit [1] - The Consumer Electronics ETF rose by 2.57%, indicating positive market sentiment [1] - Companies in Apple's supply chain, such as Luxshare Precision and Industrial Fulian, reported strong performance in the first half of the year, contributing to the overall positive trend in the sector [3] Group 2: Employment Trends - Foxconn is ramping up hiring in Zhengzhou, with high wages offered for various positions, reflecting the demand for labor as the peak season approaches [2] - The recruitment strategy includes competitive salaries and bonuses, with potential earnings for workers reaching up to 23,000 yuan over three months [2] Group 3: Apple’s Product Developments - Apple has officially entered mass production of the iPhone 17, signaling the start of the traditional peak season for consumer electronics [2] - The anticipated launch of Apple's foldable phone in the second half of 2026 is expected to significantly increase the penetration rate of foldable phones from 1.6% in 2025 to over 3% by 2027 [1][5] Group 4: Industry Innovations - The introduction of foldable phones is seen as a key innovation in the consumer electronics market, with Apple expected to lead this trend [5][7] - The development of new materials and technologies for foldable devices, such as liquid metal and titanium alloy 3D printing, is anticipated to enhance manufacturing efficiency and cost control [6][7] - Companies like Linyi Intelligent Manufacturing are already producing components that meet the requirements for foldable devices, indicating a shift towards advanced materials in the industry [6]