Summary of Hongtian Co., Ltd. Conference Call Company Overview - **Company**: Hongtian Co., Ltd. - **Industry Focus**: High-end equipment and technology services, particularly in high-end optics and ultra-precision vacuum technology platforms [2][5] Key Points and Arguments Business Strategy - **Post-Game Business Focus**: After divesting from gaming, the company is concentrating on high-end equipment and technology services [2][5] - **R&D Investment**: Significant increase in R&D investment planned for 2025, which may impact short-term profits but is expected to enhance long-term growth [2][7] - **External Expansion**: Plans to increase stake in Sichuan Zhizhen Precision Optics to strengthen the supply chain [2][7] Financial Performance - **Q3 2025 Results**: Revenue of 495 million yuan, operating profit of 139 million yuan, and net profit of 97.95 million yuan. Year-to-date revenue reached 881 million yuan with a net profit of 62.45 million yuan [3][4] - **Cash Flow**: Positive operating cash flow of over 60 million yuan [3] Market Position and Technology - **AI Surface Treatment Machines**: Leading domestic technology in AI surface treatment machines, with ongoing collaborations with major clients [4][12] - **Vacuum Coating**: Broad layout in vacuum coating, focusing on optical and solid-state battery applications, with partnerships with research institutions and manufacturers [11][13] Regulatory and Investigation Status - **Ongoing Investigation**: Under investigation by Jiangsu Securities Regulatory Commission since April 2025, currently in the detail review phase [2][6][9] - **Shareholder Support**: Shareholders express compliance with regulatory opinions and hope for a swift resolution to seize high-tech opportunities [6][18] Future Outlook - **Development Strategy**: Aiming to become an internationally influential technology innovation platform within 3-5 years, focusing on internal growth and external expansion [5][20] - **Market Sensitivity**: The company is aware of capital market sensitivities and is managing the pace of operations to mitigate regulatory and public pressure [21] Operational Improvements - **Profitability Improvement**: Q3 profitability improved due to steady business progress and new project revenue, particularly from the lithium battery sector [14][15] - **Order Confirmation**: Increased order confirmations driven by industry recovery and customer demand in the lithium battery and energy storage sectors [17] Strategic Collaborations - **High-End Optical Systems**: Collaborating with national teams to enhance high-end optical system design capabilities and precision optical processing [16] Additional Important Information - **Control and Acquisition Plans**: The company is pursuing higher ownership stakes and control in strategic partnerships, despite regulatory pressures [10][19] - **Commitment to Goals**: The company is committed to achieving its strategic goals while navigating challenges, maintaining a positive outlook for future growth [22]

Core Viewpoint - The acquisition plan by GoerTek, involving approximately 9.5 billion RMB (about 10.4 billion HKD), has been unexpectedly terminated after nearly three months of planning due to the inability to reach consensus on key terms between the parties involved [1][3][4]. Group 1: Acquisition Details - GoerTek announced the termination of the acquisition of 100% equity in Mega Precision Technology Limited and Channel Well Industrial Limited, subsidiaries of Luen Fung Commercial Holdings Limited [1][3]. - The acquisition was initially aimed at enhancing GoerTek's competitiveness in the precision components sector and was disclosed on July 23, 2025 [2][3]. - The termination was attributed to the failure to agree on critical terms during due diligence, audit, and evaluation processes [1][4]. Group 2: Company Position and Future Strategy - Despite the termination of the acquisition, GoerTek remains committed to its long-term strategic goals and will continue to pursue growth through internal development and diversified investments [5][6]. - The precision components segment has become the fastest-growing and highest-margin area for GoerTek, with reported revenue of 7.604 billion RMB, a year-on-year increase of 20.54%, and a gross margin of 23.49% [6]. Group 3: Ongoing Initiatives - GoerTek is actively pursuing other strategic initiatives, including a significant transaction by its subsidiary GoerTek Optical, which plans to increase its registered capital by 530 million RMB to acquire 100% equity in Shanghai Aolai for 1.903 billion RMB [7]. - GoerTek Microelectronics, responsible for sensor business, is also preparing for an IPO in Hong Kong, having submitted its application to the stock exchange in July 2025 [8]. - In 2024, GoerTek Microelectronics achieved revenue of 4.536 billion RMB and a profit of 309 million RMB, positioning itself as the largest acoustic sensor provider globally with a market share of 43% [8].