Summary of Yangjie Technology Conference Call Company Overview - **Company**: Yangjie Technology - **Industry**: Automotive Electronics, Semiconductor Key Points Financial Performance - Automotive electronics revenue accounted for over 15% of total revenue, with a year-on-year growth exceeding 65% [2][4] - Revenue from consumer electronics and industrial markets grew by over 20% and 30%, respectively, benefiting from a favorable domestic economy and policy support [2][4] - Overseas revenue, driven by the launch of the Vietnam factory and release of overseas demand, accounted for over 26% of total revenue, with a year-on-year growth exceeding 30% [2][4] - Gross margin increased by over 4 percentage points year-on-year due to product mix optimization and cost reduction efforts, alongside a gain of over 60 million yuan from fair value changes in stocks, contributing to net profit growth [2][5] Future Growth Projections - The company aims to achieve revenue of 10 billion yuan or a net profit of no less than 1.5 billion yuan by 2027, with a projected compound annual growth rate (CAGR) of approximately 20% over the next 1-2 years and a gross margin of no less than 30% [2][6] - The HR segment is expected to maintain a high growth rate of 20%-30% [2][7] Strategic Initiatives - The company plans to complete the acquisition of Dongguan Better by December 2025, which has a higher gross margin than the parent company and is expected to significantly enhance overall gross margin post-consolidation [2][9] - Future capital expenditures will focus on the second phase of the Vietnam factory, expansion of 8-inch wafer production, and increased production of silicon carbide wafers and IGBT modules, shifting strategy from pure scale pursuit to maintaining and enhancing gross margin stability [3][23] Market Dynamics - The sanctions on Anshi Semiconductor may lead to order transfers to domestic manufacturers like Yangjie Technology, with the company already receiving inquiries from downstream customers and actively expanding product lines to meet demand [2][8][13] - The company is positioned to benefit from the potential overflow of orders from Anshi, particularly in the small signal product sector, where Yangjie ranks second globally [8][12][30] Competitive Landscape - The domestic power semiconductor industry has seen rapid growth since 2018, driven by a shift in strategy among leading domestic customers towards prioritizing domestic products [26] - Yangjie Technology has significant advantages in manufacturing capability and operational management, focusing on quality management and lean practices [27] International Expansion - The company plans to increase its overseas market share to 30% by 2027, 40% by 2030, and nearly 50% by 2035, reflecting a strategic response to post-pandemic market changes [28] - Overseas business currently contributes a gross margin of approximately 50%, highlighting the importance of international markets for overall profitability [29] Product Development - Yangjie has invested heavily in small signal products, with monthly production capacity of approximately 1 billion units in Vietnam and 2 billion units domestically, allowing for quick adaptation to new orders [16][17] - The company is also developing its energy storage business, which is expected to contribute significantly to revenue growth [18][19] Conclusion - Yangjie Technology is well-positioned for future growth, with strong performance in automotive electronics, strategic acquisitions, and a focus on expanding its international presence while maintaining robust gross margins and operational efficiency.

Financial Data and Key Metrics Changes - The company's Q4 2024 revenue was $7.4 million, an 80.3% increase from Q4 2023, but lower than the $8.2 million reported in Q3 2024 [4][10] - Full-year revenue for 2024 was $26.9 million, an 11.5% increase from the previous year [4][12] - Gross profit for Q4 was $2 million, with a gross profit margin of 27.3%, compared to a negative gross profit of $348,000 in Q4 2023 [11][12] - The company recorded a net income of $132,000 for Q4 2024, compared to a net loss of $2.3 million in Q4 2023 [12] Business Line Data and Key Metrics Changes - Revenue from the CBD equipment segment increased by $2.8 million in Q4 2024, driven by aerospace and industrial contracts [10] - The SDC segment saw a revenue increase of 28.8% in Q4 2024, attributed to strong demand for gas delivery systems [11] - Orders for the full year of 2024 were $28.1 million, an increase of 8.9% from 2023 [6] Market Data and Key Metrics Changes - The aerospace and defense market is experiencing ongoing recovery, with a follow-on order of $3.5 million received from an existing aerospace customer [6] - The silicon carbide market remains challenging due to global overcapacity and declining wafer prices [5][8] Company Strategy and Development Direction - The company is focused on four key strategic segments: aerospace defense, microelectronics, energy storage, and industrial [7] - The end of life for the MesoScribe product line allows the company to concentrate on core CBD and SDC product lines [8] - The company aims to build critical customer relationships while managing expenses to achieve long-term profitability [9] Management's Comments on Operating Environment and Future Outlook - Management expects fluctuations in orders and revenue levels due to the nature of emerging growth markets and geopolitical challenges [8][9] - The company is optimistic about its backlog, which was $19.4 million at year-end 2024, a 4.9% increase from 2023 [8] - Future profitability is contingent on new equipment orders and managing inflationary pressures [14] Other Important Information - The company recognized gains of $717,000 from the sale of equipment during fiscal 2024, primarily from the MesoScribe segment [13] - Working capital at year-end 2024 was $13.9 million, slightly down from $14.3 million in the prior year [13] Q&A Session Summary Question: How did the large $10 million silicon carbide coating order come about? - The order was a result of the company's development of a large volume silicon carbide CMC system for aerospace, which met a need from an industrial customer [19][20] Question: Are there other entities that might need similar solutions? - Yes, the technology is applicable to other customers in the industrial space, but demand expansion is necessary [25][26] Question: What are the prospects for new orders for PVT200 systems? - Uncertainty exists due to overcapacity and pricing issues in the wafer market, making it difficult to predict new orders [28] Question: How many major aerospace engine manufacturers are there? - There are four major manufacturers, with the company currently having relationships with three [32][33] Question: Will the company see follow-up orders for spare parts from a previous customer? - Spare parts orders have started to increase, and the company will continue to support that customer [41] Question: Are there potential opportunities in the battery materials business? - The company is exploring opportunities beyond its current customer, 1D, but the market is competitive [42][44] Question: What is the outlook for operating margins? - Margins are expected to improve, potentially exceeding 30% if overhead is managed effectively [51][57]