Summary of Zhongtian Technology Conference Call Industry and Company Overview - The conference call pertains to Zhongtian Technology, a company involved in the manufacturing of submarine cables and communication networks, focusing on the energy interconnection and offshore wind power sectors. Key Points and Arguments 1. **Order Acquisition and Revenue Expectations** Zhongtian Technology has secured approximately 2 billion yuan in 500 kV submarine cable orders in the first half of the year, benefiting from demand in Shantou and Wenzhou. The proportion of 500 kV orders is expected to increase from 20% to 30%-50% [2][5] 2. **International Market Participation** The company is actively participating in energy interconnection projects in Europe and Southeast Asia, with expectations for breakthroughs in international high-voltage projects within the next one to two years [2][5] 3. **Domestic Market Performance** In Jiangsu, the scale of submarine cable orders is about 2 billion yuan, with revenue recognition expected mainly in Q2 and Q3. The company anticipates three new project tenders in the second half of the year, exceeding previous expectations [2][8] 4. **Profit Margins** The gross margin for 500 kV products is higher than that of 220 kV and 66 kV products. The overall gross margin is expected to remain stable this year, with improvements due to an increased proportion of high-margin products [2][6] 5. **Focus on Overseas Markets** Key overseas markets include Europe, Southeast Asia, and the Middle East, with significant potential in offshore wind power and oil and gas projects. The company expects a notable increase in overseas orders in the coming periods [2][7] 6. **Communication Network Sector** Zhongtian Technology won the top share in the China Mobile 25~206 month plan. Although there has not been a clear turning point in demand, the long-term growth trend for data transmission remains solid due to increasing internet applications and data centers [2][9] 7. **Impact of Internet Companies on Data Centers** Some internet companies are building their own data centers, affecting operators' capital expenditures. However, long-term demand for data transmission is expected to recover as application needs increase [2][10] 8. **International Strategy and Revenue Goals** Since 2017, Zhongtian Technology has aimed for 35%-40% of its revenue to come from international markets, with 25% of its communication segment revenue currently derived from overseas [2][11] 9. **Manufacturing Industry Measures** The company benefits from measures in the manufacturing sector aimed at maintaining reasonable profit margins and quality, which supports sustainable market development [2][12] 10. **Corporate Governance Changes** The company has undergone a board restructuring, with a new chairman focusing on product development and market expansion, while maintaining direct management of various segments [2][13] 11. **Investment Income Outlook** Last year's impairments were mainly in the new energy materials sector, but this year's investment income is not expected to significantly impact financial performance [2][14] 12. **Order Backlog and Future Projections** As of April 2025, Zhongtian Technology has an order backlog of approximately 13 billion yuan in the marine sector, with a production capacity target of 9-10 billion yuan for submarine cables [2][14] 13. **Domestic and International Market Trends** By 2025, the domestic offshore wind industry is expected to reach a grid-connected capacity of 60 GW, with significant project approvals anticipated in various provinces [2][15] 14. **Fiber Optic Demand** Demand for multimode fibers has increased since 2024, with the company adjusting its production capacity accordingly. Collaborations on hollow fiber technology are ongoing, focusing on industrial scale and stability [2][16]

Core Viewpoint - The global high-speed backplane connector market is projected to reach USD 2.76 billion by 2030, with a compound annual growth rate (CAGR) of 9.6% in the coming years [1]. Market Overview - The top four manufacturers in the global high-speed backplane connector market are expected to hold approximately 87.0% market share in 2024 [5]. - The primary product type is data transmission speed of 25, which accounts for about 66.6% of the market share [7]. - The telecommunications and data communication sector is the largest downstream market, representing approximately 95.8% of the demand [10]. Market Drivers - The growth in data transmission demand due to the development of data centers, cloud computing, and big data applications is driving the need for higher frequency and transmission speed [15]. - Technological innovations and standard upgrades, such as PCIe 5.0/6.0, USB4, and HDMI 2.1, are increasing the demand for high-speed connection solutions [16]. - The miniaturization and high-performance requirements of electronic devices are pushing backplane connector designs towards compact and high-density solutions [17]. - The rise of 5G and edge computing is creating a demand for high-speed and reliable connections, expanding the backplane connector market [18]. - The growth of automation and industrial applications is increasing reliance on high-speed data communication, accelerating the adoption of backplane connectors [19]. Market Challenges - Signal integrity challenges, such as signal distortion, crosstalk, and reflection, can affect performance during high-speed transmission [20]. - Heat management issues arise from increased heat generation during high-speed transmission, raising costs and design complexity [21]. - The complexity and cost of manufacturing increase due to the need for advanced manufacturing processes for high-precision and high-density designs [22]. - Rapid changes in industry standards can lead to quick product obsolescence, affecting compatibility and return on investment [23]. - Reliability and durability issues arise as high-frequency connectors require higher durability and long-term reliability, complicating design and testing [24]. - Market competition and technological barriers exist, as significant investment in new technology development is required, making it difficult for some companies to keep pace with market demands [25]. Industry Opportunities - The industry is evolving towards higher speeds to support standards like PCIe 6.0, USB4, and Thunderbolt 4, meeting the growing data transmission speed requirements [26]. - High-density and compact designs are being promoted to enhance connection density for space-constrained applications [27]. - Innovations in materials and processes, such as low-loss materials and advanced manufacturing techniques, are improving signal quality and performance [28]. - Enhancing electromagnetic compatibility (EMC) through structural optimization and shielding technology is addressing challenges posed by high-speed signals [29]. - The integration of smart connectivity and plug-and-play technology is increasing system intelligence and maintenance convenience [30]. - There is a continuous growth in demand across various sectors, including data centers, cloud computing, artificial intelligence, 5G base stations, industrial automation, and high-performance computing [31]. - The focus on green and sustainable development is driving efforts to reduce energy consumption and use environmentally friendly materials [32].

Core Viewpoint - The company is actively ramping up production of strategic products such as AI intelligent high-speed copper cables and Ethernet 6A/7 category data cables during the May Day holiday to ensure high-quality achievement of second-quarter targets [1][2]. Group 1: Production and Capacity - The company has achieved a cumulative production order of 85,000 kilometers by the end of April, driven by a surge in market demand for data copper cables [1]. - The company has made significant breakthroughs in production capacity for intelligent high-speed copper cables, achieving a stable daily output of 500 kilometers, with an expected target of 1,000 kilometers by the end of the second quarter [2]. - The company completed the expansion and renovation of eight production lines in 2024, achieving an annual production capacity of one million high-performance data cables [2]. Group 2: Financial Performance - In the first quarter of 2025, the company reported operating revenue of 184 million yuan, a year-on-year increase of 7.26%, and a net profit attributable to shareholders of 6.26 million yuan, up 68.79% year-on-year [1]. - The company's net profit margin improved by 1.22 percentage points to 3.59% compared to the same period last year [1]. Group 3: Market Position and Strategy - The company has established strategic cooperation agreements with numerous clients, with orders extending into the second half of 2025 [2]. - The company is closely following market trends and actively developing high-speed, high-capacity data cable products to meet the increasing demands in data centers, industrial automation, and smart cities [2][3]. - The company's comprehensive approach to capacity expansion, technological research and development, and market expansion has built a competitive advantage in the domestic data cable sector [3].