Summary of Desay SV's Conference Call Company Overview - **Company**: Desay SV - **Industry**: Automotive Electronics and Intelligent Cockpit Solutions Key Points and Arguments Financial Performance and Projections - Desay SV expects a consistent annual decline of approximately 4%-6% in 2025, but anticipates a cost reduction of 20%-30% per vehicle through integrated cockpit solutions like the 8,775 design innovation [2][6] - The gross margin for Q1 2025 improved compared to Q4 2024 and Q1 2024, returning to a normal level due to product structure changes and the increasing share of domain control products [3][10] Strategic Partnerships and Innovations - A comprehensive strategic partnership with Qualcomm covers autonomous driving, integrated cockpit, and cockpit domains, aiming to enhance cost-effectiveness and promote mass production [2][7] - The fifth-generation intelligent cockpit platform is expected to enter mass production in 2026, maintaining costs around 5,000 to 6,000 yuan, with Qualcomm's solutions projected to capture 70% of the market share by 2024 [5][22] Market Share and Competitive Landscape - Desay SV anticipates an increase in market share, particularly in the cockpit domain control area, with Qualcomm's solutions expected to exceed 30% market share by 2026 [2][9] - The integration of cockpit and driving systems is expected to standardize configurations and reduce competition, benefiting larger enterprises with scale advantages [18][19] Cost Reduction Strategies - The company aims to replace scattered products with a complete solution to achieve cost reductions of 20%-30% for automakers while maintaining profitability [11][12] - The integration of self-developed algorithms into mature hardware provides a competitive edge over software companies entering hardware [13] International Expansion - Desay SV's overseas business is a key growth area, with expectations of significant order volumes starting in 2025, potentially reaching nearly 20% of total sales in the next two to three years [20] - Initial products for international markets will include displays and central control units, with intelligent driving products expected to follow in 2026 [20] Profitability and Margin Outlook - The gross margin for domestic operations was around 20% in 2024, with expectations of improvement as overseas sales increase, particularly in high-margin intelligent driving products [21] - The company aims to maintain stable gross margins despite potential impacts from changes in customer structure and the introduction of new clients [30] Future Product Development - The company plans to expand its algorithm team in Shanghai to enhance R&D capabilities, focusing on mid-to-low tier scenarios like parking and highway driving [16] - New product lines, including AI HUD and electronic rearview mirrors, are being developed to enhance competitiveness [25] Investment Opportunities - Investors are encouraged to focus on opportunities in the Intelligent Connected Vehicle (ICV) sector, as the overall valuation is at a historical low, indicating potential for growth [31] Additional Important Insights - The competitive landscape is expected to stabilize as smaller competitors face challenges, leading to a more rational market environment [17] - Desay SV's strategy includes adapting algorithms for local markets, with a preference for increasing the share of proprietary algorithms in their offerings [23][24]