1. Report Industry Investment Rating No relevant content is provided in the report. 2. Core View of the Report In 2025, China's non - standard market entered a stage of deep transformation and structural adjustment under continuous regulatory guidance. The regulatory framework of the trust industry was systematically reconstructed, and the financing platform business in the financial leasing industry was classified as an "exit - class" business. The scale of the non - standard market is expected to continue to shrink, and non - standard asset risks will still exist in the short term. Although the short - term risks of urban investment enterprises are generally controllable under the support of debt - resolution policies, risks in regions with heavy debt pressure such as Shandong and Guizhou still need attention [1]. 3. Summary by Relevant Catalogs Policy Review - The regulatory framework of China's trust industry was systematically reconstructed and continuously deepened in 2025, aiming to make the trust industry return to its origin. The State Financial Regulatory Administration positioned the financing platform business as an "exit - class" business for the first time, and non - compliant financial leasing business of ineligible leased items faced replacement pressure [4]. - A series of policies such as "Document 35", "Document 134", and "Document 226" were introduced to promote the orderly contraction of non - standard debt of urban investment enterprises and transform the stock assets to a more reasonable cost [8]. Market Review (1) Debt Investment Plans - In 2025, the number, scale, and issuance payment scale of debt investment plan registrations continued to decline. The registration scale in Zhejiang, Anhui, Shandong, Jiangsu, Hubei, and Guangdong ranked among the top. The total scale of stock debt investment plans in Hubei, Zhejiang, Shandong, Sichuan, and Jiangsu accounted for 41.21%, and the regional concentration increased [9]. - The top two investment fields were transportation and park infrastructure, with the registration scale accounting for 49.24% and 21.21% respectively in 2025. The average investment period in 2025 was 7.6 years, longer than that in 2024, and the average registration yield decreased by 0.47 percentage points to 3.66% per year [9]. (2) Trust Plans - As of the end of June 2025, the scale of outstanding capital trust assets continued to grow to 24.43 trillion yuan. The proportion of funds invested in the securities market became the largest, while the proportion invested in basic industries, industrial and commercial enterprises, and the real estate industry decreased. Traditional non - standard financing business was further compressed [19]. - In the context of the three - category classification, trust companies were gradually transforming from traditional non - standard financing business to the origin business of asset management, asset services, public welfare and charity [19]. (3) Financial Leasing - In 2025, the value of leasing and financing property in the whole industry decreased by 7.77% year - on - year to 3.19 trillion yuan. The value in Jiangsu, Shandong, Hebei, Sichuan, and Shanghai decreased significantly. The main investment regions were Jiangsu, Zhejiang, Shandong, Guangdong, Sichuan, Hebei, and Anhui, accounting for more than 56% [27]. - The value of leasing and financing property of urban investment companies and their subsidiaries accounted for about 29% of the whole industry, and continued to shrink under the influence of regulatory policies and debt - resolution measures [32]. Non - standard Risk Events - In 2025, the number of non - standard risk events decreased significantly, with trust plans becoming the main type of risk products, accounting for more than 65%. Financial leasing still faced the pressure of renewal due to subsequent policy tightening [34]. - Urban investment enterprises were an important part of the underlying assets of non - standard products. Risk events mainly occurred in regions with high debt pressure such as Guizhou, Shandong, and Shaanxi, and district - and county - level urban investment enterprises accounted for a relatively high proportion [34]. Future Outlook - Under the guidance of regulatory policies, the non - standard market is undergoing profound transformation. Trust companies are gradually transforming to the origin business, and some financial leasing business faces replacement pressure [41]. - Considering the substitution effect of bank loans and bonds, the issuance and implementation of non - standard products will still be difficult in the future. Although the risks of non - standard assets of urban investment enterprises are generally controllable in the short term, risks in high - debt - pressure regions still need continuous attention [41].

Financial Data and Key Metrics Changes - The company reported a revenue increase of nearly CHF 60 million compared to the previous year, reflecting a growth of 3.5% in real numbers and 10% quarter on quarter at constant currencies [27][28] - EBITDA improved significantly to CHF 22 million from a loss of CHF 20 million last year, indicating a strong recovery in profitability [30] - The gross margin has been maintained above 50%, attributed to better planning and a larger share of healthcare products, which have higher margins [29] Business Line Data and Key Metrics Changes - The enterprise segment, which constitutes around 75% of the business, saw a revenue increase of approximately 31% year-on-year, driven primarily by retail [14] - The ProAudio segment experienced a decline in revenue to CHF 56 million from CHF 92 million last year, due to a shift from full products to lower-priced modules and longer onboarding times for new customers [17][18] - The healthcare segment reported a positive trend with revenue rising to CHF 52 million from CHF 29 million last year, reflecting growth in infrastructure products [21] Market Data and Key Metrics Changes - The company noted a stabilization in demand patterns across its major customers, indicating a return to normalcy in the enterprise market [10][12] - The impact of a weaker U.S. dollar was acknowledged, with the exchange rate dropping from above seven to around 6.4, affecting results in the current quarter [12] Company Strategy and Development Direction - The company aims to maintain its core strategy of secure and reliable communication while exploring growth opportunities in various segments, particularly in healthcare and first responder applications [42][44] - There is a focus on deepening market understanding and enhancing customer relationships to drive future growth [46][49] - The company plans to invest in technology and market development to achieve its revenue target of CHF 1 billion, although no specific timeline was provided [43][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a normalized fiscal year moving forward, with expectations of stable demand and improved predictability in revenue [76][78] - The company is actively working on diversifying its sourcing strategy to mitigate risks associated with tariffs and supply chain disruptions [104][108] - The outlook for the current financial year remains cautious, with guidance adjusted to reflect uncertainties in customer orders and component availability [36][109] Other Important Information - The company has initiated a share buyback program of CHF 20 million to enhance shareholder value [34] - A significant reduction in component inventory by approximately CHF 35 million was reported, with expectations to decrease further [31] Q&A Session Summary Question: What is the interrelation between segments? - The segments are not heavily interconnected in terms of business, but they share a common technology stack that enhances operational efficiency [62] Question: How sticky is the partnership with Philips? - The partnership is considered fairly sticky due to commitments in the frame agreement, supporting the transition of full ownership [64][65] Question: Can guidance be provided for each segment? - Management acknowledged the request for segment-specific guidance and noted it would be considered for future updates [66] Question: What is the lead time for new client contracts? - The lead time for new client contracts can vary significantly, often taking between nine to eighteen months for full implementation [95] Question: How is the sourcing situation evolving? - The company is accelerating its strategy to diversify sourcing, moving production out of China while maintaining close collaboration with customers [104][106]