Summary of Conference Call for New Coordinates Company Overview - New Coordinates has achieved its highest quarterly revenue ever in the first half of 2025, with Q2 revenue exceeding 200 million yuan, showing significant year-on-year and quarter-on-quarter growth [3][22] - The company’s net profit reached a record high of 77 million yuan, with a healthy gross margin maintained [3] Industry and Market Dynamics - The overseas revenue of New Coordinates has surpassed domestic revenue for the first time, accounting for over 51% of total revenue, primarily due to the efforts of overseas subsidiaries since 2022 [2][3] - The commercial vehicle and commercial engine business segments have increased in proportion, indicating an optimization of the company’s business structure [2] Customer Structure and Market Share - BYD still accounts for over 10% of New Coordinates' revenue, although this has slightly decreased; Volkswagen accounts for approximately 40%-50% globally, with foreign markets making up two-thirds of this [2][4] - The commercial vehicle segment has seen nearly 20% growth, with revenue exceeding 70 million yuan, mainly driven by overseas markets and clients such as MAN and Caterpillar [4][10] - The Mexican subsidiary has shown significant revenue growth, enhancing profitability through scale effects and automation improvements [16] Product Development and R&D - New Coordinates established a dedicated subsidiary for four-cylinder engine research and development with a registered capital of 500 million yuan, aiming to enter small-scale production in the second half of the year [6][30] - The company has made progress in developing new products, particularly in the valve train and precision components, with the "other" category (mainly high-pressure pumps and parts) showing rapid growth [8][9] Future Outlook and Seasonal Factors - The company anticipates a slight slowdown in performance in Q3 and Q4 due to seasonal factors, with new projects from Chery, Great Wall, and others expected to gradually contribute to growth [7][22] - The heat management system's stainless steel component business is expected to ramp up in the second half of the year [7] Financial Performance and Growth Projections - The revenue growth rate for the first half of 2025 was around 20%, with expectations for the full year to be around 10% [22][24] - Traditional business is projected to maintain approximately 10% growth in the coming years, supported by ongoing projects and customer orders [24] Strategic Initiatives and Competitive Position - New Coordinates is focusing on high-performance alloy steel materials instead of traditional carbon steel to meet the automotive industry's stringent quality requirements [21] - The company has secured a project with Rolls-Royce, enhancing its brand effect and potential for high-end customer orders [26][27] Challenges and Risks - The company faces challenges in maintaining growth due to potential slowdowns in key clients like BYD and seasonal impacts on performance [22][23] - The commercial vehicle market remains a significant growth area, but the company’s market share in this segment is still relatively low compared to passenger vehicles [12][13] Conclusion - New Coordinates is positioned for growth with a strong focus on overseas markets and new product development, although it must navigate seasonal fluctuations and competitive pressures in the automotive industry [2][7][12]

Core Viewpoint - The report highlights a significant decline in the company's financial performance for the first half of 2025, with a notable drop in revenue and profits due to various operational challenges and external factors [2][3][10]. Company Overview and Financial Indicators - The company, Shanghai Daimay Automotive Interior Co., Ltd, specializes in the research, production, and sales of automotive interior components, with a global presence including production bases and R&D centers in multiple countries [5][10]. - Key financial metrics for the first half of 2025 include: - Revenue: CNY 3,174.87 million, a decrease of 3.35% compared to the previous year [3][10]. - Total profit: CNY 259.83 million, down 47.89% year-on-year [3][10]. - Net profit attributable to shareholders: CNY 241.33 million, a decline of 42.56% [3][10]. - Basic earnings per share: CNY 0.11, a reduction of 45% [3][10]. Operational Challenges - The company faced several operational challenges, including: - A fire incident at its Mexican subsidiary on May 11, 2025, resulting in significant property damage and an estimated loss of USD 33.75 million [3][10][11]. - Increased tariffs imposed by the U.S. government on goods shipped from Mexico and Vietnam, adding approximately USD 3.94 million in costs [3][10][11]. - A decrease in sales from some North American electric vehicle customers, impacting profit contributions [3][10][11]. Industry Context - The automotive industry is experiencing a complex landscape characterized by rapid growth in electric vehicles, but also facing challenges such as price wars and market segmentation [10][12]. - In the first half of 2025, China's automotive production and sales reached 15.62 million and 15.65 million units, respectively, marking year-on-year growth of 12.5% and 11.4% [10][12]. - The global automotive market saw a total sales volume of 46.32 million vehicles, with varying growth rates across different regions [10][12]. Competitive Advantages - The company has established a strong brand presence and technical capabilities, serving major global automotive manufacturers such as Bentley, Porsche, and Tesla [5][15]. - It has developed a comprehensive supply chain and production network, ensuring timely delivery and quality assurance for its products [19][20]. - The company emphasizes innovation and R&D, with a focus on developing new technologies and products to maintain its competitive edge in the market [12][16].