Core Viewpoint - The A-share market is experiencing slight declines, particularly in the AI sector, with the ChiNext AI Index down by 0.50% as of 14:29 on December 2. However, certain stocks like Zhaolong Interconnect and Tianfu Communication are performing well despite the overall trend [1]. Group 1: Market Performance - The ChiNext AI Index has seen a decline of 0.50% as of the specified time [1]. - The Huaxia ChiNext AI ETF (159381) is actively traded, with a transaction volume exceeding 300 million yuan during the day [1]. - Over the past five days, the Huaxia ChiNext AI ETF has accumulated an increase of 11.13%, ranking first among comparable funds [1]. Group 2: Fund Inflows - In the last two trading days, the Huaxia ChiNext AI ETF has experienced a continuous net inflow of over 60 million yuan [1]. Group 3: Future Outlook - According to China International Capital Corporation (CICC), the overseas AI hardware sector is expected to maintain high growth. The capital expenditure of the four major cloud providers in North America increased by 75% year-on-year in Q3 2025, with a positive outlook for AI investments in 2026 [1]. - The transition of cloud providers towards AI ASICs is anticipated to optimize costs and power consumption, with global AI ASIC shipments expected to more than double year-on-year by 2026 [1]. - The sustained demand is likely to drive the AI server and high-speed optical interconnect markets, with the global market size for 400G+ optical modules projected to reach 37.8 billion USD by 2026 [1].

Group 1 - Google has launched Gemini 3, utilizing its self-developed TPU cluster as a computing engine, which includes an OCS optical switching network, validating the feasibility of its full-stack technology route [1] - Meta is negotiating with Google to use TPU chips worth billions of dollars in its data centers by 2027 and plans to rent chips from Google Cloud next year, potentially generating billions in new revenue for Google [1] - The large-scale deployment of OCS indicates that it has moved from the proof-of-concept stage to large-scale application, with a complete OCS industrial chain rapidly forming, becoming a core technology for the next generation of AI computing facilities [1] Group 2 - The year 2026 is expected to be a critical point for the explosive growth of silicon photonics solutions and the introduction of CPO networks, with the optical communication industry expanding from optical modules to chips, cables, OCS, and CPO across upstream and downstream segments [1] - The ChiNext 50 Index (399673) has seen a strong increase of 1.94%, with constituent stocks such as Zhongji Xuchuang (300308) rising by 9.67%, Changying Precision (300115) by 7.69%, and Xinyi Sheng (300502) by 7.51% [1] - As of October 31, 2025, the top ten weighted stocks in the ChiNext 50 Index include Ningde Times (300750), Zhongji Xuchuang (300308), and Dongfang Wealth (300059), collectively accounting for 70.15% of the index [2]

Summary of Huamao Technology Conference Call Company Overview - **Company**: Huamao Technology - **Period**: First three quarters of 2025 Key Financial Performance - **Net Profit**: Decreased due to employee stock ownership plan, Vietnam subsidiary production, and convertible bond interest expenses, but adjusted net profit increased by approximately 15% year-on-year [2][3] - **Revenue**: Achieved 1.784 billion yuan, a year-on-year increase of 15.87% [3] - **Third Quarter Revenue**: 677.6 million yuan, up 18.34% year-on-year [3] - **Net Profit for Q3**: Approximately 37 million yuan, showing a decline [3] Impact of Vietnam Factory - **Production Start**: Vietnam factory officially started production in Q2 2025, with gradual capacity ramp-up expected [4] - **Challenges**: Slow production ramp-up due to automotive industry characteristics and customer inspection cycles, leading to short-term profit decline [4][5] - **Future Expectations**: Anticipated significant growth in 1.6T optical module shipments, with expected output of 1.5 to 2 million units in 2026 [4][13] Subsidiary Performance - **Fuchuang**: Revenue close to 1.4 billion yuan with net profit between 160 to 170 million yuan [6] - **Xuzhou Bokan**: Reported an investment loss of approximately 50 million yuan due to capitalization progress issues [6] Market Demand - **Domestic Market**: Orders are pulsed due to cloud factory investment bidding cycles [8] - **Overseas Market**: Major customer count increased by 10% to 15%, with expectations for accelerated growth in Q4 and Q1 of the following year [8] Product Development - **1.6T Product**: R&D started in 2024, with batch shipments beginning in Q2 2025, currently at a scale of several hundred thousand units, expected to grow by 80 to 100 times next year [9] - **Pricing**: 800G boards priced at over 100 USD, while 1.6T boards priced at over 200 USD [10] Revenue Recognition Method - **Accounting Method**: Utilizes net method for revenue recognition, which significantly reduces reported revenue compared to gross method [11] Future Revenue and Profit Expectations - **2026 Projections**: Anticipated 20% growth in automotive parts business and doubling of optical communication business revenue [15] Competitive Landscape - **Market Position**: Holds 60% to 70% market share in high-speed module market, with limited competition in high-speed optical communication module PCB A sector [20][22] - **Strategic Focus**: Prioritizing high-quality customers and expanding production capacity [20][22] Additional Insights - **OCS Business**: Actively expanding in OCS-related services, with higher profitability per unit compared to optical modules [18] - **Silicon Photonics and CPU Technology**: Providing silicon photonics solutions and manufacturing based on customer designs [14] - **Light-sensitive Resin Business**: Plans to advance light-sensitive resin business in collaboration with Bokan [19]

Group 1: Financial Performance - The company expects a net profit attributable to shareholders for the first half of 2025 to be between 1 billion RMB, representing a year-on-year growth of 327.68% to 385.47% [2] - The significant profit increase is primarily driven by the continuous growth in AI-related computing power investments and an optimized product structure, with a rising proportion of high-speed optical module products [2] Group 2: Product Development and Market Demand - The company has seen a continuous increase in the shipment and sales proportion of 800G products in the first half of 2025, while 400G products are also still being shipped [2] - The 1.6T product is expected to gradually ramp up in the second half of 2025 based on current market demand and customer guidance [3] Group 3: Capacity Expansion - The company has made sufficient preparations for capacity expansion in response to customer demand and order situations, with the first phase of the Thailand factory completed and operational in the first half of 2025 [3] - The second phase of the Thailand factory is expected to be completed by the end of 2024 and operational in early 2025, with ongoing capacity expansion [3] Group 4: Technology and Innovation - The company emphasizes the development and application of cutting-edge technologies, with an expected increase in the proportion of silicon photonics solutions in product offerings by the second half of this year to next year [3] Group 5: Industry Outlook - The company anticipates that the industry will maintain a high level of prosperity from the second half of this year into next year, actively preparing capacity to meet order delivery needs based on market applications and customer demand forecasts [3]