Summary of Su Shi Testing Conference Call Company Overview - **Company**: Su Shi Testing - **Industry**: Testing and Inspection Services Key Financial Performance - **Revenue Growth**: 6.72% increase in H1 2025, reaching 999.1 million CNY [2][3] - **Net Profit**: 14.18% increase, totaling 117 million CNY [3] - **Integrated Circuit Revenue**: Grew by 21.01%, reaching 155 million CNY [2][3] - **Overall Gross Margin**: Decreased by 3.16% to 41.88% [2][3] - **Net Margin**: Increased by 0.27% to 13.51% [3] Segment Performance - **Environmental Testing Equipment**: Revenue of 310 million CNY, up 6.32% [3] - **Environmental Testing Services**: Revenue of 487 million CNY, up 5.75% [3] - **Integrated Circuit Segment**: Gross margin of 36.49%, down 6.38% [3] Strategic Insights - **Focus on Emerging Industries**: Plans to reduce investment in traditional sectors and increase focus on aerospace and commercial space [4][15] - **New Product Development**: Emphasis on R&D to counteract declining gross margins [6][19] - **Capacity Utilization**: Increased from 30% to over 70% in Shanghai [12] Market Trends and Opportunities - **Vacuum Testing Equipment Demand**: Strong demand with plans to achieve billion-level revenue [2][8][29] - **AI and High-Performance Chip Testing**: Significant growth in testing services, with AI chip clients accounting for nearly 10% of business [2][9] - **Third-Party Testing Demand**: Recovery observed, with orders increasing to over 15% [22][23] Challenges and Risks - **Price Pressure**: Increased competition leading to price pressures across all segments [6][19] - **Delivery Speed of Large Orders**: Need to monitor the delivery speed of large orders in H2 2025 [5][24] - **Impact of Policy Changes**: Restrictions on outsourcing may affect operational efficiency [32][39] Future Outlook - **Optimistic H2 2025**: Anticipated growth in equipment and testing service orders, with a focus on improving delivery speed [5][10] - **Capital Expenditure Trends**: Expected to remain stable with a slight decrease, focusing on emerging sectors [16][18] - **Long-Term Growth in Special Industries**: Positive outlook for special industries over the next few years [36] Conclusion - Su Shi Testing is positioned for growth in emerging sectors, particularly in aerospace and AI chip testing, while facing challenges from price competition and policy restrictions. The company is actively working on improving operational efficiency and expanding its market presence.

Group 1: Financial Performance - The company's revenue in Q1 2025 increased by 12.59% compared to the same period last year, attributed to successful market expansion and increased product sales [2][3][8] - Despite revenue growth, the company reported a net loss due to increased R&D and marketing expenses, as well as stock incentive plan costs impacting net profit significantly [3][8] Group 2: Market Strategy and Product Development - The company is focusing on domestic suppliers for raw materials, which has led to a decrease in procurement costs and a manageable impact on gross margin due to high gross profit levels [4] - The company is actively pursuing opportunities in the automotive-grade silicon carbide device market, with KGD testing solutions gaining recognition from major clients [3][4] Group 3: R&D and Innovation - The company is investing heavily in R&D, particularly in high-power devices and third-generation semiconductor testing, to enhance its technological capabilities [7][8] - Ongoing development of large-scale digital integrated circuit testing systems is progressing, with significant advancements in hardware and software [6][7] Group 4: Future Outlook and Investor Relations - The management expresses confidence in the company's long-term development and is committed to improving operational efficiency and core competitiveness [10] - The company is monitoring potential acquisition opportunities while focusing on its core business, with plans for strategic mergers and acquisitions when suitable targets arise [9][10] Group 5: Industry Position and Competition - The domestic market for semiconductor testing equipment has a current localization rate of approximately 20%, with ongoing efforts to increase this rate through R&D and validation [11] - The company aims to expand its product offerings beyond semiconductor testing systems to include integrated circuit testing, addressing the need for a diversified product matrix [10][11]