Summary of OmniVision Conference Call Company Overview - **Company**: OmniVision (603501.SS) - **Industry**: Semiconductor, specifically focusing on CMOS image sensors (CIS) for smartphones and vehicles, and Liquid Crystal on Silicon (LCOS) technology for various applications Key Points 1. Smartphone CIS Outlook - Management is cautious about smartphone end market demand in 2026 due to rising memory costs, particularly for mid/low-end models - Despite this, management is optimistic about single-digit revenue growth for smartphone CIS in 2026, driven by a low base and introduction of new products - Expected increase in gross margin (GM) for smartphone CIS in 2026 due to new products and cost reductions from moving to local foundries [2][9] 2. Vehicle CIS Outlook - Vehicle CIS revenues are projected to grow at a low double-digit percentage year-over-year in 2026 - OmniVision has established relationships with 70-80% of local car OEMs, positioning the company well to benefit from the smart driving trend - Growth will be supported by the introduction of new products, including Serdes high-speed interface chips and microcontrollers (MCUs) - Management is also positive about future gross margin expansion due to better specifications and cost reductions from local foundries [3][9] 3. LCOS Opportunities - LCOS technology is being applied in various end applications, including AI glasses, vehicle augmented reality heads-up displays (ARHUD), projectors, and optical networks - The company is currently shipping LCOS for wavelength selective switches (WSS) used in telecom operators' data centers, with future potential in optical circuit switches (OCS) for cloud service providers' AI data centers - The OCS switch is significant, featuring 300-500 ports and requiring 2 to 4 wafers, which could lead to substantial revenue increases for OmniVision [4][9] 4. Financial Projections and Valuation - OmniVision is rated as a "Buy" with a 12-month target price of Rmb186.3, based on a 33x P/E ratio for 2026 - The target multiple reflects the company's long-term EPS growth compared to global peers - Risks include slower new product expansion, weaker-than-expected demand in the China smartphone market, and potential impacts from trade tensions [9] 5. Market Position and Growth Drivers - OmniVision holds a leading market position in camera CIS for smartphones and vehicles, benefiting from specification upgrades - The anticipated ramp-up in AI glasses and long-term growth in AI data center switches are expected to drive future growth [1][9] Additional Important Information - The management's positive tone regarding the 2026 outlook is supported by the anticipated growth in both smartphone and vehicle segments, as well as new applications for LCOS technology - The company is strategically positioned to leverage emerging trends in AI and smart driving, which could enhance its market share and profitability in the coming years [1][3][4]

Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics (9660.HK) - **Industry**: Smart driving technology and AI capabilities Key Points 1. Product Development - Management is committed to R&D, developing a BPU (brain processing units) platform for the next chipset, Journey 7, which is expected to enhance AI capabilities - Journey 7 is currently under design, aiming for completion in 1H27, with computing power projected to reach 1,500 to 2,000 TOPS, facilitating the migration of smart driving levels for car OEMs - The company is also working on chipsets that integrate smart cockpits and smart driving, positioning itself as a competitor to Qualcomm, with a launch planned for 2Q26 [2][3] 2. 2026 Outlook - Management is optimistic about growth in 2026, driven by the increasing smart driving trend in China, local car OEMs opting for more local suppliers, and product mix upgrades from ADAS to AD - Revenue growth is expected to outpace shipment growth due to product mix upgrades, with Geely identified as a key customer for growth in 2026E, alongside BYD, Chery, Changan, and FAW - China is anticipated to remain the primary market, with non-China markets expected to contribute by 2028E - Gross margin (GM) is believed to depend on product mix, with software yielding higher GM compared to domain controllers [3][4] 3. Competitive Landscape - Management is confident in their strong R&D capabilities and competitive price-to-performance ratio, which supports car OEMs in achieving smart driving - Transitioning from in-house solutions to third-party solutions may take time for car OEMs due to the longer product life cycle of automobiles compared to smartphones - Car OEMs have better balance sheets than smartphone manufacturers, allowing for sustained R&D investments - NVIDIA is viewed as a market leader, driving the adoption of smart driving across more car models, with Horizon Robotics aiming to be a significant player in this space [4][10] 4. Financial Projections - A 12-month target price of HK$15.30 is derived based on an EV/EBITDA multiple of 28.0x, using estimates of the company's 2029E EBITDA - The target price reflects a potential upside of 57.9% from the current price of HK$9.69 [9][11] 5. Risks - Key downside risks include: - Increased competition or pricing pressure in the auto supply chain amid slow demand - Slower-than-expected product mix upgrades towards AD - Delays in expanding the customer base - Supply chain risks due to geopolitical tensions [10][11] Additional Insights - The company is focused on continuous product mix upgrades to enhance dollar content per vehicle - Management's positive outlook is supported by ongoing trends in smart driving and localization within the automotive industry [1][3]

Summary of Horizon Robotics Conference Call Company Overview - **Company**: Horizon Robotics (9660.HK) - **Industry**: Smart Driving Technology Key Points Industry Trends - The smart driving trend in China is on the rise, transitioning from Advanced Driver Assistance Systems (ADAS) to highway Navigation on Autopilot (NOA) and city NOA, which is driving product mix upgrades for Horizon Robotics [2][3] Revenue Growth Projections - Horizon Robotics targets mid double-digit revenue growth over the next three years, driven by the smart driving trend, product mix upgrades, and customer penetration [2][3] - The average selling price (ASP) of chipsets is projected to increase from approximately US$30 in ADAS to US$100 in highway NOA, and potentially up to US$500 in city NOA, or US$700 when embedded with software [2] Customer Expansion Strategy - The company is focusing on local car OEMs such as BYD, Geely, Chery, and Changan, which are gaining market share in China [2] - Horizon Robotics plans to expand into joint venture (JV) car OEMs, which are primarily still in the ADAS phase, to leverage opportunities in smart driving and access global-tier car OEMs [2] Product Development and Outlook - For 2026, the company anticipates that product mix upgrades and customer expansion will be key drivers of growth [3] - The ADAS chipset revenue is expected to remain stable, while the J6M chipset for highway NOA and J6P for city NOA are projected to expand their customer base [3] - Horizon Robotics aims to have its solutions utilized in over 1,000 Robotaxis by 2026, collaborating with leading internet companies in China [3] Competitive Advantages - The company emphasizes its full-stack capability, particularly in software and AI, which is critical for maintaining a leading market position in the smart driving sector [8] - Horizon Robotics has a strong R&D team, with software engineers outnumbering hardware engineers by 3-4 times, enhancing its ability to design effective chipsets [8] Financial Projections - The 12-month target price for Horizon Robotics is set at HK$15.30, representing a potential upside of 102.9% from the current price of HK$7.54 [11] - Revenue projections for the upcoming years are as follows: - 2024: Rmb 2,383.6 million - 2025: Rmb 3,605.4 million - 2026: Rmb 7,166.2 million - 2027: Rmb 12,264.4 million [11] Risks - Key downside risks include: 1. Increased competition or pricing pressure in the auto supply chain amid slow demand [10] 2. Slower-than-expected product mix upgrades towards AD [10] 3. Delays in customer base expansion [10] 4. Supply chain risks due to geopolitical tensions [10] Conclusion Horizon Robotics is well-positioned to capitalize on the growing smart driving trend in China, with a strong focus on product development and customer expansion. However, the company faces several risks that could impact its growth trajectory.

Summary of BYDE (0285.HK) Conference Call Company Overview - **Company**: BYDE (0285.HK) - **Industry**: Technology and Automotive Key Points and Arguments Revenue Growth Expectations - BYDE's revenue for 2H25 is expected to grow by **35% HoH** due to improved seasonality and the smart driving trend, alongside a new smartphone product cycle [1][2] - The company is expanding into AI data centers, which may diversify its end markets in the long run [1] Market Conditions - The global smartphone shipment increased by **1% YoY** in 1H25, while the China market declined by **6.5% YoY** [1] - BYD's vehicle shipment increased by **33% YoY** in 1H25, with July and August showing slight growth of **0.56% YoY** and **0.15% YoY**, respectively [1] Financial Performance and Projections - Net income estimates for BYDE have been reduced by **11%/24%/26%** for 2025E/26E/27E due to lower revenue and gross margin (GM) expectations [2] - The gross margin is projected to expand to **9.7% by 2027E** from **6.9% in 1H25** [2][6] - Automotive electronics are expected to contribute **25% of total revenue by 2027E**, down from a previous estimate of **29%** [2] R&D and Operational Expenses - R&D expenses are anticipated to grow at a **30% CAGR** to **Rmb8.9bn (US$1.3bn)**, maintaining a ratio of **3.8%** similar to 2022-23 levels [2] - The operating expense (opex) ratio is expected to increase slightly in 2026E/27E due to higher R&D expenses [2] Earnings Revision - The earnings revision reflects a slower end market growth and the time required for the AI data center expansion to offset impacts [2] - Despite the earnings cut, BYDE is expected to achieve a **net income CAGR of +26%** from 2025E to 2027E [6] Valuation and Price Target - The target price has been lowered by **3.5% to HK$53.08**, implying a **2026E P/E of 17.1x** [11] - The new target price reflects a positive view on BYDE's product mix upgrade and is in line with peers [11][15] Risks - Key risks include customer concentration in the automotive business, slower-than-expected ramp-up of automotive products, and increased competition [16] Additional Important Information - BYDE's strategy focuses on leading customers like Apple and expanding product lines, which is expected to drive up dollar content per vehicle [2] - The company is maintaining a **Buy** rating despite the earnings revisions, indicating confidence in its long-term growth strategy [11][19]

Investment Rating - The report maintains a "Buy" rating for BYD with a target price of HKD 491.00 [6][21][19] Core Insights - BYD reported a revenue of CNY 170 billion in 1Q25, reflecting a year-on-year increase of 36% but a quarter-on-quarter decline of 38% due to a shipment of 1 million NEVs, which is a 60% increase year-on-year [1][8] - The gross profit margin (GPM) for BYD in 1Q25 was 20.1%, down 0.6 percentage points year-on-year, indicating ongoing fierce competition in the market [1][8] - Operating profit for BYD was CNY 5.6 billion, a 39% increase year-on-year, while net profit reached CNY 9.2 billion, doubling year-on-year [1][8] Summary by Sections Financial Performance - Revenue for 1Q25 was CNY 170.36 billion, a 36% increase year-on-year but a 38% decrease quarter-on-quarter [8] - Operating profit was CNY 5.6 billion, up 39% year-on-year, while net profit was CNY 9.2 billion, reflecting a 100% increase year-on-year [1][8] - The GPM was 20.1%, down from 20.7% in 1Q24, indicating a decline in profitability due to competitive pressures [1][8] Market Dynamics - The report highlights that BYD continues to benefit from its business scale despite a competitive environment, with sales and marketing expenses growing at a slower pace than revenue [1][4] - Recent government policies tightening smart driving function promotions have affected order volumes across the industry, prompting a shift in focus towards pricing strategies [2][3] Strategic Initiatives - BYD has initiated time-limited promotions with price cuts of 8-17% on select models to stimulate demand [4] - The company aims to improve liquidity through a proposed distribution of bonus shares, increasing the total number of shares from 3,039 million to 9,117 million [5][21]

Core Insights - XPeng Inc. reported a significant increase in vehicle deliveries, with 30,453 Smart EVs delivered in February 2025, representing a 570% year-over-year growth [1][8] - The XPENG MONA M03 has consistently surpassed 15,000 units in deliveries for three consecutive months, while the XPENG P7+ achieved over 30,000 cumulative deliveries within its first three months [2][8] - XPENG's smart driving technology has seen a high user penetration rate, reaching 86% in urban driving, with substantial increases in smart driving mileage and usage during the Spring Festival travel season [3] Delivery Performance - In the first two months of 2025, XPENG delivered a total of 60,803 Smart EVs, reflecting a 375% increase compared to the same period last year [2] - The XPENG P7+ has been identified as a popular model among consumers, with smart driving being a key factor in purchase decisions [2] Technological Advancements - XPENG's smart driving system, XNGP, achieved a user penetration rate of 93.3%, with the longest smart driving mileage recorded at 12,300 kilometers [3] - The company plans to develop and test its Turing AI Smart Driving system for international markets in 2025 [3] Product Launches - The 2025 Edition of the XPENG G6 was launched in February, featuring new designs and enhanced smart technologies [4] Company Overview - XPeng is a leading Chinese Smart EV company focused on technology-driven transformation in the electric vehicle sector, with a mission to enhance the mobility experience for consumers [5] - The company operates manufacturing plants in Zhaoqing and Guangzhou, Guangdong province, and has a global presence with offices in major cities including Beijing, Shanghai, Silicon Valley, San Diego, and Amsterdam [5]